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Scotland to offer most competitive business rates in UK

Deputy First Minister and Finance Secretary John Swinney yesterday announced the local government finance settlement which maintains funding on a like-for-like basis in both 2014-15 and 2015-16 with the allocation of additional money for new responsibilities.

The Deputy First Minister also announced the Scottish Government will maintain its economic position by matching the English poundage rates.

Alongside the Scottish Government’s estimated £618 million package of rates reliefs for 2015-16, this ensures Scotland remains the most competitive business tax environment in the UK.

Following agreement with COSLA earlier this year, the needs-based formula has again been applied in its entirety to the settlement for 2015-16. Additional funding of £241 million has been allocated since the Draft Budget 2014-15, including:

· £54 million to give all children in p1 to p3 access to a free school meal

· £44 million to fund extended pre-school entitlement

· £38 million for the Scottish Welfare Fund

· £35 million to fully mitigate the impact of the Bedroom Tax

· £6.5 million to support administration costs of the Council Tax Reduction scheme

· capital allocations increasing by £39 million in 2015-16 to support the extended pre-school entitlement

The Local Government finance settlement for 2015-16 is £10.85 billion, made up of total revenue funding and total capital funding.

Announcing the local government finance settlement in parliament the Deputy First Minister said yesterday:

“Today’s settlement builds on our joint priorities and is focussed on growing the economy, protecting front-line services and supporting the most vulnerable in our society.

“In 2015-16 we will provide a total package of almost £10.85 billion in support of local authorities’ services, with an additional £241 million to deliver specific action to help those affected most by the Westminster cuts and to support our youngest children with more childcare and free school meals.

"This settlement is set against the challenging fiscal environment and the austerity measures which are set to continue with an estimated £15bn of cuts to public spending in Scotland from Westminster to public services. Despite that context the terms of this settlement offer to local government continues to represent a very fair settlement.

“In return for this package of resources, local authorities will require to deliver a council tax freeze for the eighth consecutive year and secure places for all probationers who require one under the teacher induction scheme.

“Local government and the essential services they deliver are an integral part of the overall good governance of Scotland and continue to be a critical partner in the Scottish Government’s transformative programme of public service reform.”

On business rates, the Deputy First Minister said:

“This government has a clear commitment to the most competitive package of business taxation in the UK.

“Our overall package of rates reliefs provides increasing support to businesses, estimated at £618 million for 2015-16. Scotland remains the most competitive business tax environment in the UK and I can confirm that in 2015-16, to maintain our competitive position, we will continue to match English poundage rates.

“I am also pleased to announce an agreement with COSLA to a revised Business Rates Incentivisation Scheme which will provide a more focussed incentive to local authorities by enabling them to increase revenues where they generate higher levels of growth.

“In addition our Community Empowerment bill, currently in parliament, contains provision for local authorities to offer targeted rates relief to stimulate economic growth in their areas.

“And we are continuing our business rates review with a consultation on the appeals system to support businesses ahead of the next revaluation.

“Our Small Business Bonus Scheme has benefitted a record high of over 96,000 - that’s 2 in 5 - properties. Eligible businesses will this year be up to £3,140 better off than competitors located in England – even allowing for the temporary extension to the Chancellor’s equivalent scheme.”

Notes To Editors

For full transcript of the Deputy First Minister’s address please visit http://news.scotland.gov.uk/Speeches-Briefings/UK-Autumn-Budget-Statement-and-Local-Government-Finance-Settlement-1359.aspx

For previous reaction from the Deputy First Minister to the Autumn Statement please visit:http://news.scotland.gov.uk/News/Scotland-pays-the-price-for-UK-austerity-12e8.aspx andhttp://news.scotland.gov.uk/News/DFM-statement-on-stamp-duty-12e9.aspx 

The Local Government Finance Circular (Number 9/2014) will be found here:http://www.scotland.gov.uk/Topics/Government/local-government/17999/11203