Danny Alexander may have already made the biggest announcement with regard to business rates on Monday, confirming plans for a “wide-ranging review” but much positivity surrounds the Chancellor’s announcement around devolution of business rates to regional authorities, with Manchester and Cambridge emerging as the first pilots.
George Osborne has already confirmed plans for an elected Mayor in Greater Manchester, “the most exciting development in civic leadership in a generation” and would now be followed by an agreement that will lead to keeping 100% control of the additional growth in its local business rates, with the Government offering the same control to Cambridge and Peterborough, while the “door is open” to other regions too.
“We have now reached provisional agreement to allow Greater Manchester to keep 100% of the additional growth in local business rates as we build up the Northern Powerhouse”, Osborne said. The pilots will begin, subject to agreement, with effect from1st April 2015.
The Government has already announced complete devolution of business rates to Wales from April 2015. Wales have had limited control over rates, transition and relief since devolution, and as a result, they have a simpler system, and some might argue, a better one. The total rateable value in Wales excluding the Central Rating List is just over £1.85 billion, bringing in around approximately £0.9 billion of revenue annually.
Howard Elliott, head of Rating at BDT, is interested in the Chancellor’s statement that the business rates system is in need of “far-reaching reform” which is all well and good, but given the statement that his review is to be “fiscally neutral” it does rather beg the question of exactly how he can possibly deliver these reforms. He added “the most pressing issue at present is the excessive rates burden that there appears to be little joy on the horizon for hard-pressed rate payers”.
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18th March 2015