Councils in Lincolnshire and across England are set for a £26 billion windfall as part of “the biggest transfer of power to local government in living memory”.
Chancellor of the Exchequer George Osborne pledged to let councils keep all the business rates they raise by 2020, with the amount set to be received by Lincolnshire County Council to pay for services estimated to be just over £102 million.
But in a speech at the Conservative Party Conference in Manchester on Monday, Mr Osborne announced a “devolution revolution” by phasing in new powers over the next five years that will see councils able to set their own business rates.
Mr Osborne said: “The way this country is run is broken (as) people feel remote from the decisions that affect them, initiative is suffocated, our cities held back and there’s no incentive to promote local enterprise.
“Right now, we have the merry-go-round of clawing back local taxes into the treasury and handing them out again in the form of a (revenue support) grant.
“In my view, proud cities and counties should not be forced to come to government with a begging bowl.”
Today I am embarking on the biggest transfer of power to our local government in living memory.Chancellor of the Exchequer George Osborne
As part of the reforms, the Uniform Business Rate by which councils decide how much businesses should pay to them in locally-set taxes would be scrapped and each area would be allowed to cut business rates to boost economic growth.
South Holland District Council leader Gary Porter, speaking in his role as chairman of the Local Government Association, said: “Councils have been hugely restricted in their ability to introduce local discounts, with government setting the charge and keeping half of business rates income.
“With greater local control, councils will have flexibility to reduce business rates for the types of shops and businesses that residents want in their high streets and neighbourhoods.”
Boston Borough Council’s portfolio holder for Finance, Coun Aaron Spencer said, “We are pleased that the Chancellor is looking to devolve new powers from Whitehall and allowing local authorities to retain 100 per cent of business rates.
“It will be important over the coming months to understand the detail of this as it remains inevitable that the monies made available to local government will continue to reduce at an alarming rate.
“We will however do all we can to ensure any opportunities to encourage growth within the borough are taken.”
Lincolnshire County Council leader Martin Hill said: “We have long argued for more devolved funding to local authorities, especially the localisation of business rates.
“With this news, we will be able to retain 100 per cent of business rates and have the flexibility to make Lincolnshire more competitive and encourage growth.”