Headlines: May 21st, 2007



England’s big cities need the power to raise more money so they can carry out much-needed improvements to local transport systems, according to a report published today by the Centre for Cities at the Institute for Public Policy Research. It backs the idea of a supplementary business rate, which was endorsed by Sir Michael Lyons in his recent report on the future finance and functions of local government.

The report, ‘Connecting Cities’, says an additional business rate would help cities to deliver important local transport schemes. It is calling on the Government to use the Comprehensive Spending Review and the forthcoming Road Transport Bill to give the major regional centres the financial freedom they need to improve transport. The alternative, it says, is to risk undermining their economic recovery.

‘Connecting Cities’ includes examples of what a 2 pence ‘top-up’ business rate could achieve. In Birmingham, it says, in the city alone it would bring in 15.4 million pounds to support a ten-year loan of about 118 million pounds that could close the funding gap in the scheme for the redevelopment of the city’s New Street Station. In Greater Manchester, the report points out, a similar rate across the 10 authorities would yield more than 40 million pounds a year. That would support a ten-year loan of around 310 million, close to the cost of the local share of the Metrolink Phase III scheme. In the case of Leeds the report estimates that 40 per cent of the cost of the proposed Bus Rapid Transit network, which will replace the cancelled Leeds Supertram, could be met by a 2p rate.

Dermot Finch, the Director of the Centre for Cities said the future economic growth of cities depended on their having the financial freedom to deliver local transport improvements. “City leaders, businesses and ministers must reach agreement on supplementary business rates, as proposed by the Lyons Report. These will give cities a key tool to invest in transport and support local economic growth,” he said.

The report, “Connecting Cities: local transport, national connectivity and economic growth”, by Adam Marshall with Ben Harrison, is available from www.ippr.org/centreforcities https://owa.uce.ac.uk/exchweb/bin/redir.aspURL=http://www.ippr.org/centreforcities