Alex Thomson of Localis says the idea that only a few councils want to retain Business Rates is nonsense
All of a sudden, local government finance is a hot topic, so it is good news that Localis has an in depth report out on Monday. The punningly titled ‘The Rate Escape’, which has been produced in partnership with Ernst and Young, will advocate that councils should be allowed to retain more of their locally collected business rates, cutting the apron strings from central government to once again let local authorities see real benefits from growing their local business rates base.
Being localists to our core, the model for change we advocate in ‘The rate Escape’ is voluntary, not mandatory. Some siren voices of dependency have suggested to us that very few councils would want to assume responsibility for economic development at this time of budgetary stress. But nothing could be further from the truth. In fact, the vast majority of councils across the country are straining to throw off centrally imposed constraints and once again be given the freedom to innovate and drive local economic growth. A survey of over 200 English council leaders and chief executives, completed as part of the research, shows that 99.5% of councils want more financial autonomy, and 96% want more control over their locally collected business rates.
And it is not just councils in the southeast that are champing at the bit. Pleasingly, the survey showed that there is equal enthusiasm for more control of business rates from both northern and southern councils. Furthermore, when asked whether central equalisation or local financial autonomy were most important, only one in ten northern councils thought that central equalisation was more important, exactly the same as southern councils.
The Government’s ongoing Local Government Resource Review presents an opportunity to think radically about the way that local government is funded in the future. Our report will show that every council across the country has the potential to benefit from local business rate retention, whether rich or poor, rural or urban, northern or southern. How much they will benefit will be entirely down to them.