Former minister, Nick Raynsford, has attacked local government's ‘astonishing' failure to use devolved powers over business rate supplements as a funding source. Writing in The MJ this week, the ex-local government minister also accused the LGA of ‘living on a different planet' for questioning safeguards in the government Bill which will introduce SBRs, and for backing the full localisation of business rates. SBRs, which will allow town halls to raise additional cash from the business community to support infrastructure projects, will be introduced from 2010. However, councils have been slow to generate interest among local businesses and, consequently, have planned few infrastructure projects using the rates. Just one major project, the £16bn Crossrail scheme in London, currently plans to draw on SBRs. Yet Sir Michael Lyons made the initial SBR proposal in his 2007 report on local government, and ministers were quick to support the proposal as part of their devolution agenda. ‘In any circumstances, one might have thought that local authority leaders and cabinets, chief executives and finance directors… would be looking to see how such a significant new power and funding source might be used to the benefit of their area,' Mr Raynsford writes. ‘So, in a period of financial stringency, the silence of the local government community is, frankly, astonishing.' An LGA spokesman said councils were not yet keen on SBRs because the amount they could levy on businesses was low – and they did not want to impose additional costs on firms during the recession. A Treasury source said ministers had been ‘disappointed' by the poor response.
