Council chiefs warn of business rates shake-up peril

Chancellor George Osborne addresses the Conservative Party conference in Manchester
Chancellor George Osborne addresses the Conservative Party conference in Manchester
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Town hall chiefs have warned of the dangers that the chancellor George Osborne’s overhaul of business rates could pose to St Helens.

Chancellor George Osborne unveiled his “devolution revolution” at his party’s conference in Manchester this week.

It will see local authorities keeping their business rates rather than sending a portion off to Westminster and allowed to cut business rates to attract new jobs.

A council spokesman said: “There is very little detail from the Government on how the changes will be implemented - which is disappointing given the magnitude of the announcement.

“The council hopes that the changes will be implemented fairly, accountably and equitably - and do not damage further our ability to deliver services to our residents.”

Mr Osborne said devolving the raising and spending of business rates was one of “the biggest transfer of power to our local government in living memory” and would help restore local government, which has had its wings clipped “again and again” over the past decades by all parties, including his own.

The chancellor said: “This is what our plan means. Attract a business, and you attract more money. Regenerate a high street, and you’ll reap the benefits. Grow your area, and you’ll grow your revenue too.”

But it also drew warnings that less-well-off parts of the country could get left behind in a race for investment and concerns from bosses that it could result in higher charges.

The Local Government Association, which has long campaigned for reform of the system, said the reforms were “great news”.

Central government currently takes in around £11.5 billion in business rates and redistributes £9.4 billion in grants to councils. But sources close to the Chancellor said that the change will not represent a loss to the Treasury, as it will be offset by the devolution of extra responsibilities to local authorities.