Group urges rates deal for cities to fund growth

Centre for Cities said allowing cities to keep between 40 per cent and 60 per cent of future tax made on business property would create a long-term incentive for areas to support development.

Chief executive Joanna Averley said: “The Government must not miss this opportunity to be radical in revising the business rates system.

“Reviewing the system will not only reward councils for being pro-growth, but it will also make a real difference to the people they represent because the money raised could be ploughed straight back into the community, into things like roads and schools.”

The group’s report, published yesterday, said the current system offered no direct financial incentive for cities to develop their business base.

Local Government Minister Bob Neill said: “The Government is considering options to enable councils to retain their locally-raised business rates that will allow them to break free from dependency on central Government funding.

“We will set out proposals shortly for consultation. “We are absolutely committed to providing effective incentives for all authorities – of all types and in all areas – to benefit from delivering growth. We have made clear that more deprived areas will continue to benefit from Government support.”