The County Councils Network (CCN), District Councils’ Network (DCN) and Rural Services Network (RSN) have jointly welcomed the Government’s intention to move to 100% retention of business rates by 2020. Clearly this is ambitious, complex, and challenging, but our networks can support this if it enables further devolution, ensures key services are sustainable over time, and allows localism to flourish.
We support this ambition on the basis that it will enable further local autonomy and self-reliance, as well as encouraging and rewarding future growth.
Clearly, the new system will be highly complex to design, but it must be made as simple and as fair as possible, and needs led from day one to ensure that local authorities are incentivised and rewarded for achieving growth.
Any new system of funding must be sustainable for local authorities in the short, medium and long-term. Equally the impact of Government policies on major infrastructure and commercial decisions, e.g. power stations, to dramatically affect an area’s business rates prospects must be recognised and taken into account.
It will be crucial that all areas can invest in long-term growth, in consultation with businesses, including the ability to use an infrastructure levy if there is agreement locally.
Depending on whether the economy grows or declines, there will be both risks and opportunities for local government. Both district and county areas will have a significant national role to play in supporting, encouraging and promoting growth. However, this must be adequately supported by Government through a system of appropriate incentives and rewards. And Government funding and strategies for capital infrastructure investment must be demand-led and not purely focused on cities.
Equally, atypical pressures on demand-led services in county and district areas – which continue to rise – must be fully recognised through the fair funding review and business rates system. This will play a key role in adjusting funding for adult social care, public health and prevention, supporting the NHS and funding the everyday services people value most.
Our networks have, therefore, collectively identified core principles that are integral to ensuring an effective and fair funding system. Alongside these principles we have identified key issues which must be addressed in relation to the needs review, the new business rates system and wider funding and investment.
We remain committed to working with the Local Government Association (LGA), professional organisations such as Cipfa, ministers and relevant Whitehall departments, to support the re-localisation of business rates. While our networks will reply individually to these consultations, our responses will also reflect the shared principles that we have identified in this document.
Cllr Paul Carter, Chairman, County Councils Network
Cllr Neil Clarke, Chairman, District Councils’ Network
Cllr Cecilia Motley, Chairman, Rural Services Network