I think it is important to point out from the outset that not everyone is against some form of localisation, and the arguments in favour are compelling. Take the following excerpt from an article written by the Leader of Westminster City Council, and published in our current issue of Rating in Brief:
“We would like to see ministers go a step further and give local authorities the freedom to adjust business rates, creating for the first time real competition amongst councils, and instilling a more pro-business, pro-development and pro-growth attitude in councillors around the country. The prospect of locally elected politicians and council officers falling over themselves to promote their areas as the ideal location for enterprise, or even particular sectors, should be a tantalising prospect for the Chancellor, George Osborne.”
This really touches the heart of the issue. Businesses have been used to, and therefore tend to favour a centralised approach in which rates levies are determined by central government and are therefore perceived to be fair, predictable and relatively equitable. As an occupier, you know where you stand, can predict future changes with reasonable accuracy and can therefore plan for them.
As can be seen from the above extract, a fully localised process of rating could introduce an element of competition between local authorities as they strive to attract businesses and persuade them to locate within their boundaries. This could result in different local authorities setting substantially different levels of rates liability.
The question is, would a wholesale change from centralised to localised rating be good for enterprise and the UK economy? More to the point, is there a middle ground which suits the needs of business, yet allows local authorities to vary the level of rates paid by occupiers, enabling them to re-invest locally-collected funds and therefore have greater influence over the character of their local commercial environments?
What do you think?
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