Ministers must allow councils to keep between 40% and 60% of the increase in their business rate income if their proposed local government finance regime is to encourage growth and protect vulnerable areas, a leading think-tank has predicted.

Centre for Cities reacted positively to the publication of Communities secretary Eric Pickles' consultation on business rates reform on 19 July, claiming it was a significant step towards greater financial autonomy from central government and that it rightly prioritised local growth incentives.