Beyond business rates

How increasing local tax-raising powers can incentivise cities to grow.

The funding landscape for local government is changing. The move away from centrally redistributed grants towards places being more dependent on the business rate revenues they collect locally provides an opportunity to improve the way local services in the UK are financed.

Giving places more responsibility to raise and retain their own funding will provide cities with sharper incentives to back investment in the things that can make a difference to their local economy, such as investing in skills and infrastructure.

This report explores the impact of the business rate devolution proposals and argues for the need to go further. It explains how diversifying the local tax base and creating sharper incentives for economic growth can build a more sustainable system of local government funding for all localities.

The graphics below explain how the incentives created by more fiscal devolution can grow the overall spending pot for local government (click to expand).

Fiscal-devolution-and-redistribution

 

This report is supported by the Business Services Association.

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