Council to seek to take part in Business Rates pilot as budget on track
Telford & Wrekin is set to bid to take part in a national pilot scheme that would allow councils to keep all the business rates they collect next year.
The Government has said it wants to change the way it funds councils and to move all councils to this system at some point in the future and for this to replace government grants.
Now the Government gets 49% of the new business rates that councils collect and Telford & Wrekin are currently working with Shropshire and Herefordshire councils to assess whether applying joint application would be in the interests of local taxpayers.
There would be no impact on the business rates bills but the pilot could enable the council to retain all the benefit from growth in business rates as new commercial, industrial and retail premises are built. However, this would be at the expense of giving up the Revenue Support grant that the Council still receives.
It believes the pilot scheme, which must be applied for before the end of October, could see it secure a short-term increase in funding thanks to the rapid business growth in the borough. In 2016/17, the borough saw a sevenfold increase in direct foreign investment, for example.
The borough has also seen a string of business successes including securing the MoD Fulfilment Centre at Donnington and attracting car part maker Magna to build a new factory in the borough. Magna’s factory is due to open next year and will create around 300 new jobs.
The bid to be part of the pilot scheme is referred to in a report to the Council’s cabinet, which meets next Thursday (October 19).
This report also shows that the Council is expecting to end the financial year in budget, despite making almost £14 million of savings this year. Since 2010, the Council has and made savings totalling £110 million.
However the report warns it must find up to another £15 - £20 million savings by 2019. Despite expecting to be in budget by the year end, the Council is still seeing growing cost pressures in two key areas - adult social care and looked after children.
The Council has continued to invest in these two areas by making extra savings in other Council areas and by generating new income from other areas including its private homes for rent business Nuplace, its Solar Farm and Growth Fund.
Cllr Lee Carter, cabinet member for finance, said: “We are exploring the idea of this business rates pilot, because we believe it could be financially beneficial. It would also possibly further cement the rewards we reap for the very hard work this Council has put in to keep, grow and attract new business here.
“We continue our prudent financial approach during this most difficult financial period for councils ever, and we expect to remain in budget. This is a huge credit to everyone involved.
“Local government has been the victim of extensive yearly cuts to its funding by Government. In my view, these cuts have now gone too far and cannot be justified anymore by the Chancellor.
“Our communities are saying enough is enough, no more cuts. When I see on a daily basis the pressure on our budgets - safeguarding children, caring for our most vulnerable adults, repairing our roads and so much more, I know without any doubt that local council services are facing a tipping point. It is now time for a change of direction and to protect and invest in local services for our community.
“Without this, there will be many more very difficult and tough decisions to come. The position here for adult social care and looked after children mirror what is happening nationally and we must work with our communities to find alternative solutions to ways to provide many of these services in future that we can no longer afford to provide.”