LGA response to Government's business rates retention statement

21 May 2012 03:12 PM

Responding to the Government's statement of intent on business rates retention, Sir Merrick Cockell, LGA Chairman said:

 

"It is a step in the right direction, but with the Treasury pocketing half of business rates growth it falls well short of giving councils the level of freedom from government handouts that we want. We were hoping for a lot more ambition and a greater commitment to the kind of localism ministers have been promoting.

 

"The Government's own analysis shows that giving local communities a real incentive to promote growth by letting them keep the proceeds would deliver better outcomes than allowing Treasury to control the purse-strings, but Whitehall is clearly having a hard time letting go. The proposed model redistributes funding according to the priorities of central government.

 

"We are also concerned that the Government hasn't adequately shared the risks of negative growth with councils. In areas where the business rates base falls away sharply, the prospect of a further cut in funding of up to 10% before the ‘safety net' protection becomes available represents a big risk to manage. We think the safety net should kick in much earlier to ensure residents are not left exposed to cuts in council services at a time when their local economy is struggling."

 

Author: LGA Media Office
Contact: LGA Media Office, Telephone: 020 7664 333