QUOTE (Exhausted @ Jan 30 2016, 11:22 AM)
The only fly in the ointment that I can see is that there will be another election by 2020 which may change that promise.
I believe the promise is that councils will retain 100% of business rates by the end of the current parliament (ie before the 2020 election).
As I see it the issue is whether the promise will be fulfilled in the light of all the other setbacks Osborne has had recently.
QUOTE (Exhausted @ Jan 30 2016, 11:22 AM)
If WBC only get a proportion of their industrial rates back and that seems to be declining year on year does that mean we are supporting towns "up north" and if so when 2020 arrives, where will they get their support from then.
I like the way Blackdog has worked this financial problem through and wonder if the council could borrow on a promise and what would happen if it all went tits up with a change of direction by central government or a new reducing multiplier added when they realise how much revenue they might be losing.
I don't think the
retained portion of business rates is declining - as I understand it it is rising. Councils keep half of all new business rates - which surely can't explain the £17m retained in 2013/14 but would result in a steadily increasing retention (though perhaps not a huge change).
Revenue Support Grant is indeed (in theory) an means of sharing out business rates across the country and wealthy regions (like West Berks) do end up supporting depressed areas (not necessarily 'up north'). I am not at all sure that the sums are balanced - I suspect that, in typical Treasury fashion, they simply take the rates as income and spend the RSG with no limitations (much like Vehicle Excise Duty is not all used to fund road maintenance or development). The Governments big problem is what to do with councils who cannot be self financing. If WBC get a £36m windfall there will be poorer areas where business rate income does not match their RSG.
The Government is committed to phasing out RSG and allow councils to keep business rates - a localisation policy that should be of huge financial benefit to WBC. A £36 hike in revenue on a budget of around £120m should make an enormous difference. For instance a 25% council tax cut would be affordable, along with a similar cut in business rates. The downside being that being a low tax area would encourage immigration and the resultant need to build build build.
But should they simply cut taxes? Or should they provide free car parking, a new road or two, improved social services . . . ?