Pickles pledges to let council keep business taxes

ERIC Pickles, the Communities Secretary, is expected to announce plans today for councils to keep £19 billion of business taxes a year to spend on local services reports The Times.

The proposals, to be published in a White Paper, would give cash incentives to councils that are able to attract business and regeneration to their areas.

Until now business rates have been passed by councils to the Treasury so that the sum can be redistributed to more than 300 local authorities in England as part of a £30 billion annual central grant.

Under this system there is no incentive for councils to attract business, and in some cases it can cost local authorities more, as they have to fund infrastructure for new developments.

Under the new model, town halls can keep all or most of the cash to spend on local services. They will also be allowed to borrow money against revenues from business rates.

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