Proposed business rate incentives for councils will only deliver a tiny increase in funding for South East authorities says SEEC. Extra income could be as low as £8.6 million shared between 74 councils. 

SEEC raised these concerns in a response to Government consultation on proposals for business rates retention in October 2011. SEEC has asked for a pause in the proposals to allow a more fundamental review of local government finance. While welcoming the principle of financial incentives for councils, members felt the proposals as currently set out were too complex and would not offer significant benefit to local authorities. For example:

• Independent analysis for SEEC showed the proposals would deliver only 0.33% real terms increase in formula grant across the whole of the South East . This would deliver £8.6million between all 74 local authorities in the South East.
• SEEC believes local authorities should be able to retain a greater proportion of the business rate growth they generate - current proposals retain too much for central government.
• An alternative distribution formula is needed to ensure fairer allocation of incentives. Extending the current flawed, unaccountable system to business rate incentives will simply perpetuate existing unfairnesses.

Read SEEC's full response on business rate retention.