The Balance of Funding Review Group is scheduled to report in Summer 2004. None of us know what the Group will recommend, but one of the options that they are known to be considering is the return of the non-domestic rate to local control.

This discussion paper by local government finance expert, Rita Hale:

• examines the contribution made by the non-domestic sector towards local government spending over the period since 1981-82 – and highlights the decline in the sector’s contribution since the ‘nationalisation’ of the non-domestic rate back in 1990-91;
• considers some of the issues raised by the relocalisation of the non-domestic rate – and in particular how the council tax and the local non-domestic rate might be linked, and different approaches to equalisation;
• sets out clear exemplifications of four feasible approaches to equalisation;
• considers some of the arguments that might allay the business community’s fears returning the non-domestic rate to local control; and
• sets out a number of the issues that would need to be addressed before the non-domestic rate could be returned to local control.
  

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