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Leader lobbies government for ‘no strings’ business rates deal

Essex County Council’s leader Cllr David Finch lobbied MPs in February for urgent clarity over the Government’s business rate reform plans.

Cllr Finch was invited to give evidence to the CLG Select Committee where he sought greater transparency on plans to let all local councils keep 75% of business rates from 2020/21 when central Government funding ceases, eventually moving to 100% retention.

In Essex, £625 million of rates are currently collected but just £304 million is spent locally – the rest goes back to the Treasury.

“Keeping business rates would give us the financial stability we need to realise our strategic ambitions for Essex and drive prosperity for all,” said Cllr Finch.

When central Government grant funding comes to an end in 2020/21, the Council estimates a funding gap of £94 million.

If the Council, along with Southend Borough Council, district, borough and city councils, had been chosen to become a 100% retention pilot area, local councils would have received £38 million of extra funding, including £8 million for Essex County Council.

Cllr Finch said: “It is unclear if the 75% scheme even helps. The additional 25% comes with a series of commitments, such as business rates being used to fund items like public health, which is currently funded by a separate grant.

“So we will lose the specific grant but maintain the requirement to deliver the service. The majority of funding under the 75% scheme is therefore merely a transfer of funding streams, it does not provide any additional money.

“We need greater clarity as a matter of urgency so we can plan safely for the future.”