Laura Sharman 08 November 2016

Give councils financial incentive to merge says report

Local authorities should be financial incentivised to merge together, such as limiting business rates retention to combined and unitary authorities, a new report has argued today.

The paper, from manufacturers’ organisation EEF, says that this would help those areas that don’t have the capacity of capability to agree a devolution deal with the the Government.

It recommends that as well as limiting the benefits of business rates retention to combined and unitary authorities, they should also receive other fiscal retention such as stamp duty. The paper also calls for a discussion on how council tax can be used to incentivise council mergers.

It says that increased council mergers would help speed up decision-making, lower the cost of delivering services and give businesses just one local authorities to deal with.

Chris Richards, senior business environment policy adviser at EEF, said: ‘Despite this compelling case, some areas of England are being left out due to the legacy of inefficient local government structures – this needs to be tackled. If England did not have a two-tiered council structure, no one would be arguing for its creation.

‘With a new Government there is an opportunity to look again at local government mergers as a solution - and central Government should push this by putting in place funding and fiscal incentives to make it happen.’

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