Business rates in Gloucestershire being pooled into one pot
POOLING business rates into one large pot will allow all councils across Gloucestershire to benefit from economic growth, it has been suggested.
Cheltenham Borough Council has agreed in principle to be part of a pool involving all of the other authorities in the county.
Currently councils across the UK collect rates from businesses before handing the cash over to central government.
The money is then redistributed to councils using a complex formula.
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It means that, under current legislation, authorities have no incentive to promote business growth in their area because they are not rewarded for it.
But under new government plans, councils will be able to keep 50 per cent of the business rate growth they collect.
By pooling with neighbouring authorities, Cheltenham will be able to reduce the risk of fluctuating business rate income as well as allowing the benefit from investment in economic growth to be felt across a wider area.
And with decisions made county-wide, it will also mean boroughs and districts will be able to work together to attract business rather than competing against each other.
John Rawson, deputy leader of Cheltenham Borough Council and cabinet member for finance, believes entering into a pooling scheme is sensible.
He said: "There would be less risk because individual authorities will be less vulnerable to fluctuations in their business rates income and there would be the opportunity to share the benefits of economic growth across the county which is actually quite a sensible thing to do.
"The idea of being in competition with other parts of the county is fairly silly.
"There is also an advantage in terms of maximising the amount of business rates that we would be able to keep within the county.
"This is a work in progress and there are still risks in the process, the biggest being what happens if there is a reduction in business rates as we would not be protected as a county in the same way that we would be if we were an authority on its own."
Cheltenham Borough Council will decide whether or not to ratify the plan this month, after members of the cabinet agreed to the plan at the end of September. The biggest issue for council bosses moving forward will be how the county-wide pool will be split up fairly.