Yesterday’s announcement of our plan to re-localise business rates is one of the most significant reforms announced by the Coalition so far. Ok, not as newsworthy as the phone hacking scandal, but it’s big news for local democracy nonetheless. It marks another fundamental shift from central control to local responsibility.
Under the current local government funding system, Whitehall dishes out grant allocations to councils each year based on an incomprehensible formula that is far too complex and lacking in transparency. Most of this money is funded by the business rates, collected locally, but funnelled centrally, and then reallocated. Councils are left at the whim of the formula-setter in Whitehall, and there is no incentive to promote business growth either. All you get are the extra HGVs, but none of the rates income! All this is about to change.
So what are the main things that Liberal Democrats need to know?