Pressure group warns against letting councils keep business rates

NORTH West business pressure group Private Sector Partners has said that it has “serious reservations” about plans to let councils keep the business rates they collect rather than handing them back to central government for reallocation.

The organisation’s out-going leader, Len Collinson, said that he feared the plans would leave some parts of the region short-changed.

“My fear is that the block grants councils get from central Government from business rates could reduce dramatically for some of them under these proposals and they would be worse off,” he said.

“Some councils in the North West get block grants above what they collect in business rates. For those local authorities and those sub-regions this could result in more painful cuts. The Government has claimed it will not, but I am unconvinced.”

Local government secretary Eric Pickles has described his intention as putting councils “in control of their own destiny”, and has made it the central proposal of the new Local Government Resources review to allow council to keep the money raised through business rates for their own purposes. The government’s aim is to incetivise local authorities to encourage business growth.

However, Mr Collinson, who revealed last week that he plans to step down, questioned whether many local councils are competent enough to drive enterprise.

“My view is that councils and businesses often make unlikely couples,” he said. “In fact councils would be among the last group of bodies that business groups would want to be given such an important task to encourage enterprise.

“It is possible that cash from business rates would disappear elsewhere, especially in this era of cuts, when councils could be more inclined to spend money on what are assumed to be vote-catching services.