New rate powers for our local authorities unveiled

Norfolk County Council. County Hall. Photo : Steve Adams

Norfolk County Council. County Hall. Photo : Steve Adams - Credit: Archant

The region's councils will be handed new powers over their business rates as part of the chancellor's 'devolution revolution', it has been announced.

The current system, in which the levies are handed to Whitehall to be redistributed to town halls in grants, will be replaced with a system in which local authorities will be able to keep 100pc of the cash they raise from local companies from 2020.

While the move was welcomed by council representatives, who said it should help boost investment in infrastructure and public services, there are concerns that it could result in bigger bills for companies and would not be a reliable funding source. The announcement comes amid a rallying cry for councils to bid for devolution, which has seen Norfolk and Suffolk councils rush to draw up plans for a new combined authority. The EDP has called for a careful, measured and transparent debate about what devolution could mean amid pressure from the government to draw up plans ahead of the Spending Review next month.

The chancellor put further pressure on councils to make a deal with the government, annoncing that they would be freed to add a premium to pay for major infrastructure projects if they agreed to an elected mayor.

Alan Waters, leader of Norwich City Council, said the proposals needed to be viewed alongside the suggested phasing out of other funding streams.

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'As business rates are subject to economic ups and downs, they are unpredictable by nature and therefore not a funding source we could rely on to fund core essential services,' he said.

South Norfolk council leader John Fuller, who has a leading role in finance at the Local Government Association, said councils would have a direct incentive to grow their economy, but added: 'There will have to be a mechanism so the gainers can help the losers. This is detail that needs to work out.'

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