Lord Porter of Spalding

South Holland District Council leader hails level of Chancellor’s business rates reform

The proposed reform to business rates has been welcomed as good news for South Holland.

District council leader Gary Porter admitted to surprise at councils being able to retain the full 100 per cent by 2020.
He was at the Conservative Party conference to hear Chancellor George Osborne announce that, in new rules to be introduced by the end of this Parliament, local authorities will be able to keep the full amount of rates they collect in their area.
Currently up to 50 per cent is sent to central government before it is redistributed.

South Holland District Council retains 40 per cent. The share is £10.568m, but after payment of tariff to government of £6.695m and other adjustments as per financing rules, the council’s budgeted national non-domestic rates income for 2015/16 was £3.697m.

Lord Porter, who is chairman of the Local Government Association, said: “Provided that there’s no devil in the detail, it’s a great result.
“This is something we’ve been pushing for for four years.
“If I’m honest I expected it might be 85 per cent by the end of this Parliament so for it to be the full amount is good news.”

Lord Porter has already confirmed that some businesses in South Holland can look forward to reduced rates.
“The details are still to be worked out, but yes this will apply to us, yes it will be good, and yes for some businesses we will reduce,” he said.

One issue to be addressed in two-tier local authority areas such as Lincolnshire is the future split of business rates income. Currently county councils receive 20 per cent of the local share of business rates and districts 80 cent.
There will also be a “safety net” measure for councils who suffer drops in business rates income of more than 7.5 per cent.

Lord Porter said the monetary value to South Holland of the reform cannot be estimated yet.
“Until the split between us and Lincolnshire County Council and the contribution to safety net is known, the amount remains uncertain,” he said.

Councils will also have the power to cut business rates, which could be used to attract business.
Lord Porter told Local Government Chronicle: “The task now is to make sure we take advantage of it and attract businesses in from abroad or new business start-ups by offering lower rates for particular sectors or new businesses.
“The real test is can you go and nick a load of business from abroad, from places like France where the bureaucracy is a nightmare.
“We have already got an advantage on the bureaucracy, now we have got an advantage on the finance as well.”

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