Almost All Councils Want More Financial Autonomy While Vast Majority Welcomes New Business Rate Retention Powers – Survey
Author: eGov Monitor |
Almost all councils in England (99.5%) want more fiscal autonomy, according to their chief executives and council leaders a new survey from the localism focused think Localis has revealed.
75% of the 195 council chief executives and council leaders want to be completely independent of central government funding, the study found. And 96% of the respondents welcomed the government’s proposal to enable local councils retain a larger portion of their business rates.
However there is genuine concern that the poorer councils would lose out under the proposed system where affluent councils get to retain large parts of their business rates. The Local Government Association urged that the new system must take into consideration the imbalances of the different local economies.
Localis, aided by Ernst & Young, has proposed a model where councils get to opt out from the central government funding scheme for a fixed period. In return, those councils would be allowed to retain a larger proportion of the business rates raised during that period.
The think tank suggests this would incentivise local authorities to pursue enterprise based economic growth in it local communities. Further, the report claims this model would only affect councils negatively whose business rates revenues fall during the fixed period.
Finally, the report also calls on the government to set up an emergency reserve fund for councils if they are stricken by factory or business closures in their area.
“The current system is broken and is in need of reform. Local government agrees. We need to put real financial power in the hands of councils again, but it will take time,” Alex Thomson, Chief Executive of Localis said.