BCSC calls for incentives to promote growth
Published: 18 July, 2011
BCSC is calling on government to balance local authorities’ financial needs with strong incentives to promote private-sector led growth as part of its Local Government Resource Review.
The review is intended to devolve greater financial autonomy to councils from Whitehall, and is expected to open for consultation in August.
In particular the review is expected to contain plans that allow councils to retain an element of their business rates income, in order to encourage local authorities to promote growth.
Whilst BCSC supports these measures in principle, it has concerns about the strength of the plans, arguing that the measures must be powerful enough to provide councils with a significant income stream.
Edward Cooke, executive director at BCSC said: “Details on the proposals for how a rates retention model will operate have been scant so far – in particular in relation to the inevitable need to redistribute money between some authorities.
“Above all this should be about incentivising growth through handing councils the ability to increase their revenue, so it’s vital that this mechanism isn’t then neutralised through a comparable reduction in funds from central government – such as through the revenue support grant.”
Furthermore, BCSC argues that financial autonomy for councils must stop short of allowing them to set their own business rates.
Cooke continues: “We are strongly against a fully re-localised business rate which would make it difficult for our retail members to budget for their expenditure were councils able to increase the rate on demand, reducing business efficiency, and therefore adding costs.”
BCSC has also reiterated its support for a private-sector led Tax Increment Financing scheme – the Local Tax Reinvestment Programme or LTRIP - which allows willing developers to forward-fund schemes in return for future tax receipts over a limited period and for a prescribed amount.
