A director of a leading think-tank has claimed there is a lack of understanding between business and local government. Dermot Finch, director of Centre for Cities, which is popular with several government ministers, said companies and town halls did not trust each other. ‘This has been compounded over the last two decades by the transfer of business rates from local government to the national exchequer,' he said. ‘There is now a disconnect between a city's economic development and the business rates raised.' Mr Finch said councils did not benefit from a ‘pro-growth approach' locally, because business rates are handed to the Government and then distributed nationally. ‘Many business leaders seem to think councils can't be trusted to spend the money sensibly,' he added. ‘The test of whether public and private sectors can work together will be if business supports the return of business rates to local councils.' A report by Centre for Cities in December claimed cities in the North were still lagging behind their southern rivals. The report showed that out of the top 10 improving cities, half were in the North.