Supplementary Business Rate will give councils new freedoms

October 9, 2007

The New Local Government Network have welcomed the announcement to allow local councils to introduce a Supplementary Business Rate (SBR). The think tank said that it will give councils new freedoms and flexibilities to unlock new revenue streams and invest in new infrastructure projects.

Commenting on the Treasury’s Comprehensive Spending Report, NLGN Director Chris Leslie said:

“The consultation on a new Supplementary Business Rate for upper-tier local authorities and the Greater London Authority is a welcome move, giving councils the chance to unlock some new revenue stream against which major new capital infrastructure can be delivered to the benefit of their local economies.

There are many road and rail improvements across the country that become a stronger prospect today because of this new, albeit modest, approach. The Government has erred on the side of caution with a small 2p in the pound supplementary rate, together with strict rules on rights for business to be polled if a project depends on their business rate contribution. Over time we hope that the requirement to gain the separate consent of businesses can be removed, with local elections acting as the best way for such proposals to be endorsed by all residents and businesses. We would also urge the Government to think again and allow London boroughs to be able to levy SBR”.

“Moving to a position where local government finance is rooted in local economic development rather than Whitehall grant alone is a step in the right direction. If councils are motivated to create new jobs and a better local economy, then they will spend their energies on these issues rather than on arguments about grant-funding formulae. A supplementary business rate is a sign that Government is beginning to trust competent local authorities, and a sign that the relationship between centre and locality is maturing. We welcome this development.”


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