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Cash bonanza for local authorities

Local authorities were this week heading for an infrastructure cash bonanza following a shake up of local government finance announced by the government on Tuesday.
Local government minister John Healy confirmed plans to let local authorities impose a levy on firms that stand to benefit from new public transport and road building schemes.A supplementary business rate (SBR) of 4p in the pound was recommended by Sir Michael Lyons in his review of local government finance published in March.Crossrail could be the first major infrastructure scheme to benefit from the new supplementary rate. Big business in London has already shown a willingness to contribute towards the £15bn project. 'We support in principle the idea of using SBR to fund Crossrail. We now look forward to face to face discussions with government about what the funding gap is for the scheme and how much needs to be raised from business,' said a spokesman for business lobby group London First.Powers to build and operate Crossrail will be enshrined in a Crossrail Bill in the next parliamentary session announced by Gordon Brown last week.Other bills, under the draft legislative programme for 2007/8 published last week, include the proposed Planning Gain Supplement Bill that will create a major new revenue stream for councils to pay for infrastructure.The bill will enable councils to impose a tax on increased land values resulting from the granting of planning permission for a development site.But Brown warned that the Bill was 'provisional'.'If, prior to the pre-Budget report, a better way is identified of ensuring local communities receive significantly more of the planning gain to invest in necessary infrastructure including transport - and it is demonstrated that these are a better alternative - the government will be prepared to defer next session's legislation,' said Brown.Town & Country Planning Association director of policy and projects Robert Shaw said planning gain supplement was the best option for creating new funds for local infrastructure.'It's not without its flaws but we support the planning gain supplement as the best opportunity we have had for a generation to capture a fair proportion of the uplift of land value brought about by planning decisions,' he said.

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