There are no plans for Government to give local authorities greater powers to set business rate locally. The Lyons Inquiry into Local Government considered the case for returning business rates to local control. Its analysis concluded that this would not be appropriate at the current time. The Government agreed. However, Sir Michael Lyons did recommend introducing a new local flexibility to set a supplement on business rates.
In October 2007, alongside the 2007 pre-Budget report and comprehensive spending review, the Government published “Business rate supplements: a White Paper”. The Business Rate Supplements Bill was then introduced in the House of Commons on 4 December 2008 and gives effect to the Government’s proposal in the White Paper. The Bill provides the Greater London Authority and, outside London, upper tier local authorities a discretionary power to levy a supplement on the business rate and retain and invest the proceeds in additional projects aimed at promoting the economic development of local areas.