It doesn’t really come as much of a surprise to hear that a piece of research by the Centre for Cities has concluded that 76% of senior economic development professionals, based in cities and towns throughout England, believe that relocalising business rates would be a positive step for their respective areas.
I think it is pretty clear that such a move would be almost certain to benefit cities. After all, the vast majority of business rates tax revenue is derived from urban locations. So, if local economic development professionals were to be handed control of these pots of money, they would clearly be failing in their duty to their local economies if they were unable to create some form of positive enhancement.
Aside from the fairly obvious conclusions of this research, there are three additional points to be considered, which will hopefully bring some balance back to the debate:
1) I have no doubt economic development professionals the length and breadth of the country are keen to seize local control of funding mechanisms, but what do business owners, employers and occupiers think of the idea of losing the predictability of a centrally-managed system in order to reap the benefits of local investment decision-making?
2) Rural communities benefit greatly from the existing process of tax income redistribution. Wouldn’t it be more beneficial to our overall understanding of the issues at stake for research such as this, albeit being carried out by the Centre for Cities, to consider the views of a broader range of interests? It is important for rural England’s voice to be heard too, and I encourage their representatives to join the debate.
3) More ominous is the comment which underpins the key rationale for the relocalisation of business rates – “With local finances under intense pressure, many[of the respondents] see these new [rates localisation]tools as a way to fill the gap left by public spending cuts.”
Fill the gap?? Dare I ask, at whose expense?
