Camden calls for more control over business rates
Camden Council has called for major reforms to business rates and for Whitehall to give local government more power over business rates to support economic growth.
The council makes a number of asks in its response to the Government’s consultation on business rate retention. It believes that councils should have greater financial autonomy and control over how much companies are charged for their business rates and be rewarded for creating economic growth.
“Nearly 2% of national growth is created in Camden and the 29,000 businesses here contribute, in total, the eighth highest rate collection in the country. But we currently only retain about £1 in every £6 of the business rates we collect, with the rest redistributed across the country by Whitehall.
“Under the current system, the council has few opportunities to develop incentives encouraging businesses to invest in Camden or support job creation and if we do this, we have less money to spend on critical services.
“If Camden, not Whitehall, controlled more of our own business rates we could make the borough an even more attractive destination for the businesses of the future such as tech firms and life sciences.
"It is critically important for Camden and the UK after the Brexit vote that Camden remains a great place to do business."
Appeals reform
Camden also joins with London Councils in calling for an overhaul of the appeals process.
“The current system of appeals has created an unacceptable level of funding uncertainty for councils like Camden. We have had to set aside £13 million to provide for successful appeals – funds that cannot be invested in important public services.”
“About 27% of appeals are successful, but as it is impossible to know how many businesses will appeal each year we cannot plan our budgets with any certainty. We received 1,057 appeals in the last calendar year and we have 3,176 appeals still outstanding.
“This is an intolerable position for local authorities facing ever shrinking budgets and increasing demand for services.”
The Council also argues that the new business rate system, which the government intends to introduce by 2020, should reward Camden for our investment in infrastructure such as housing, schools and community facilities and making Camden increasingly attractive for businesses.
“These investments make Camden a better place to do business, so it is fair that we should keep the additional income from the economic growth they generate.”
Other recommendations in our response include:
- Ensuring that the revised funding formula takes into account the full range of pressures facing Camden such as rapid population growth, large daytime populations, housing pressures and areas of deprivation.
- Any new responsibilities placed on councils should be fair and enable economic growth such as employment and skills. It is not acceptable to transfer spending commitments where there is no policy devolution.
- Greater control over discounts, reliefs and the multiplier to enable meaningful local decision making to drive economic growth.
- Address the impact of appeals, which tie up public funding that could be used to deliver local services and improvements.
- Allow further fiscal devolution to councils by giving more power over council tax and more freedoms in setting fees and charges.
Our full response is available at camden.gov.uk/mtfs