The Government has issued a consultation document on the implications for local authorities of being allowed to retain Business Rates revenue.
First, the good news:
“By the end of this Parliament, local government will retain 100% of taxes raised locally. This will give local councils in England control of around an additional £12.5 billion of revenue from business rates to spend on local services.”
But there is a catch:
“In order to ensure that the reforms are fiscally neutral, councils will gain new responsibilities, and some Whitehall grants will be phased out.”
Later on it lists some of the options.
Revenue Support Grant could be cut. That would be the obvious solution. However there are also an array of other grants from central Government:
- Rural Services Delivery Grant. A booster for councils “ranked by super-sparsity.”
- Greater London Authority Transport Grant. This is already due to go as part of the Business Rates settlement.
- Public Health Grant. This is an obvious candidate. The current arrangements make it the least scrutinised and most wasteful area of council spending.
- Improved Better Care Fund. This is funding “to ensure that health and social care services work together to support older and vulnerable people.”
- Independent Living Fund. This is being phased out anyway as “the introduction of the Care Act 2014 which ensures that the key features of ILF support, namely personalisation, choice and control, are now part of the mainstream adult social care system.”
- Early Years. This grant is provided to English local authorities to pay for childcare.
- Youth Justice. Money to councils from the Ministry of Justice “for the operation of the youth justice system and the provision of non-custodial youth justice services.”
- Local Council Tax Support Administration Subsidy. (Also Housing Benefit Pensioner Administration Subsidy and Local Council Tax Support.) Funding towards the admin costs for various welfare schemes.
- Attendance Allowance: “As announced in December, the Government will also consider giving more responsibility to councils in England to support older people with care needs – including people who, under the current system, would be supported through Attendance Allowance. This will protect existing claimants, so there will be no cash losers, and new responsibilities will be matched by the transfer of equivalent spending power.”
While the details have yet to be decided what it amounts to is the Government treating local authorities like grown-ups. They will be given responsibilities which they will have to pay for. But they will have be allowed to get on with it – as efficiently and innovatively as they can. There will be a shift away from an alphabet soup of ring-fenced funds and prescriptive requirements.
This change is to be welcomed.