City of London Corporation

The City of London Corporation is the local authority for the City of London (Square Mile), the small district at the heart of London that holds much of the United Kingdom's banking, insurance and trading business. It collects rates, runs planning, policing and housing for the area, and also promotes the City as an international financial centre at home and abroad.

It is one of the oldest local governments in the world and works differently from any other council in Britain. The Corporation is not the same thing as Greater London, which is run by the Mayor of London and the 32 boroughs, and its Lord Mayor is a separate office from the Mayor of London. The name "City of London Corporation" has been used since 2006; before that it was usually called the Corporation of London.

Picture a very old members' club that also happens to be the town council for one square mile of streets. It empties the bins and approves new buildings like any council, but its voters are mostly the businesses based there rather than the few thousand people who live there.

The club also has a ceremonial side, with a Lord Mayor in robes, a yearly parade and centuries of tradition, and a commercial side that speaks up for the finance firms on its patch. Because it has collected property and money over hundreds of years, it pays for some of its work from its own savings rather than only from taxes.

The City's self-government grew out of rights confirmed by Norman and medieval kings, including a charter from William the Conqueror and the right to elect a mayor granted in the early thirteenth century. Over the following centuries the Corporation survived waves of local government reform, from the Municipal Corporations Act 1835 to the creation of Greater London in 1965, each time keeping its special status.

Its links with money are as old as the district itself. Goldsmiths, merchants and early banks gathered in the streets around the Guildhall, and the institutions that followed (the Bank of England, the country's central bank; the Stock Exchange, its main financial exchange; and Lloyd's of London) settled inside its boundaries. Some medieval financiers, such as the Knights Templar, held property on its western edge. Later reforms, above all the Big Bang (1986), reshaped the businesses the Corporation represents.

The Corporation is governed through three bodies, all of them elected on a ward basis across 25 wards.

• The Lord Mayor. Chosen each year from among the Aldermen, the Lord Mayor presides over the Corporation and spends much of the year travelling abroad to promote UK financial and professional services.
• The Court of Aldermen. Twenty-five Aldermen, one for each ward, sit in this smaller chamber, which approves the admission of freemen and plays a role in choosing the Lord Mayor.
• The Court of Common Council. One hundred Common Councillors form the main decision-making body, which sets the budget and appoints committees; its policy chairman is often the Corporation's most visible political figure.

Most members stand as independents rather than for national parties. The Corporation employs its own officers, among them the Remembrancer, who handles its dealings with Parliament.

The feature that sets the City apart is its electorate. Residents vote, but so do people nominated by businesses located in the Square Mile. Under the City of London (Ward Elections) Act 2002, firms appoint voters in proportion to the size of their workforce, and business voters greatly outnumber residents. Wards with large resident populations elect a minority of Common Councillors, while business-dominated wards elect the rest.

Supporters argue that the people who use the City every day should have a say in how it is run. Critics see it as an unusual privilege for companies, many of them large banks and professional firms, that no other UK council grants.

Alongside ordinary council work, the Corporation has its own police force, the City of London Police, which also leads national work on fraud and other financial crimes. It runs Guildhall, the Barbican Centre, schools, markets and open spaces outside the City such as Hampstead Heath and Epping Forest. A linked charity, the City Bridge Foundation (the working name of Bridge House Estates), looks after five Thames bridges, including Tower Bridge.

Its money is held in three funds: City Fund, which covers council services and the police from grants and local taxes; Bridge House Estates; and City's Cash, a private endowment built up from property and investments over some eight centuries. City's Cash pays for much of the ceremonial and promotional work without drawing on taxpayers. The Corporation also publishes research on regulation by bodies such as the Financial Conduct Authority (FCA), on competitiveness and the UK's place among global finance hubs.

Campaigners and some academics describe the Corporation as a lobby for the finance industry with a council attached, pointing to the business vote, the Lord Mayor's trade missions and the Remembrancer's role in Parliament. Some writers link the City's networks to the wider world of offshore financial centres and tax havens, a charge the Corporation rejects. Others question the transparency of City's Cash, although the Corporation now publishes annual accounts for it.

Defenders reply that the Corporation is a well-run authority with low council tax, large charitable spending and genuine local services, and that its promotional work supports jobs well beyond the City. Reform proposals, including abolishing the business vote, have been raised in Parliament from time to time without being adopted.

• City of London Corporation
• City of London (Ward Elections) Act 2002