1 Our report
1. On 7 August last year we published our Report
Local Government Finance: Supplementary Business Rate.[1]
The Report followed the recognition in the Government's Green
Paper The Governance of Britain that "enabling communities
to take decisions about how to use local funds can also help ensure
that local priorities are being met"[2]
and the proposal by Sir Michael Lyons to allow local authorities
to make marginal changes to the national non-domestic rate.[3]
2. The Government had offered, in both the March
2007 Budget and the later Sub-national review of economic development
and regeneration,[4]
an encouraging but general reaction to Sir Michael Lyons's proposal,
promising to give the matter further consideration and to make
a more substantive response later in the year. We argued that
that response should set in motion a process to enable local authorities,
including upper and second-tier authorities in two-tier areas,
to levy a supplementary business rate to increase or decrease
the business rate paid by local businesses. We recommended a number
of safeguards to ensure that local authorities secured the agreement
of the local business community to introduce a supplementary business
rate and on the purposes to which revenue could be applied; but
we considered that, given those safeguards, a wide degree of local
discretion was appropriate, including over the level of supplement,
requirements for ballots of local business, and exemptions and
discounts.
1 Communities and Local Government Committee, Seventh
Report of Session 2006-07, Local Government Finance: Supplementary
Business Rate, HC 719. Back
2
Ministry of Justice, The Governance of Britain, Cm 7170,
July 2007, paras 176-7. Back
3
Sir Michael Lyons, The Lyons Inquiry, Place-shaping: a shared
ambition for the future of local government (hereafter 'Lyons
report'), March 2007, Recommendation 8.2, p.296. Back
4
Budget 2007: Building Britain's long-term future: Prosperity
and fairness for families, para 3.138; Sub-national review
of economic development and regeneration, July 2007, para
6.43. Back
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