Southwark Council’s finance boss has said she is not rushing to welcome radical changes announced by George Osborne this week which would allow local authorities to keep hold of millions raised in business rates every year.
The borough will collect £215 million in business rates this financial year but currently has to hand it all over to central government, which then redistributes the national total across the country, so that places with fewer businesses still have money to fund services.
The Chancellor’s announcement at the Conservative Party Conference this week would mean councils like Southwark would no longer receive a government grant, which this year will total £195million for the borough, but they would be able to keep the business rates they collected.
Cllr Fiona Colley, Southwark’s cabinet member for finance, is remaining cautious in her response to the news, which could see the borough’s coffers swelled by £20million.
“While Southwark could benefit from these changes, we won’t rush to welcome them until we are clearer on the details,” she said.
“Our central London location, and the fact that the council has done a huge amount both to bring big businesses to the borough, and to support small and medium sized enterprises, means that we generate a good amount of business rates relative to many other councils. However, the devil is in the detail, and if we lose other funding streams and are expected to take on even more services, any benefit for our residents could be lost.
“We do welcome, however, any signs that government is devolving powers to councils, which are best placed to serve our local communities,” she added.