Philip Hammond was at pains to offer an optimistic outlook for the UK’s finances in the recent spring statement, claiming to be “positively Tigger-like” about the nation’s economic prospects. The chancellor’s view wasn’t shared by the Office for Budget Responsibility or the Institute for Fiscal Studies, however. Both forecast that national economic growth will only fractionally increase next year – meaning the economic gloom of the past decade is unlikely to lift any time soon.
Of course, the national outlook plays out very differently across the country. Centre for Cities analysis shows that while cities in the Greater South East are among the most productive in Europe, many elsewhere in the country are lagging behind.
To address this problem, cities need to have the right tools and resources to drive growth in their economies – and this is where the government’s plans for business rate devolution come in. The idea is that, by allowing cities to retain more of the rates revenue they generate, they will be incentivised to support more growth in their economies.
Devolution is a welcome step but is not enough in itself. More extensive reforms of the system are needed to ensure that business rates devolution helps all cities across the country – not just those that are already successful.
Read more in the Local Government Chronicle.
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