Local government review must put economic growth first, says FSB

Friday 19 January 2007

The Federation of Small Businesses has today reminded the Lyons Review that sustaining economic growth must be the overriding priority when considering changes to the local government system.

The final Lyons Report on local government reform is due out later in the year but Sir Michael’s inquiry was given added scope to examine the Eddington (transport), Barker (planning) and Leitch (skills) reviews for their impact on local authorities.

The deadline for responses to this next stage of Sir Michael Lyons’ Review into local government closes today.

The FSB contributed comments on each of these sectors to Sir Michael as well as reminding him of the opposition of small businesses to any proposals to restore the setting of business rates to local government control.

On transport the FSB is opposing the introduction of road pricing by any level of government without a robust transport system being in place first. This would have a devastating impact on rural areas in particular. The FSB also believes that restricting the transport of goods or people would hold back the economy, leading to less wealth to invest in finding solutions to climate change problems.

The FSB also reminded local authorities that the needs of business should be the number one priority when examining skills provision. Local authorities should provide the funding but employers should inform the direction that such training should take.

The proposed move by Kate Barker in her review to streamline the planning process for major infrastructure projects was welcomed, as were proposals to cut form-filling by small firms when making minor planning applications.

Roger Culcheth, FSB Local Government Spokesman, said:

“It is vital that all levels of government put economic growth first. The wealth that businesses create can contribute to solutions to our problems via private sector innovation and public sector tax collection. The Lyons review in particular must bear that in mind.

“Transport, planning and skills are core issues to consider in creating this economic success. Often local solutions are the best ones and business has a key role in shaping the future of this country at the local level. Local authorities should make sure that they are fully aware of the needs and views of employers.

“We also re-state our opposition to business rates being set at the local level. The system did not work in the 1980s and it should not be reintroduced. Setting rates at the national level means that the cost to businesses is a national issue that demands attention should the cost rise. The UK economy depends on successful local businesses and the current system of business rates is better at ensuring that success continues.”

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