Local government finance system - timescale and changes Click to get info
Since 2011, core government grant funding has been reducing each year. This, combined with unavoidable cost increases due to demographic changes, such as an ageing population, has meant that we have had to cut back on spending by almost £100 million during the period 2010 to 2017. The Spending Review published in November 2016 confirmed that funding reductions will continue beyond 2020.
Prior to 2013/14: Councils handed all the business rates they collected to the government and received a share back as part of an overall government grant.
Since 2013/14: We have retained a proportion of the business rates we collect under the Business Rates Retention Scheme, which has replaced an element of the grant. This means we are able to keep a proportion of any increase in business rates generated in the borough. However, we must directly bear a proportion of the cost of any decrease in the business rates that results, for example, from a revaluation of the rateable value of individual business premises.
In October 2015: The Chancellor announced that by the end of the Parliament (2020), local government will retain the full £26 billion of business rates it collects, including 100 per cent of all business rates’ growth and will be expected to take on additional unfunded responsibilities. The government also announced a Fair Funding review, the scope of which is to re-examine the methodology that underpins the current system of redistribution of resources between local authorities. These two significant changes to the local government finance system will have implications for the council’s finances but it is difficult to quantify at this stage as the changes are still at the developmental stage.
In December 2015: The Secretary of State for Communities and Local Government made an offer to councils to take a four-year funding settlement for the period 2016/17 to 2019/20. To accept this offer, an Efficiency Plan had to be prepared and published by 14 October 2016. Our Plan was approved by Cabinet on 12 July 2016 and Government confirmed our multi-year settlement offer on 16 November 2016. Find out more about our Efficiency Plan 2016-2020.
London Business Rates Pilot Pool 2018/19
Following the government announcement in the Chancellor’s autumn statement confirming the acceptance of a pilot 100 per cent business rates retention in London in 2018/19, we are proposing to join the pool. This will generate an estimated £240 million for all London boroughs and Greater London Authority.
How are we reacting to these changes? Click to get info
There are more than 11,000 businesses in the borough. Many of these are very small businesses which we hope will have the opportunity to expand in the future.
Our Economic Growth Strategy (EGS) sets out our ambition for growth to 2020. Its key objective is around business growth and investment. The strategy is to ‘keep, seed and grow businesses in the borough’.
One of the five themes in the EGS is our Town Centre Strategy. Each of our eight town centres faces a unique set of issues and opportunities. The strategy describes our role and sets out a clear set of actions to facilitate sustainable growth.
Supporting documents Click to get info
The following documents show how we are building a Council of 2020.
Building the Council of 2020-October 2016
This report updates on how the Council will build the Council of 2020 to ensure that we can meet the demands of the future while continuing to focus on delivering residents’ priorities.
- Building the Council of 2020-October 2016 report (item 16)
- Building the Council of 2020-October 2016 update report (item 57)
Capital Investment Strategy 2015/16 - 2019/20
This report proposes the Capital Investment Strategy for the period 2015/16 to 2019/20. The Capital Investment Strategy provides the framework for the delivery of the Capital Programme, identifying the estimated resources and the method for developing the overall Capital Programme.
2017/18 Financial Outturn Forecast Update month 7 October
This report provides an update on the revenue and capital financial forecasts for 2017/18 as at month 7, and notes any significant risks that have been identified as having the potential to affect the outturn as currently projected.
We can provide further information on our revenue or capital estimates for next year on request.