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Bromsgrove council to join finance pool
4:40pm Friday 14th September 2012 in Local
BROMSGROVE District Council has confirmed it plans to join a new business rates pool, joining forces will other local authorities.
Changes to the financing of many public services is set to see authorities rely more on economic activity locally, to pay for services.
This is because authorities are set to keep more of the business rates - the tax paid by local businesses.
Under the current system all these rates go to the Government and councils receive an amount back, but councils are set to soon keep a capped amount of local business rates, with the rest going to the Government.
Councils nationwide have been considering collaborating with neighbours to pool this money, sharing the benefits and mitigating the risks of changes to local economic activity, while creating a new source of finance for investment.
The district council is looking to pool its money and wants to enter this kind of arrangement with councils within the Greater Birmingham and Solihull Local Enterprise Partnership, that also decide to take part.
Bromsgrove District Council is set to enter an arrangement with these councils following an urgent decision on a recommendation from the authority’s cabinet, required after the Government brought forward the deadline for councils’ decisions.
The council is able to delay its final decision until the full implications of this year’s local Government finance settlement are made clear - expected to be around January 2013.
This allows the council time to amend its approach should any additional information or changes in proposed national policy come to light.
But if the council does go-ahead, it would join the rates pool from April 1 next year.
Council leader Roger Hollingworth said: “With the coming changes, pooling resources between neighbouring areas is clearly the sensible thing to do.
“We have long argued for reform to the way business rates are redistributed, and we look forward to seeing if and how the Government’s final proposals will benefit Bromsgrove.
“You only need to look at the recent recession to see how the economy can fluctuate and by coming together we share the benefits and the risks of local economic growth.
“In this case pooling our resources could also create a significant new source of finance for investment in jobs and infrastructure.”