Nick Clegg: Speech to the LG group Annual Conference

Nick Clegg said:

"Every Government preaches localism. This Government will practice it. In terms of real decentralisation, money talks.

"We need to reverse decades of centralisation to make our communities masters of their own economic destinies.

"We have to create the conditions for communities to invest in their own success. That means putting our money where our mouth is to give you proper power over spending as well as more control over the tax you raise and keep so, for example, you can fight for businesses to come to your town.

"You know we'll shortly be publishing detailed proposals for consultation. I can also confirm we will follow that consultation with a Local Government Finance Bill, so that this power shift is set in statute.

3 Key Points

1. "We will localise the retention of business rates. No ifs, no buts, no maybes. You currently control less than half your budget. With rate retention, it could become 80 per cent or more."
2. "I guarantee any new system will be fair. More deprived areas will not lose out. From the start, no authority will receive less funding when the new arrangements are introduced than they would have done previously."
3. "Will introduce Tax Increment Financing. Freedom to borrow against business rate income helping to unlock the development potential of their areas and increase Councils' income."

"You asked for new borrowing powers and to be given back business rates - we're delivering it. You've told us you want change but any reform must be fair - we've heard you. But now it's up to you to help us make this work. We have an unmissable opportunity here. If we get this right we can win the argument for localism once and for all."