Chancellor George Osborne is rumoured to be considering a business rates reform which would see local authorities in cities such as Manchester, Liverpool and Leeds keep a greater proportion of revenue raised for use in local enterprise projects.
Following the Scottish independence referendum campaign, during which Scotland was promised greater powers, devolution has been a hot topic in cities which feel they could benefit from the ability to make more of their own decisions. As a result, a number of discussions have taken place with the Treasury, local authority representatives and business leaders as a means of addressing key issues standing in the way of regional growth.
Mr Osborne, through further reform of the business rates system, is attempting to create a so-called “Northern Powerhouse” across the Pennines as a means of attracting new business to the UK. Although the rumoured bounty will not address the concerns of industry bodies such as the British Retail Consortium (BRC), it has the potential to boost local economies.
A spokesman for the Treasury says; “The Northern Powerhouse is all about creating successful global cities with strong political leadership combined with real power.
“We have already started the conversation about serious devolution of powers and will continue to work with our great northern cities in developing proposals in order to deliver a true Northern Powerhouse.”
Former Goldman Sachs banker and head of the RSA Cities Growth Commission, Jim O’Neill, welcomed any devolution of power from London in his report examining the best ways to boost growth in the UK’s biggest cities.
According to the commission, the country’s 15 largest metropolitan areas could see economic output boosted by £79 billion per year should Mr Osborne follow through with business rates reform.
Mr O’Neill says; “We argue all 15 metro areas should be able to take on different packages of devolved powers over time, and there’s no reason why other places could not come together to take on policy and budget flexibilities too.
“The current five metro areas that have Combined Authorities seem to be best placed, along with London, for warranting earlier steps towards full ‘Devolved Status’.”
Earlier this month, Croydon Council joined the Society of London Treasurers in calling for London boroughs to be given greater fiscal freedom – including retaining a larger percentage of business rates revenue – to boost local growth.
