Big boost for Gloucestershire business with rates pooling scheme
BUSINESS prosperity will be linked directly to the fortunes of the county's councils as part of a new funding shake-up.
Authorities across Gloucestershire has no incentive to promote business growth because the money it collects in rates is handed over to central government.
The cash is then divvied up and redistributed to councils with the most needy receiving the lion's share. However, Gloucestershire councils have signed up to a groundbreaking pooling scheme which will allow them to keep 50 per cent of the cash they collect to encourage economic growth.
Paul McLain, deputy leader of Gloucestershire County Council, said: "The changes to business rates will mean council budgets will be tied more tightly to the success of local businesses. We've been working hard at Gloucestershire County Council to promote and develop local businesses through our Grow Gloucestershire campaign – so this change is welcome.
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"The county and the six district councils have agreed to work together to keep as much money as possible in Gloucestershire – which is good news for taxpayers."
Current estimates suggest the arrangement will benefit the county to the tune of at least a million pounds a year over the next three years.
But the cash is just expected to fill budget holes caused by reductions in central government funding.
Despite this, the opportunity to have more control over each council's financial future, rather than being reliant on cash from Whitehall all the time, has been welcomed.
By pooling with its neighbours, it is thought each council will be able to reduce the risk of fluctuating business rates income as well as allowing the benefit from investment in economic growth to be shared across a wider area.
With decisions made countywide, it will also mean boroughs and districts will be able to work together to attract business rather than competing.
The Gloucestershire pool is due to be put in place by April 1, 2013. The levy rate for a Gloucestershire pool will be set at 20 per cent. Boroughs and districts are currently levied at upwards of 49 per cent.