THE deputy leader of Barnet council has cautiously welcomed the news councils will be given greater controls over business rates.

Chancellor George Osborne announced on Monday (October 5) local authorities will keep 100 per cent of the £26bn they raise  annually from businesses from 2020.

Under the system, the uniform business rate – which imposes a single rate on every council – will be abolished, and councils will be able to set their own.

As a result, the Government would stop paying councils its revenue support grant, which they currently rely on to pay for services.

Mr Osborne told the Conservative Party conference in Manchester the reform will create new incentives for local authorities to compete for business investment.

Councillor Daniel Thomas, Conservative deputy leader of Barnet Council, said: “We welcome further devolution of power from Whitehall to local government, and giving councils greater control over business rates is potentially positive as a lever to stimulate local economic growth and business success.

“However, we’ll need to consider this in the round with the wider Local Government settlement following November’s Spending Review.”

Cllr Thomas added: “We have invested more than £4m in our town centres over the last three years, and our Entrepreneurial Barnet approach has seen us help over 300 local businesses get high speed business broadband over the last 12 months.”

The announcement was met with concern by Frances O’Grady, the Trades Union Congress general secretary, who warned “regional inequalities will get wider” unless safeguards were introduced for councils in poorer areas with low business growth.

Councillor Alison Moore, leader of the Barnet Labour group, said: “With a change like this, there will be winners and losers, and the devil is in the detail. We don’t yet know what the impact is for Barnet.”

Asked whether it could lead to poorer London boroughs losing out as a result, Cllr Moore said: “There is already a redistribution mechanism involved in the rate support grant, and inevitably there will be a redistribution mechanism of some sort. But yes there is that danger, that it could do, but it is too early to say what the implications are.”

The move has been welcomed by the Federation of Small Businesses (FSB) as a a "huge opportunity".

Sue Terpilowski, London Policy Chairman for the FSB, said: “The Chancellor’s recent announcement to allow councils to retain business rates presents a huge opportunity for local authorities and business to work together to boost local growth, develop a fairer tax system and create the jobs of the future.

“We await more details about the changes knowing there will be challenges to get the new system right and make sure that businesses are not short-changed. It is essential the new rates structure works for all our 5.2m small businesses across the UK, including the 927,000 operating in London.”