by Catrin Whitehead
There’s some good news for cash-strapped Liverpool City Council.
The council says that since 2011 about two-thirds of its grant from central government, around £420 million, has been cut – affecting everything from social care to leisure.
Increases in Council Tax – up nearly 6% this year – efficiency savings, and raids on reserves, don’t go nearly far enough to plug the gap. But Liverpool is now one of 10 areas taking part in a pilot scheme which allows councils to keep ALL of their business rates.
The previous system of business rates – which is the fee that owners of commercial businesses must pay on their premises to the local council – meant the money would first be sent back to London, before being re-distributed around the country, according to each council’s need.
Now, however, piloted councils will keep every penny from these rates.
So what exactly does this mean? A report from The Institute for Fiscal Studies estimated that this new initiative could provide £870 million nationally in extra funding over the next year. This equates to £5 extra per person in Liverpool than was budgeted.
The pilots have been rolled out this month and other areas included in the scheme are also urban, Labour areas.