The Government are proposing to introduce what they see as a fairer way of collecting and distributing the taxes we collect from our businesses.
At the moment business rates are set centrally, collected locally and redistributed. Until now they have been paid to the Treasury and redistributed to all local authorities according to need and population.
Areas of high need and deprivation get the most money. That always seemed fair to me. These areas stand to lose the most if the Government fails to protect them.
Under the proposed new system there will be winners and losers. Westminster, without any protections in the new system, could benefit from over a £1 billion extra, while we would lose a significant amount on this formula.
This obviously leaves me with many unanswered questions; for example how do they intend to localise business rates without cutting funding to areas like ours?
Like a London School of Economics expert recently said: “The risk is the northern authorities will find it impossible to attract businesses as fast as councils in the south. If that happens, the gap between the south and the north will widen.”
The Government have said that no council will be worse off in the first year, but what about subsequent years?
We will have to wait and see.