David Frost, BCC Director General, said: “Re-localisation runs the risk of cash-strapped local authorities increasing business rates to raise revenue, without the political pain associated with increasing council tax. This risks a reduction in levels of enterprise at a time when businesses already face a difficult economic climate, with high levels of taxation, rising energy costs and burdensome regulation. “As today’s Audit Commission report shows, a number of local authorities need to improve their performance and value for money.
It makes no sense to hand greater revenue-raising powers to councils whilst such problems exist. Mr Frost continued: “The national system ensures accountability and stability. Businesses are not opposed to fair business rates, but safeguards must be built in. Business is expected to contribute £20.3 billion to local government finance in this financial year and cannot be expected to contribute extra money to plug holes in local authority budgets. “The wider issue, which BCC is pleased Sir Michael Lyons will now be addressing in his extended inquiry, is what the strategic role of local government should be and how this relates to central government responsibilities. We need a far more efficient and effective local government structure, where local authorities work closely with business to secure economic development and investment in local infrastructure. BCC is closely involved with the extended Lyons Inquiry to ensure that the voice of business is represented in this important debate.”