Business Rates pilot could keep more cash in the County

Somerset’s County and District councils have bid to be part of a pilot scheme that could mean an extra £4m for the County Council.

The Government has asked local authority areas if they want to be part of a Business Rates retention trial next financial year and Somerset’s authorities have jointly expressed their interest.

The national pilot will test-drive proposed new arrangements for distributing the money raised through Business Rates, helping Government decide if it should roll them out across the country.

At the moment Business Rates are collected by district councils and around 50 per cent is kept by the districts, county and fire and rescue service. This is part of their core funding and is shared between them using formula based on needs. The remainder goes to central Government for it to decide how it should be spent.

Under the pilot arrangements, more of the money raised would stay in Somerset – and be available for the local councils to decide how it is spent. It is estimated that Somerset County Council could gain between £3.5m and £4m.

Councillor David Hall, Cabinet member for Resources and Economic Development, said: “Retention of Business Rates is something local authorities have been lobbying for for some time.

“Our core Government funding has been massively reduced in recent years and retaining more Business Rate income is going to be essential for local government sustainability in the long-term”.

“This would only be a trial, but if selected for the pilot Somerset would benefit from these new arrangements before most other areas”.

As part of their bid to be a pilot area, Somerset authorities had to indicate where they would intend to use additional funding. They have stated that it would fund investment that supports economic growth and for work to transform the way services are delivered to help them become more efficient and sustainable.

For the County Council, spend on transformation would be largely focused on changes in Adults and Children’s services.

The Government is expected to announce the pilot areas next month.