Councils cautious over Chancellor’s business rates pledge

Chancellor George Osborne  on a visit to Eastbourne Enterprise Centre
Chancellor George Osborne on a visit to Eastbourne Enterprise Centre

Plans for regional councils to receive 100 per cent of business rates has been met with caution from Rother District Council (RDC) and Hastings Borough Council (HBC).

Chancellor George Osborne pledged at the Conservative Party conference on Monday (October 5), all £26billion of business rates collected would be retained locally by 2020, instead of being sent up to Whitehall.

Local authorities will be free to reduce rates if they can afford it in the ‘biggest transfer of power to local government in living memory’, according to Mr Osborne.

The plans seem positive on the surface - more money for councils on the surface, but HBC leader Peter Chowney is not convinced.

He is concerned places like Hastings will be worse off as they do not collect as much business rates as more affluent places so he hopes the rates will be distributed fairly.

“It could be good news but it remains to be seen what the detail is,” Mr Chowney said.

“I am worried Hastings might miss out.

“Having local control of rates on the surface would be good which we haven’t had since the 1990s.

“But there needs to be some sort of equalisation scheme.”

The council leader said the government is planning to scrap central grants to local authorities as , in theory , they will generate more money through business rates.

But he said that would not be good for Hastings because there is no space for more business parks and they would suffer without central grants.

“We will never raise enough locally to do without the government grants,” he said.

“It’s difficult for us because all very well saying grow local businesses but where are we going to put them?”

RDC’s executive director of resources Malcolm Johnston was intrigued by the announcement but remained coy on saying whether it would be good or bad for the authority.

“We listened with interest to the Chancellor’s statement on potential changes to business rates and look forward to receiving further details to enable us to assess the impact on Rother.”

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