The Act gives upper tier local authorities (County Councils, Unitary Authorities and, in London, the Greater London Authority) the power to levy a local supplement on the business rate and retain the proceeds for economic development.

The main elements of the Act are:

• A new power for upper tier local authorities to levy a local supplement on the business rate and to retain the proceeds for investment in that area;

• Safeguards for business, including: a requirement that proceeds should be spent on economic development; consultation and, in certain circumstances, a ballot of businesses that would be affected,  a national upper limit to the levy of 2p per £1 of rateable value; an exemption for all properties with a rateable value of £50,000 or less;

• Flexibility for authorities to: decide the duration of the supplement; reduce liability for the supplement for properties above the £50,000 threshold; and to decide whether to offset Business Improvement Districts levies against liability for the supplement.

The main benefits of the Act are:

• To promote the long-term economic growth and productivity of those areas that levy a supplement, by supplementing investment in additional projects (e.g. transport infrastructure) that support economic development.

In addition to the arrangements in the Bill the Government:

• plans to develop Multi-Area Agreements between local authorities and their partners to improve the economic development outcomes across a sub-region;

• is consulting on proposals to introduce a new statutory duty to assess local economic conditions and to give regional development agencies lead responsibility for regional planning (in response to the Review of sub-national economic development and regeneration).