The Secretary of State for local government has approved a bid submitted collectively by the six unitary authorities in Berkshire to inform the development of a new funding system for local government.
Along with nine other proposals from groups of authorities across England, the creation of a business rates pool across Berkshire in 2018/19 will help the Government develop its detailed proposals to devolve more of business rates income to local authorities, replacing the current grant funding arrangements.
During the pilot year, each local council will get to keep at least £1m, while the remainder will be set aside for infrastructure improvements across the county.
It is estimated that an additional £35m of business rates income collected in Berkshire will be retained within the county, rather than being returned to Whitehall as at present. This sum represents growth in the overall level of business rates income achieved since the current system of funding was introduced in 2013 and is an incentive designed to encourage local councils to invest in their local economies to encourage business growth.
Respecting this, the Berkshire authorities have committed to set aside 70% of the additional funding to make improvements to transport infrastructure in the Reading – Wokingham and Slough – Heathrow corridors. The works will be taken forward by the Thames Valley Berkshire Local Enterprise Partnership (LEP), an organisation with both private and public sector representation that has helped inform the Berkshire proposal.
The remaining 30% of additional funding will be distributed to the individual local authorities in Berkshire, in proportion to their respective contribution to the overall growth.
Cllr Jo Lovelock, Leader of Reading Borough Council, said:
“The Council welcomes this week’s announcement that the cross-Berkshire Business Rates Retention Scheme has been approved for next year. The six Local Authority areas have worked closely together to put forward a compelling case to Government, and we now look forward to continuing work with those Councils and the Thames Valley Berkshire Local Enterprise Partnership (LEP) in the year to come.
“It is important to note however, this is a one-year pilot. Public services have been hugely underfunded for a number of years. Adults and children’s social care services everywhere are at tipping point as a result of reductions in Government grants at a time of huge rises in demand for those vital services.
“I hope the government is now beginning to listen to local councils across the political spectrum and recognising that a realistic long term funding system for local authorities is needed to provide the vital services our residents rely on.”
Detailed arrangements for the approved Pilot will be agreed with the Department for Communities and Local Government over the coming month to ensure the Berkshire business rates pool is established in time for the new financial year in April.