Local Authorities Keeping Business Rates – Will There Be a Catch?
The Local Government Secretary, Eric Pickles announced yesterday that local authorities will soon be able to keep (there is a catch) Non-Domestic Rates (NDR), otherwise known as business rates. Currently, local councils receive their funding from three main sources: grants from central government; council tax; and other locally generated income (such as fees and charges for services).
The catch is the government is not going to allow the local authority to keep all of the NDR. The government wants to make sure there is a fair starting position by taking business rates away from those with too large an amount in comparison to their current spending, and then top up those authorities with too little, again in comparison to their current spending.
Yes, on one hand it looks like the government will give greater flexibility to local authorities on keeping and spending NDR, but it won’t let local authorities set NDR, as this power will remain with the government (at the moment).
To be honest, I doubt it will mean extra money, as if you gain from the NDR, you will have a reduced amount in the formula grants handed out by the government. Still, I do believe this could work positively for Cornwall, but we won’t know for sure until the number crunchers get out their calculators to make sure.
The Communities and Local Government Department has released a ‘Plain English Guide’ to the proposals. They explain without government speak the proposals.