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LGC View: Rates reform opens Pandora's Box

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George Osborne’s announcement of the “biggest transfer of power to our local government in living memory” last week sent shockwaves through the sector.

Councils largely welcomed being granted full control of business rates, having sought the power for many years. However, the chancellor’s move opened the Pandora’s Box of local government finance reform and there is much nervousness about who will win and who will lose.

Nick golding new website

LGC editor Nick Golding

LGC this week carries a series of articles that give the clearest picture we have so far of what people believe to be the potential of business rates localisation. They also reveal the depth of their fears.

In his exclusive article, local government minister Marcus Jones insists that “redistribution between councils will remain important”. However, our piece from the Special Interest Group of Municipal Authorities – those in the north and Midlands covering some of the most deprived areas – shows the level of apprehension that their income will rise least. We also have articles from the most senior representatives of the county and district sectors whose opinions on who should get what share of the spoils of business rates could not be more contrasting.

As the Department for Communities & Local Government’s permanent secretary has admitted, no grand plan exists for how the reform will be implemented. And it will not be until next month’s spending review that it is clear to what extent increased financial freedom goes hand in hand with cuts. The coming period will see intense lobbying and far from everyone will be satisfied with the result.

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