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The Chancellor was right that proud counties and cities shouldn’t be forced into the yearly ritual of turning up at the Treasury brandishing a begging bowl.

CCN has long argued for greater fiscal freedom through the extension of business rate retention and last week’ announcement is a strong show of faith in local government.

Paul Carter

Paul Carter

At a time when councils face unprecedented strain on their budgets, it is absolutely critical that the extension of business rate retention does not put further unnecessary pressure on county budgets.

The start point here is putting in place basic equalisation mechanisms. Central government cannot relinquish its responsibility to provide sustainable funding. Checks and balances must be developed to ensure areas with low business rate yields are able to properly fund services and there are sufficient safeguards against economic cycles and shocks.

In addition, as Revenue Support Grant is removed, the government must provide adequate resources to fully fund all new responsibilities placed on local authorities, while providing essentially needed additional financial support for social care.

The new landscape of 100% business rate retention also allows space for the government to redress some inherent inequalities in current funding settlements, at the same time as unleashing the entrepreneurial spirit of local government to drive growth and deliver efficient public services.

The Government should bring forward its planned reset to baseline allocations and review the local retention rates between district and county councils. CCN have continuously argued that existing formulae does not adequately reflect the demographic pressures in county areas and additional costs of delivering rural services, while the 80:20 ratio in local business rates between district and county councils is inequitable and requires a fundamental review.

If the system can provide baseline financial stability for counties, these reforms to local government finance could provide the impetus needed to incentivise councils to go for growth and lay the foundations of a devolution settlement for England.

Fully liberating county areas and achieving the Chancellor’s Devolution Revolution will mean trusting all areas with the ability to competitively lower business rates, and where necessary, propose additional levies.  The ability to propose a 2p levy for infrastructure projects cannot just be restricted to mayors. This is an arbitrary prerequisite, particularly given the fact that the business community will have the opportunity, through LEPs, to agree any proposal and should therefore be open to all areas.

County economies already account for some 41% of GVA in England. However, armed with the right tools, we believe we can deliver so much more for our local communities.

Cllr Paul Carter, CCN chair and leader of Kent CCre

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