Rate of return

NICK Clegg’s call for town halls to keep the business rates they collect is a natural extension of the coalition’s localism agenda. It also has the potential to provide local councils with the means to fund future infrastructure projects rather than such schemes being left at the mercy of Whitehall-led priorities and funding allocations.

Yet, while the Deputy Prime Minister’s intentions are sound, the Liberal Democrat leader still needs to provide some key reassurances. The most crucial is over the allocation of the funding in question.

Mr Clegg made it sound so simple when he said that money collected locally will be spent locally. However, he added a significant caveat; a commitment that no council will be financially worse off as a result of this change.

Yet he needs to be aware that some areas generate more money in business rates because of their strong commercial base – money that is then reallocated by the Government. How will Mr Clegg’s intentions work when there are towns across Yorkshire that simply cannot compete with some of the wealthy boroughs in the Home Counties?

As always, the devil will be in the detail, and Mr Clegg should, perhaps, take note of another devastating week for the retail industry. The majority of the shop closures that have been announced are in the North – and that will mean fewer stores paying business rates.

It does not end here. The fact that Bradford’s long-awaited shopping complex is being downsized, is in contrast to those retail developments in London and elsewhere that are expanding in spite of the recession.

His policy may be driven by the best of intentions – but Mr Clegg will not be forgiven if an over-simplistic approach puts Yorkshire communities at an even greater disadvantage when so many concerns persist about his government’s approach to the North.