The Government’s decision to drop the Local Government Finance Bill, which would have allowed local government to retain the business rates they raise, leaves a blackhole in council finances.
Since 2010, the Government has cut over half of its funding to local government, raising questions over how long councils will be able to go on providing services without proper funding. In response, the Conservatives have said that local government would in future be able to retain all the business rates raised locally and the Local Government Finance Bill was introduced in the last Parliament to deliver on that commitment.
While the level of business rates charged are set by the Government, it’s councils which collect them. Were Crawley Borough Council able to retain all the business rates it collects it would be amongst the most well-financed local authorities in the country.
Last week’s Queens Speech failed to reintroduce the Bill, putting an end to the policy. While Labour-run Crawley Borough Council’s has already been working hard to find alternative sources of revenue to business rates on the assumption the Conservatives could not be trusted to follow through on their commitment, the Government’s decision to break their word does raises question as to how other councils—such as West Sussex County Council—will survive.
Peter Lamb, Leader of Crawley Borough Council, said:
“Crawley’s hard work generates one of the largest business rate collections in the UK, yet every year while the Government happily takes our rates the cuts they pass down to Crawley are worse than those of our neighbours.
“By reneging on their promise to let us keep our rates the Conservatives have again proven the only way they think of Crawley is as a cash cow for Tory districts.”