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Pre-Budget Report
09 October 2007
This proposal, which builds on the review of sub-national economic development and regeneration, is a substantial devolution of power to local communities in, allowing them to make investment decisions that more closely reflect local economic need.
The announcement follows extensive public debate on reform to business rates in England and the recommendations of the Lyons Inquiry into Local Government.
The Government's proposed model for business rate supplements involves four levels of protection for business:
Revenues from supplements will be locally raised and retained, with local decision-making on the duration of any supplement and the specific projects it should be spent on.
The Government intends that only the highest tier authority in any areas should be entitled to levy supplements. These authorities will be able to cooperate to fund joint projects, within the existing statutory framework. Shire counties will be required to consult their districts on any new supplement proposals. In London, the power will rest with the Greater London Authority (GLA). The Mayor of London has announced that he envisages levying a business rate supplement of 2p in the pound across the GLA area from April 2010, with revenues to be used to service debt for construction the Crossrail railway project.
The Government will legislate to enable local authorities that wish to levy the first supplements by April 2010.
The Government will consult on technical issues before finalising the detailed arrangements.
Business rate supplements: a White Paper is available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.
