Brokenshire: Rates retention will drive local government finance reform

11 Jan 19

Business rates retention will be “at the heart” of more self-sufficient local government, the communities secretary has said.

Addressing the Local Government Association’s finance conference this week, James Brokenshire said that increased business rates retention will give local authorities “more control” over the money they raise.

“Our business rates retention reform consultation will build on my department’s existing work with the sector to improve the way local government finance works,” he told delegates.

He added: “Business rates retention will be at the heart of this change – the engine of self-sufficient growth-led local government of the future.”

Brokenshire said that though  today’s business rates system, local authorities estimate they will retain roughly £2.4bn in business rates growth in 2018-19.

The communities secretary announced in December’s provisional Local Government Finance Settlement that 15 more councils will take part in the 75% business rates retention pilots.

In December, the Ministry of Housing, Communities and Local Government received £35m of a £2bn fund from the Treasury to begin planning for a no-deal Brexit – Brokenshire subsequently wrote to the chancellor to say it needed more money.

He told the LGA conference that the allocation of the £35m would be announced “shortly”.

On Brexit, Brokenshire remained optimistic and said: “Brexit will generate a number of opportunities for local government.

“We all have a duty to ensure every community can benefit from a modern, outward-looking Britain after Brexit. And no one is better placed to deliver that than you, and local authorities will be, I think, at the heart of our success.”

Also speaking at the conference was Brokenshire’s opposite number, shadow secretary of state for communities and local government Andrew Gwynne.

He warned that the local government finance system is “broken” and said government “needs to ask itself some difficult questions.”

He criticised Brokenshire’s provisional local government finance settlement, suggesting that the £650m available for adult and children social care is “pitting adults and children against each other”.

Gwynne also condemned the government’s ongoing failure to publish a social care green paper.

Health secretary Matt Hancock recently told the House of Commons that he intends to publish the social care green paper before April.

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