Chancellor reveals plan to reintroduce local business rates and abolish regional assemblies

Councils will be given the power to raise business rates to pay for infrastructure projects.

Alistair Darling, the chancellor, has announced steps to permit councils to set a supplementary business rate, likely to be four pence in the pound, as part of a drive to improve the delivery of regeneration and growth projects.

Darling鈥檚 statement was made at the same time as the publication of a review of sub-national economic development by the Treasury.

The extra income will be used to pay for infrastructure projects, such as tram and road schemes, which can unlock development sites.

Councils, which will have to consult with local businesses before levying the top-up rates, lost the power to set business rate levels in the late 1980s.

Abolishing assemblies will do nothing to speed up the planning system

Eric Pickles MP

The economic development review also includes proposals to abolish regional assemblies.

The responsibilities of the assemblies for shaping housing and planning strategies will be handed over to beefed-up regional development agencies.

The government gave the assemblies extra powers as part of an attempt by John Prescott, the former deputy prime minister, to devolve more power to the nine English regions.

Eric Pickles, shadow communities secretary, criticised the proposal to abolish the assemblies.

He said: 鈥淭he musical chairs of passing their functions from one regional quango to another will do nothing to give local communities a greater say on where new homes should go, nor speed up the planning system.鈥�