Dermot Finch, Director Centre for Cities, said:

'Ministers should now implement Sir Michael's short-term recommendations – especially supplementary business rates, extra funding flexibility for local councils, and proposals to make Council Tax clearer and fairer. Over the long term, Lyons' proposals will enhance the role of local government, and give local councils the tools they need to support economic growth.

'It is essential that Council Tax revaluation take place as soon as possible. The longer Ministers leave it, the more painful it will be. In the longer term a more radical shift in the balance of funding from central to local government needs to take place.'

Notes to Editors:

The Centre for Cities' City Leadership report (Feb 2006) recommended the use of supplementary or ‘top-up' business rates to fund transport priorities in big urban areas. For example:

• Birmingham: A 2p business rate ‘top up' in Birmingham City would yield £15.4m per year – which would support a ten-year loan of £118m. This would eliminate the funding gap for the New Street Station redevelopment – which currently stands at £114m.
• Manchester: A 2p business rate ‘top up' across Greater Manchester (10 authorities) would yield £40.6m per year – and support a ten-year loan of £310m. This comes close to covering the local share of Metrolink Phase III (£380m – on top of £520 from DfT).
• Leeds: A 2p business rate ‘top up' in the Leeds City Council area would fund nearly 40 per cent of the cost of the proposed Bus Rapid Transit network – the successor to the cancelled Leeds Supertram.