London to retain more business rates income

The Mayor of London Sadiq Khan has agreed a deal that will enable London to retain more of the money it raises through business rates.

Earlier this year, the government published a devolution deal for London that proposed a scheme that would give London boroughs greater control of business rates generated in the capital. This finance could the be invested in vital infrastructure and public services.

The Mayor and the mayors of all 32 London boroughs have agreed landmark proposals that will see the capital pilot 100 per cent business rates retention from next April, if approved by government.

This would see London able to retain any additional business rate income that is generated next year in the capital - excluding revaluation related growth. This growth is forecast to be in the region of £240 million in 2018/19.

Khan said: “This agreement highlights how London boroughs of different political colours, in both inner and outer London can join forces to act in the best interests of the whole city. We will now have more control to spend more money on the things that matter most to Londoners, including social care, affordable housing, infrastructure investment and support for businesses.

"This is an important step in devolving more control over the use of the capital's tax revenues to London government. But it is only a first step as the government will still retain control of business rates tax policy, revaluations and the business rates appeals system. What we really need is for government to agree to full devolution of business rates to London, combined with genuine protection for business, so that we, like the devolved administrations of Scotland, Wales and Northern Ireland, can act in the interests of Londoners and their businesses."