Luke Blair: Reforming business rates calls for simple language

If I start this column with the words 'local government finance' in the first paragraph, I realise that you may read no further.

Luke Blair: Localism bill
Luke Blair: Localism bill
And who could blame you. Local government finance, like income tax and mortgages, has that fantastically irritating combination of being very very dull, very very complicated, and yet is something that, annoyingly, we all know is actually very important.

It makes a tangible impact on our everyday lives, such as how often our bins are emptied, how much we pay on our council tax bills, or how much our office pays in business rates.

It also has the ability to affect large swathes of our daily environment, deciding at a stroke whether an area can lift itself out of deprivation or is doomed to a downward spiral of decline and urban decay.

And so the current reform of business rates is actually very very significant. Even though it may have put you off this column completely.

Under plans contained in the Localism Bill currently going through Parliament, Ministers could allow councils to offer discounts on business rates, so introducing a more ‘localist’ aspect to them.

This could in theory mean council areas having different levels of business rate, bringing to an end the past decade of uniform business rates. Of course, with business rates being the main source of income for town halls, many have observed that local authorities are hardly in a position to give away cash at the moment.

Business groups are also nervous, worried that different rates could mean one company across the road from another being at a substantial disadvantage.

In London, Crossrail has meant in theory we are used to business rates being tweaked – upwards in this case – to create a special one-off infrastructure project.

But the ability to flex the rates downwards, helping to lift deprived areas out of decline, creating special growth areas and – above all – breaking the link between local decision-making and centralised control, has to be a good idea.

Think tank the Centre for Cities in a timely report has suggested allowing town halls to keep as much as 40-60% of their rates themselves, instead of handing them back to HM Treasury to redistribute.

It’s all beginning to sound like localism may actually mean something, and it will be up to local councils to push this agenda while the excitingly titled Local Government Resource Review is out for consultation.

This Review and the Localism Bill will need to be made to work together, and some of the politics around them involving Nick Clegg and Eric Pickles needs to be sorted.  We don’t want to end up with a curate’s egg, or even a Pickled Clegg.

It will also need council communicators to work hard at conveying in simple, powerful language the benefits of reforming an opaque system that people simply find incredibly hard to get their heads around.

You never know, if the politics and communications come together in the right way, it may even make local government finance interesting. And I bet you never thought you would read that in a PR Week column.

Luke Blair is a director at London Communications Agency

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