Rates retention 'ambitious and complex'

THE Rural Services Network and local authorities have issued a joint statement on government plans to move to 100% retention of business rates by 2020.

The joint statement was issued by the Rural Services Network, the County Councils Network (CCN) and the District Councils' Network (DCN).

Government plans to move to 100% retention of business rates by 2020 were "ambitious, complex and challenging," it said.

But the networks said they could support the move if it enabled further devolution, ensured key services were sustainable over time, and allowed localism to flourish.

"We support this ambition on the basis that it will enable further local autonomy and self-reliance, as well as encouraging and rewarding future growth," said the statement.

"Clearly, the new system will be highly complex to design, but it must be made as simple and as fair as possible, and needs-led from day one to ensure that local authorities are incentivised and rewarded for achieving growth."

The three networks said any new system of funding must be sustainable for local authorities in the short, medium and long-term.

Equally, the impact of government policies on major infrastructure and commercial decisions must be recognised and taken into account.

The networks cited power stations as an example which could dramatically affect an area's business rates prospects.

"It will be crucial that all areas can invest in long-term growth, in consultation with businesses, including the ability to use an infrastructure levy if there is agreement locally," said the statement.

"Depending on whether the economy grows or declines, there will be both risks and opportunities for local government.

"Both district and county areas will have a significant national role to play in supporting, encouraging and promoting growth.

"However, this must be adequately supported by government through a system of appropriate incentives and rewards."

Government funding and strategies for capital infrastructure investment must be demand-led and not purely focused on cities, said the statement.

Equally, atypical pressures on demand-led services in county and district areas – which continued to rise – must be fully recognised through the fair funding review and business rates system.

This will play a key role in adjusting funding for adult social care, public health and prevention, supporting the NHS and funding the everyday services people value most.

Our networks have, therefore, collectively identified core principles that are integral to ensuring an effective and fair funding system.

Alongside these principles we have identified key issues which must be addressed in relation to the needs review, the new business rates system and wider funding and investment.

The statement said the three networks remained committed to working to support the re-localisation of business rates.

While the networks would reply individually to government consultations, their responses will also reflect the shared principles that the networks had identified in this document.


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