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Treasury backs bigger business rate grab

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Local government could eventually get its hands of the majority share of business rates growth, a senior Treasury official has indicated.

Tamara Finkelstein, the Treasury’s director of public services, said her department was also in support of the community budget pilots project, which is being road tested in four areas.

Speaking at the NLGN’s annual conference last week Ms Finkelstein said that letting councils retain all their business rate growth had been “impossible” as the sum was expected to outstrip preferred levels of public spending . Such a move would have scuppered deficit reduction plans.

Ms Finkelstein indicated Treasury support for comments made by Department of Communities and Local Government ministers that the retained slice could increase in later years. The principle of retention was “very much an indication for me of the start of a journey”, she said.

The Treasury also supported  the community budget pilot scheme as a means of increasing services while budgets were slashed, Ms Finkelstein added. “We are taking the money out…but we have to enable ways for more to be done with less.”

Responding to concerns that the necessary devolution of funding and decision making from Whitehall would not happen, she said the Treasury was working “hand in hand” with the DCLG. The community bduget pilots should ensure they made clear demands of Whitehall, she advised.

 “The key is now to distil these things into really clear asks for departments,” she said, adding on a positive note: “Those asks are not as challenging as we thought they might be.”

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