George Osborne has reaffirmed his commitment to allow councils to keep all of the money raised through taxing local businesses operating in their areas by the end of this Parliament. Nationally, this adds up to an estimated £26bn. Local authorities will also, according to the Chancellor, be able to lower business rates in order to attract business investment.
Directly elected mayors too will have new fiscal powers. They will be able to raise rates on the condition that they use the revenue to invest in local infrastructure. Central government grants will also apparently be phased out.
Today’s announcement to abolish uniform business rates, has he said in the Spending Review, is an integral part of the Chancellors “devolution revolution” and attempt to correct what is characterised as the “geographical imbalance” in the UK.
By devolving the responsibility for business rates to councils, the Chancellor hopes to encourage local authorities to become more competitive and to focus their attentions on attracting private investment into their own areas.
The Chancellor also confirmed that the small business rate relief will be extended for another year.
There was much disappointment at the Chancellor’s decision to push back a response to its vaunted review of the business rates system from December 2015 to the 2016 budget.
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25th November 2015