Robert Brown is calling on the chancellor to hand a higher proportion of business rates revenue to struggling regional economies when he makes his Autumn Statement on December 3.
“The current 50 per cent councils are allowed to retain under the business rates retention scheme could be increased to stimulate business growth and regeneration in towns and cities most affected by the recession and austerity measures.
Whilst it has already started to rouse local economies, this scheme has the potential to really spur a revival of many hard-pressed towns and cities if the amount councils can retain were to be increased to around 75% per cent.
This would serve as a real boost, generating more funds and providing greater flexibility in how the money is put back into local areas, as well as further reduce councils’ dependency on central government grant funding.
Under the business rates retention scheme, authorities keep a proportion of the business rates paid locally. It provides a direct financial incentive for councils to work with local businesses to create a favourable local environment for growth since they will benefit from growth in business rates revenues.
The chancellor has spoken in the past about creating a ‘Northern Powerhouse’ to drive growth beyond the south east. This scheme has the potential to be instrumental in making that a reality but it can only be achieved if cities like Manchester, Leeds and Newcastle are handed the resources they need to drive new business and development. The same principle applies to major centres in other regions.”
Despite sensationalist headlines that the system is broken, Sanderson Weatherall believes that the business rates system is sufficiently robust and should be retained, although it is likely to be reformed by whoever sits as the next government. In reality the amount of revenues generated is too large to be replaced in any other way.
The recent headlines about Labour wanting to force private schools to partner with the state sector or face losing some or all of their charitable relief only serves to highlight how radical change might be. It is hoped that there will be a far wider review of all current reliefs and exemptions as recommended by the 2007 Lyons Inquiry to ensure the system continues to serve its purpose after a financially volatile period.”