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Sussex councils pool ideas to keep more business rates
3:00pm Monday 15th October 2012 in News
County, district and borough councils are set to come together to ensure that more money collected from business rates stays in the local economy.
West Sussex County Council has begun discussions with district and council boroughs to embark on a Business Rate Pooling scheme.
The county said it has had expressions of interest from all borough and district councils in West Sussex, except Mid Sussex District Council, to join the scheme.
Council officers are working closely with the borough and district councils to identify whether this proposal can go ahead before a deadline on November 9.
The proposal was welcomed by business leaders but said that businesses would need more details and would not support an increase in rates.
The aim of pooling would be to maximise the amount of business rates that can be retained locally.
The Department of Communities and Local Government say that local authorities will have the freedom to decide how pools should operate, what area they should cover, and how they should use the business rates income they bring in.
Currently, business rates are collected by local authorities, pooled centrally by Government and then redistributed to councils, police and fire authorities through a complex needs based formula grant.
The Government argues that the current system gives councils no financial incentive to promote growth.
They argue that pooling resources would cushion local authorities from the sudden closure of a major firm.
West Sussex County Council said that full details are needed from the Government during the Provisional Financial Settlement later in the year before final decisions can be made.
Councillor Michael Brown, cabinet member for finance and resources, said: “West Sussex County Council, together with six of our district and borough council colleagues, has expressed an interest in business rate pooling, and we are working closely with them to see if we can put forward a viable scheme to benefit local taxpayers.
“The county council feels that the Government intention to make local business growth the driver for local funding is the right one.
“In the meantime we continue to lobby the Government to ensure the changes are more favourable to our residents than the very low funding received under the old system of Government grant allocations.”
Wendy Bell, general manager at Sussex Enterprise, said: “Sussex businesses would be pleased to see their hard-earned cash ring-fenced and being reinvested back into the local economy.
“Business rate pooling locally is more favourable to the local economy rather than the funds being sent elsewhere in the country.
“However, as always, the devil is in the detail and businesses would not want to see a rise in business rates.”