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Local Government Finance Act could bring £10bn economic boost
A system of tariffs and top-ups will ensure councils start the new regime on a stable and equitable footing, while a levy on disproportionate business rate gains will even out discrepancies between councils.
The Act also brings in arrangements for localised council tax support schemes, requiring the new arrangements to be ready by January 31 2013 in time for the 2013/14 financial year. In October, the DCLG released a £100m voluntary grant to ensure local means tests do not penalise the poorest households too severely. Applications for funding from this transitional grant will be invited after the January deadline.
“These new laws could deliver over a £10bn boost to the wider economy, and generate more business rate income to councils to help pay off the deficit and support frontline service that protect vulnerable communities,” Pickles said.
Tax Increment Financing is also ushered in by the Act, which permits local authorities to borrow for capital schemes against projected business rate growth. The Act also brings in a number of technical changes, including powers to reduce certain council tax discounts and exemptions on empty dwellings.
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