COUNCILLORS have responded tentatively to George Osborne's announcement today that local authorities will be able to keep all of the proceeds from business rates raised in their area. 

Labelled "the biggest transfer of power to local government" for decades, the announcement means local councils such as Bracknell Forest and Wokingham will be able to increase or decrease the rates businesses pay from 2020 when the current system is dropped.

The change has been hailed by the Tory government as an extra £26bn for councils across the UK and as 'fantastic' news by some councillors - but they are still approaching the policy with caution as they await full details to emerge.

Cllr Marc Brunel-Walker, executive member for the economy and regeneration at Bracknell Forest Council, said it was 'potentially' great news but couldn't confirm whether rates in Bracknell would rise or fall. 

He said: "I think potentially it's great news because you are putting the control in the hands of councils when it comes to business and the most important thing in the world in attracting business and investment. 

"It's great to hear. It's something local council's have been asking for for a long period of time. It's fantastic news for the regeneration.

"It's only just been announced, we haven't read the policy documents or discussed it so I can't say how things will change yet.

"But it's not just going to be £26bn of free money to councils there will be a change to how council finances work."

Labour have expressed concerns about the plans calling for safeguards to protect poorer areas who may be hit hard by the removal of the current grant system. 

Anthony Pollock, the Conservative executive member for finance at Wokingham Borough Council, was also cautious about the new plans saying governments rarely give without taking away.

He said: "As I said to one of my colleagues who was at the conference there's always a catch.

"The government rarely give us with one hand what they don't take away with another.

"On the surface this is extremely good news but I have yet to see the detail and the devil is always in the detail.

"Given where the government finances are it looks like we will keep the business rates but the government grant they give us might change.

"If we got a lot more money somebody else would lose the money.

"The more local government can pay for itself either out of council tax or business rates the better but there are authorities in the county that would struggle to do that."

All businesses have paid a uniform rate set by central government since 1990 when Margaret Thatcher attempted to limit the power of local government.

The local council then sends all the proceeds from rates to the Treasury who distribute the money around the country via grants so local authorities with fewer businesses do not miss out.