Brexit means local government is going to have to do an awful lot of thinking about supporting businesses.
From lobbying to providing more practical examples of help, we are going to have to be more proactive.
In Westminster, we have a new dedicated cabinet member for business and there’s a lot for him to think about. Elsewhere, colleagues will be looking closely at our international ‘twinning’ arrangements to help open new markets and support trade discussions to encourage activity that will bring growth. Here in London, much of this is delivered through the mayor but in other parts of the country, local authorities or sub-regions will be directing activities and this vital work must be strengthened.
There will be a lot of uncertainty about job security and for small and medium businesses, concerns about cash flow. That’s why we need to create a supportive environment in terms of advice, business rates collection, how invoices to councils are to be paid and over what time period, etc. So whilst none of this is new, we need to accelerate our plans in order to have a positive impact on our relationship with business.
On a more strategic footing, we need to think more deeply about how we can develop our networks and use our influence to maintain strong economic foundations in our towns and cities.
Here in London there is obvious concern about the impact on the city. In Westminster there is a huge financial and commercial sector that is based within the West End – it’s not just in the City of London. Businesses here are understandably concerned about how any changes to the single market will affect them. So, like many other councils, we are very mindful that public bodies must work very closely with the private sector in order to maintain investor confidence and prosperity in our areas.
In addition, we also have the added challenge of business rate revaluation that is causing great concern in London, where some businesses are worried if they can meet the increases; a significant number face increases of over 100%. We are working hard to create an environment to support the lobbying campaign of businesses and look at how we can help them maintain investment levels at a time when firms and entrepreneurs are being cautious about committing to long-term investment. We will also continue to work together to challenge some of the thinking around changes to business rates.
The forthcoming transition in local government finance means our unique position to build on and develop strong relations with other private and public institutions will be at the forefront and centre of our thinking. We will be working with the Greater London Authority, London Councils and the City of London on all the issues listed above.
But, despite all the challenges, there has been no better time for local authorities to use their civic leadership role. Westminster, along with Camden LBC and Transport for London as part of the West End Partnership, has bid for a Tax Incremental Financing arrangement in which Westminster would retain a larger proportion of business rates locally. This is aimed at helping to promote investment in the West End’s public realm that will, in turn, unlock private sector investment. As a result, it should give businesses the confidence to consider investing at a time of some uncertainty and maintain investor confidence. Discussions with central government about the bid are ongoing.
We estimate the initiative will provide more than £400m of new public funding over 15 years. This would be invested in infrastructure improvements and encourage inward investment that would create £12.3bn in additional economic output and generate at least £2.5bn in additional tax, as well as over 100,000 jobs and productivity gains in the UK economy.
Westminster is also working with the Greater London Authority and others in devolution discussions to improve the skill offer in the capital to help business competitiveness and we want to use the London Finance Commission to provide London with the right fiscal tools to enable us to be in control of our own destiny post-Brexit, to support businesses in Westminster and the capital.
So, in 2017, local government should all be looking to build confidence and relationships that help to manage the uncertainty our business partners may be feeling. But this shouldn’t just be a one-way street. In return, as we forge closer links, we need to ensure that businesses are collectively looking after the interest of the place and providing real and tangible dividends for our communities.
Finally, in the context of ongoing austerity, the uncertainty created by the Brexit negotiations means that it is vital that we work more collaboratively with our businesses, local partners and neighbouring authorities, in order to generate the prosperity that will enable our residents to succeed. We need to strengthen any joint work with our respective business community and work together to ensure ongoing economic success.
Charlie Parker, chief executive, Westminster City Council