Almost three years - and four extensions - after starting his review of local government, Sir Michael Lyons has finally reported back to Ministers.

Lyons was deliberately overshadowed by the Budget, and Ministers were quick to dismiss some of his proposals. Opposition politicians, meanwhile, fired off phrases like 'tax bombshell' or 'disappointing and timid'.

Lyons has delivered a sound report, emphasising incremental action over endless debate. Radical Council Tax reforms had already been put off - so Lyons rightly focused on 'quick wins' that could give cities and towns new tools to support local economic growth.

His proposal for supplementary business rates (SBRs) could be a big win for England's cities. The logic is clear: city leaders and businesses agree that local transport improvements are crucial for economic growth. Yet cities generally can't put together the funding packages needed to get major schemes off the ground.

If Ministers accept Sir Michael's argument, Birmingham could close the £114m New Street Station funding gap, Greater Manchester could raise £310m to spend on Metrolink Phase III, and London could borrow over £3bn, one-third the cost of Crossrail.

Reaction from business was mixed. Big business organisations came out against SBRs - but London First and local chambers of commerce were more receptive.

Some local authorities, meanwhile, argued that SBR receipts should be equalised, because big cities stand to gain the most. It's true that Leeds would benefit far more from an SBR than Middlesbrough. But we have gone too far with equalisation in recent years. In the rush to avoid the 'winners and losers' debate, Whitehall has taken away councils' incentive to promote growth. Locally-controlled, locally-retained SBRs will help cities develop stronger local economies and deliver transport improvements.

On mainstream spending, three key recommendations stand out:

First, there's a strong argument for greater local flexibility over grants. Ring-fencing, 'guidance' and informal steering have prevented councils from using funding streams to promote economic development. Less top-down intervention and greater local discretion could add up to more innovation and value for money.

Second, the Government must reform the grant system to incentivise growth. Existing incentives, such as Local Authority Business Growth Initiative (LABGI), need to be improved. And there are structural problems with the current system: economic growth can result in the loss of central grant. Correcting this would be an important leap forward.

Third, Government must clarify who's paying - and for what. Most people don't realise just how little economic development funding is raised and spent by local government. Clear and transparent spending statements, appended to every Council Tax bill, will help de-mystify the balance of funding.

Lyons was never going to satisfy everyone - so an incremental approach was the right way to go. Achievable, short-term goals can start to move us away from the centralised status quo.

Ministers must now implement Sir Michael's short-term recommendations. The result will be a clearer, more enhanced role for local government - and better economic results.