Money raised through business rates will soon be kept by local communities, under new government plans due to be announced today.
Currently, money paid to councils in England by businesses is passed on to the treasury and then divided, before being passed back to local authorities to help them pay for things such as fire services and the policing.
Deputy Prime Minister Nick Clegg is due to address the Local Government Association conference in Birmingham later today. A report by the BBC said Mr Clegg will tell delegates that he wants to see the money ploughed back into local communities, and to give councils more power to spend it as they see fit.
He will say: "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."
Mr Clegg will also stress that areas with fewer businesses will not lose out and no authority will receive less money under the new arrangement.
