April 23 2015.


As England celebrates St George’s Day today, a survey from the British Chambers of Commerce shows that businesses based in England want more decisions taken in town halls – rather than from Whitehall.

The results from more than 1,300 English firms show that 42% believe greater devolution to their local area would have a positive impact on their business; while a quarter (26%) think it would have negative consequences.

However, while businesspeople want more decisions taken locally, they remain sceptical when it comes to tax-setting powers being handed over to councils.

Nearly a third (33%) of English businesses would expect their tax bills to rise if set locally, versus 18% who expect to pay less tax. Micro, small and medium-sized businesses were more likely to say they would expect to pay additional tax, compared to large organisations.

The majority of businesses identified simplifying local government (58%) and giving ratepayers a vote on local economic strategies (51%) as the most effective methods of increasing the accountability and effectiveness of local government.

BCC Director General, John Longworth, said: “Firms want to see spending decisions related to local growth made in their areas, but remain very sceptical of any devolution of tax-setting powers.”

Key findings from the BCC survey:

English businesses have an appetite for devolution

- Firms in England believe handing more powers to local governments will have a positive impact on their business - 42% positive, compared to 26% negative

However, firms are sceptical about localised tax-setting powers

- Nearly one third of businesses (30%) expect to pay more tax if rates were set locally, compared to 18% who expect to pay less tax

- Only a third of businesses (34%) support paying higher taxes if the money is retained and spent locally

Devolution must increase the efficiency and accountability of local government

- Businesses identified simplifying local government (58%) and giving ratepayers a vote on local economic strategies (51%) as the most effective methods of increasing the accountability and efficiency of local government

- The majority of businesses surveyed anticipate the greatest positive impact from devolution to be on transport investment (67%), and apprenticeship funding and delivery (58%)

To ensure businesses are placed at the heart of local growth, the BCC’s Business Manifesto is calling for the incoming government to:

- Guarantee a business ratepayers’ vote on local economic strategy, including a vote on any proposed changes to local business taxation – ensuring that plans for an area’s future have the support and input of the whole of the business community.

Commenting John Longworth, Director General of the British Chambers of Commerce, said: “Our research shows businesspeople in England broadly support the concept of further devolution to their local area. Firms want to see spending decisions related to local growth made in their areas, but remain very sceptical of any devolution of tax-setting powers.

“Businesses don’t support devolution for devolution’s sake. However, they support greater local-decision-making if it means greater efficiency, greater accountability and better results. Our proposal for a ratepayers’ vote on local economic development strategy and funding decisions would ensure that plans for an area’s future have the support and input of the whole business community.

“As various parties’ election manifestos have acknowledged, boosting the growth prospects of England’s cities and counties must be a priority for the next government. Yet devolution must work for business if local areas are to see sustainable growth and job creation for years to come.”