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Maintaining the 80:20 split is essential to district councils' sustainability

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The District Councils’ Network (DCN) has long argued that districts need business rates incentives that are significant, predictable and permanent to stimulate economic growth in our areas.  It seems that a landmark lobbying victory for the sector has been won, and the news is to be welcomed.

As we rejoice in the Chancellor’s news, it is incumbent upon us to fully grasp the details and implications for our members, ahead of next month’s Spending Review.

Neil clarke

Neil Clarke

Moving ahead, we must and will make sure a district voice is heard in the Treasury working committees.  This is to safeguard our members’ financial interests from any unforeseen impact of the proposed new arrangements.  Such concerns include the extent of redistribution between authorities, the implications for tariff authorities and the strength of protections for financially weak councils.

Similarly, we must all keep our eyes on the 2020 reset on business rates to prevent the law of unintended consequences affecting planning and investment decisions.

We must keep our eyes on the 2020 reset to counter the law of unintended consequences

Continuing uncertainties remain about the financial implications of historic business rates appeals being funded by councils, rather than by the government, who received the benefits of the income in the past.  We strongly feel that this historic cost must be met by central government and must ensure this is taken account of under any new system.

More positively, the DCN is also keen that our efforts in working with Whitehall bring forward the timescales for implementation of this much-longed for fiscal reform.

Indeed, securing financial independence remains a core campaigning goal for DCN.  News that the Revenue Support Grant is to be abolished was not, perhaps, the greatest of shocks. All the same, our work is now cut out in understanding how the phasing out of core grant will affect our diverse membership.

This suggests a deep dive research exercise among DCN members to uncover the timescales for approaching financial self-sufficiency over the current parliament - once we have a grip on the extra fiscal consolidation measures to be announced in next month’s Spending Review.

For shire areas, the DCN’s contention is that preservation of the current 80:20 split in extra business rate yields is essential to the financial sustainability and integrity of district councils.  Similarly, it is vital that the New Homes Bonus scheme continues in its current form as a source of funding used by a large proportion of district councils in the support of housing growth programmes.

In summary, let’s work to get business rates fully devolved before the end of the decade. 

Neil Clarke (Con), chair, District Councils’ Network, and leader, Rushcliffe BC

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