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Issue:- 14 July 2011


ALLOWING councils to retain a portion of future tax made on business property will give cities an incentive to say ‘yes’ to the development needed to drive economic growth for the first time in 20 years, according to new research out by Centre for Cities.

The report, Room for Improvement, Creating the financial incentives needed for economic growth, argues that a bold change to current policy is needed and recommends that cities should be allowed to retain between 40% and 60% of future business rates, indefinitely. This would create a strong, simple, long-term incentive for cities to support development and economic growth.

The report, which is supported by SNR Denton and CB Richard Ellis, urges the government to use the Local Government Resources Review to radically change how business rates are currently allocated.

The Government has introduced 2 new policies to rebalance local decision making in favour of development. The New Homes Bonus offers local authorities a payment for each additional house built, and the Local Government Resources will allow for the retention of business rates.

The report shows that the reforms could fundamentally alter the way that local government in England is financed, incentivising local authorities to be far more pro-growth and pro-development.

55 English cities increased their business rate during the period 1999 to 2010, suggesting that a financial incentive for growth could work positively for almost all cities. The table below shows which cities have seen the highest proportion of growth in their business rates since 1999.

Real growth in business rates (1999-2010)

Rank City £000's %
1 Milton Keynes 53,000 57
2 Cambridge 25,600 46
3 Preston 34,400 45
4 Oxford 24,700 45
5 London 1,670,000 40
6 Liverpool 70,800 40
7 Newcastle 82,600 40
8 Southampton 39,800 38
9 Derby 23,400 38
10 Mansfield 16,000 37

(Using the GDP deflator (2009-10 prices))

Joanna Averley, Chief Executive of Centre for Cities said:- “The government must not miss this opportunity to be radical in revising the business rates system, and we welcome the political backing given to this process by Nick Clegg last month. Reviewing this system will not only reward councils for being pro-growth, but it will also make a real difference to the people they represent; because the money raised from the business rate could be ploughed straight back in to the community, into things like roads and schools.  In this challenging economic climate, it is more important than ever to encourage buoyant cities to grow. Because the current tax system offers no direct financial incentive for cities to develop their business base, it does not encourage them to achieve their full potential.”

Sarah Whitney, Managing Director, Government & Infrastructure, CB Richard Ellis, said:- “Allowing local authorities to retain a sizeable proportion of their future incremental business rates, could be a very real incentive to developers and local businesses. Whilst unlikely to be popular with all local authorities, we are in tough times, and tough times require Government to make tough decisions.  In our view, the local retention of rates could foster a dynamic partnership between developers and local authorities, which could facilitate the smooth delivery of projects that will bolster economic growth. There is no doubt that a number of stalled projects, that could have created additional jobs and economic growth, would have been brought forward if a greater proportion of business rates had been retained locally to fund the necessary infrastructure. We await the outcome of the Local Government Resource Review for clarity, but the implementation of local business rates retention is critical.”

Stephen Webb, a Partner at SNR Denton said:- "As the Coalition Government begins to acknowledge that the Localism agenda must be balanced by a credible agenda for growth, the financial incentives to stimulate development have come under closer scrutiny. This report concludes that while the Government's proposed incentives are a step in the right direction, more needs to be done to stimulate development to ensure that our towns and cities are able to compete nationally and internationally. Financial incentives such as business rate retention and the New Homes Bonus therefore need to be enhanced and the benefits distributed to the relevant authorities to properly encourage much needed development." 

100th Birthday De-light for Liver Building

LIVERPOOL is to celebrate the 100th birthday of its world-famous Liver Building and the opening of the new Liverpool Museum with an awe-inspiring and unmissable audio-visual spectacular.   The 3D Son et Lumiere projection will use images and sound to bring the buildings to life in a cutting-edge digital chronicle of 800 years of history - from civil war and industrial revolution to WWII and the Beatles. As the city’s newest building, the Museum will be a major part of the celebrations with its own 3D projection which will create a new waterfront dimension, changing the perception of seemingly ordinary objects, and at the same time shattering the viewer’s perception and perspective.   This very special FREE ‘On The Waterfront’ weekend at the Pier Head on 22 July to 24 July 2011, sees the UK debut for the internationally acclaimed The Macula architectural projection company who left crowds in Prague awe-struck with their 600th Anniversary show projected onto the city’s Astronomical Clock.

The Macula, who are based in the Czech Republic, have never worked in the UK before but their debut is set to be something generations will talk of for years to come. Martin Posta of The Macula, said:- "The Liverpool challenge is one of the most important events for The Macula team in 2011. 'The On The Waterfront' event will be the place where modern architectural mapping meets Liverpool's history and its contemporaneousness. The creative approach to the projection will come from the historical differences of the buildings."

Each evening the celebrations will start around 8.30pm with a special musical performance. Blues favourite Connie Lush be whipping up audiences into a frenzy on the Friday before Saturday’s revellers will enjoy a one-off concert by the internationally renowned Royal Liverpool Philharmonic Orchestra on the Saturday. Liverpool sensations 6 Toys will entertain the crowds on the Sunday.  And if that wasn’t enough, throughout each evening, giant, beautifully illuminated lanterns representing key points in Liverpool’s history will be on display at the Pier Head complete with illuminated fish swimming in the canal. Councillor Wendy Simon, Liverpool City Council cabinet member for culture and tourism, said:- "The Macula extravaganza will showcase the finest in international artistry to mark the anniversary of one of the UK’s most significant buildings and herald the birth of the next generation of architectural excellence. The Liver Building was controversial from the start - it was the first to use reinforced concrete which was revolutionary at the time, but because of the modern look of the building, people didn’t take to it at first. And now we can safely say it’s one of the most loved buildings in the world. It’s wonderful we can mark the special birthday of one of the city’s most influential buildings and at the same time usher in a new era with the opening of our new world-class museum which I’m sure will prove to be a hugely popular attraction."  This year’s series of events were kicked off in April by the hugely successful Spring on the Waterfront which attracted around 60,000 visitors to the Pier Head during the ten day maritime extravaganza. Historic Tall Ships, regattas, a sea shanty festival and historic canal boats all took part in the festival.  The final 'On The Waterfront' event will take place from 8 to 15 September 2011 and will see a new-look Mersey River Festival return for the first time since 2005. A royal naval visit along with Cunard Cruise Liners, including the new Queen Elizabeth and the Queen Mary 2, will all be part of the much-anticipated activities.   Last year’s On The Waterfront series of events brought in more than £1.2 million to the city’s economy and this year’s events are funded by Liverpool City Council in partnership with European Regional Development Funding.  See:-  for more details. For a taste of what treats are in store in July, visit to:- The Macula.  To see The Macula’s incredible projection onto Prague’s Astronomical Clock.  Also you can click on here to see what The Macula recently produced in Dubai for Fanta.

Funding for Youth and Play this summer

MORE than 2,000 extra hours of play and fun activities for young people will take place during the summer holidays in Liverpool. The money will be used to support established projects in putting on additional events, such as sports and art, during the schools out period in late July and August 2011.  Funding will be divided equally between the north and south of the city, and distributed to projects operating in areas with the most significant need for youth and play provision.  A further £75,000 in grants will be given out to voluntary organisations through Merseyside Play Action Council (MPAC).  Councillor Steve Munby, Cabinet Member for Neighbourhoods and Youth and Play said:- "We want to put on a wide and varied range of activities and things to do for young people during the summer. These additional events will make sure there are things happening right across the city over the holiday period. It is essential that we engage with young people and give them exciting and stimulating events to take part in rather than being tempted to hang around on street corners. Cuts in government funding mean we aren’t able to put on our usual Splash programme, but this will go some way to compensate. We are also working with partner organisations such as housing associations and community groups to try and make sure we maximise the number of events taking place in the city this summer."  The programme of activities for young people will launch as the schools close for the summer break and will be held at youth centres, community organisations, parks and public spaces across the city.  More information will be available at the Youth Service website.

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