Current Practice of Granting City Status
According to a Memorandum from the Home Office issued in 1927,
If a town wishes to obtain the title of a city the proper method of procedure is to address a petition to the King through the Home Office. It is the duty of the Home Secretary to submit such petitions to his Majesty and to advise his Majesty to the reply to be returned. It is a well-established principle that the grant of the title is only recommended in the case of towns of the first rank in population, size and importance, and having a distinctive character and identity of their own. At the present day, therefore, it is only rarely and in exceptional circumstances that the title is given.
In fact, a town can now apply for city status by submitting an application to the Lord Chancellor, who makes recommendations to the sovereign. Competitions for new grants of city status have been held to mark special events, such as coronations, royal jubilees or the Millennium.
Read more about this topic: City Status In The United Kingdom
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