Shropshire Star

Shropshire councils fail in bid to keep 100 per cent of all business rates

Shropshire's two major councils have been rejected in their joint bid to take part in a pilot scheme that would allow it to keep all the business rates they collect.

Published

Shropshire Council, Telford & Wrekin Council and Herefordshire Council had jointly applied to take part in a national scheme that would allow councils to keep all cash they collect in rates next year.

The Government has said it wants to change the way it funds councils and to move all councils to this system at some point in the future and for this to replace government grants.

Currently, the Government gets 49 per cent of the new business rates that councils collect.

Meanwhile, Telford & Wrekin Council's finance boss says it is deeply disappointing that no more cash has been found for local authority-run services.

The council's budget remains under pressure and chiefs say they will need to find around another £30 million of savings from its budget by 2021.

Under the latest settlement the borough will get no further national support from Government for adult social care services and children’s safeguarding, the council’s two biggest expenditures.

Telford & Wrekin finance chief Councillor Lee Carter said: “We’re deeply disappointed by the settlement, but sadly not surprised. Our medium term budget plans were that this most prolonged period of Government cuts in our history would continue and so it will on a massive scale.

“The settlement confirms a 23 per cent cut in our remaining Revenue Support Grant next year and a further cut of over 30 per cent the year after this. These swingeing reductions are on top of the £110m we will have saved since 2010 from our annual budget by the end of this year. We must continue to work with a range of community organisations and groups to find new ways to deliver services that help limit the impact of these Government-imposed cuts as far as possible.

“It’s particularly disappointing that despite the wealth of evidence nationally of the pressures facing key council services to the most vulnerable in our community, particularly adult social care and children’s safeguarding - pressures that are very keenly felt here too, no extra funding has been made available.”

“The Secretary of State has then applied the ultimate kick in the teeth by turning down our bid to be part of a business rates retention pilot scheme which would have helped reduced some pressure on cuts to services."

Labour-run Telford & Wrekin launched a bid in partnership with Shropshire and Herefordshire councils and Shropshire Fire and Rescue Service.

The authority had also already earmarked additional extra funding this year for social services due to high numbers of children in care and a growing older population that is living longer and requires more support. Children’s safeguarding and early help has been boosted with £5m extra.

Despite the challenges the council says it is on track to make almost £14m of savings in the current financial year. Over the next two years it expects to have to find a further £15m to £20m to save from its budget. However, these extra costs of £4m have been largely offset by other savings that the council has made and by dipping into its contingency fund.

Councillor Carter Carter previously warned that there are still tough decisions to be made in the near future.