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- New council powers to boost economic prosperity
New council powers to boost economic prosperity
| Published | 4 December 2008 |
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The Government today introduced and published in Parliament a Bill which will provide new scope for councils and businesses to work together to invest in the long-term economic prosperity of their local communities.
While many communities are feeling the effects of the economic downturn, these are powers for the future to enable local authorities in partnership with local businesses to invest in growth during the economic recovery.
The Business Rate Supplements Bill gives county and unitary councils in England, and the Greater London Authority, new powers to raise and retain funds for economic development projects in their area. This funding power could provide a real boost to jobs, infrastructure and local development.
The Bill also gives the business community a key role in decisions, with councils having a duty to consult local businesses on the use of the new power - and where the BRS will fund more than a third of any one project, they will be given the opportunity to vote. Smaller businesses will not be expected to pay the supplement.
The legislation follows last week's Sub-National Review of Economic Development and Regeneration (SNR), which confirmed Government plans to introduce these new powers.
Local Government Minister John Healey said:
"Councils and businesses alike are working hard to weather this difficult economic climate, but neither should lose sight of the opportunities that the economic recovery will bring.
"The Business Rate Supplements Bill will give councils the power to work with local businesses on economic development projects that will improve their local area, boost job opportunities and further increase confidence in the local economy.
"This is part of our wider commitment to give councils the powers to play a stronger role in supporting economic development and growth.
"The Business Rate Supplement is a power, not a duty. It will not be applied in every area every time - but it will be an important new tool as councils look to maximise economic development and growth for local residents and businesses."
Exchequer Secretary to the Treasury, Angela Eagle MP said:
"The Government recognises the current pressures on businesses and communities across the UK. It is vital at this time that Councils and local businesses can engage with each other to work towards economic development in their area.
"The Business Rate Supplements Bill will provide local councils with new powers, which together with local businesses, can be used to ensure local economies can thrive."
Notes to editors
1. Subject to Parliament, we will give County Councils, Unitary Councils and the Greater London Authority (i.e. upper tier authorities) powers to levy a local supplement on the business rate. Authorities will be able to use the proceeds to undertake additional investment aimed at promoting the economic development of their local area. The proceeds can not be used as an additional revenue stream for existing services. Additional features include:
- A limit on the total amount a levying authority may change in an area, to be set at 2p per £1 of rateable value.
- Properties with a rateable value of £50,000 or less will be exempt from the supplement.
- Authorities will be required to hold a statutory consultation on their proposals to levy a supplement. Where BRS will fund more than a third of the overall cost of a project levying authorities will also be required to ballot those businesses likely to pay the supplement.
- Authorities will have flexibility to: decide the duration of the supplement; reduce liability for the supplement for properties above the £50,000 threshold; to decide whether the supplement applies to empty property rate payers; and decide whether to offset Business Improvement Districts levies against liability for the Business Rate Supplement.
2. The Secretary of State will have the power to intervene if the conditions of a Business Rate Supplement are breached.
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