Cllr Joel Davidson is a councillor for Brondesbury Park Ward in Brent and was the Conservative London Assembly candidate for Brent and Harrow in May.
As a Conservative Councillor and London Assembly candidate, it has been a tumultuous last year and a half, with seismic events shaking the political kaleidoscope and offering exciting prospects for the country under a new and so far remarkably popular Government.
From the perspective of a councillor for a London borough, the coming months will see a number of even more exciting policy challenges around the implementation of fiscal devolution in London that will, from our point of view, deserve as much, if not more, attention than the matter of Article 50 or anything else in the Prime Minister’s in-tray.
I have recently been appointed to chair a cross-party panel on fiscal devolution for the Scrutiny Committee of the London Borough of Brent, and we will be carefully assessing the opportunities and challenges that this policy poses. Having lobbied for it for so long, Local Councils will be permitted by the Government to retain 100 per cent of business rate revenue by the end of this Parliament (which we still assume will be 2020), and the funding structure of local government will be changed for decades to come, so we must get the implementation right.
The Government has made laudable efforts to reduce the tax burden on small business through its Small Business Rate Relief measures that have been beneficial to the wider economy, but from the perspective of local government financing we need to understand how this will affect Council coffers. There is also the far from straightforward revenue split between the boroughs and the Greater London Authority that will lead to its own issues of accountability and ownership.
Furthermore, in April 2017 there will also be a rates revaluation review and an almost certain rates uplift for London which needs to be handled carefully, along with the changes that the Government has made to appeals against unfair rates. Within this mix of fairly major regulatory changes, a sustainable financing structure must be created that works for businesses of all sizes and for councils.
The basic tenet of the Business Rates devolution policy is a wholly sound one, and rooted in Conservative values of self-sufficient local government; let local authorities take full responsibility for the appropriation and collection of business rates within their borough. Councils should seize the opportunity for a local strategy to attract and retain a diverse mix of business activity and thus deliver a sustainable local tax base to fund good quality public services.
However, there will undoubtedly be challenges in the implementation of the policy in London boroughs such as Brent with high service needs, and thus a huge chunk of funding from central government in the form of Revenue Support Grant.The RSG will be phased out and replaced by borough-specific business rates funding. There are also interesting options around local tax flexibility, and rewarding growth in business activity that need to be fully analysed.
I have seen the impact that even the smallest enhancement of business activity has on local communities in Brent and Harrow, and firmly believe that there is a virtuous circle between good quality local shops and commerce, good housing, and a flourishing local economy.
Therefore, the successful implementation of Business Rates devolution is of the utmost importance to the overall economy. Over the next few months, I and my fellow Brent councillors will be speaking to MPs, London Assembly Members, and councillors in other London Boroughs, as we look to establish the mechanics that will enable Brent and other local authorities to implement the policy effectively.
Once we have established best practice in this area, I am confident that the Government’s policy has the ability to liberate Councils, and that we will see a much more dynamic local government service offered to residents in future.