The Road Surface Treatments Association (RSTA) has welcomed the Chancellor’s announcement that councils will be able to retain all their business rates income.
Howard Robinson, Chief Executive of the RSTA said: “This is potentially good news for the maintenance of the local road network as it means that councils will have access to all of the business rates raised and will be able to direct where that money is used. They currently keep up to 50% of the rates. The rest goes to Westminster.”
Shops, offices, factories and businesses currently pay a uniform business rate set by central government. Councils collect the tax and send the funds to the Treasury, which then redistributes them so that areas with fewer businesses do not lose out. Since 2013 local councils have been able to keep up to half. Central government currently takes in about £11.5bn in business rates and redistributes £9.4bn in grants.
By the end of the Parliament, local government will be able to retain 100 per cent of local taxes – including all £26 billion of revenue from business rates – to spend on local government services. Fixing the current broken system of financing local government will be a huge boost to local growth, help attract business and create jobs. The government will also abolish the Uniform Business Rate and give local authorities the power to cut business rates to boost enterprise and economic activity in their areas. Local areas which successfully promote growth and attract businesses will keep all of the benefit from increased business rate revenues. At the same time, the core grant from Whitehall will be phased out, and local government will take on new responsibilities.
Welcoming the announcement Robinson said: “Those councils who invest in the provision of a well maintained road network will attract more businesses. More businesses means more business rates income”.