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Business tax cash could be spent in county
TENS of millions of pounds in business taxes could be kept in Worcestershire and spent on local services rather than farmed off to Whitehall.
The county is going to one of the first bidders to show an interest in pooling business rates collected from traders.
Currently, district councils collect up the taxes in their area and send the kitty to the Government. The money is then re-distributed across the country, with variations depending on national priorities.
Now the Government wants to give town halls greater control by allowing councils to be responsible for collecting and keeping at least 50 per cent of the cash. The Government would then provide a yearly top-up payment for each area.
The idea is to encourage councils to promote economic growth in their area, as the bigger the list of businesses, the more taxes collected. Worcestershire County Council has confirmed it is set to make a bid to become a pooling authority this week.
Councillor Adrian Hardman, the leader, said: “We’ve been talking to all the districts and this is something we are very interested in.
“We expect we’ll be submitting an expression of interest – the idea behind it is retaining more of the money raised from business rates locally.
“If you can encourage more growth locally, you’ll get to keep more of those increased business rates.”
About £170 million is collected across Worcestershire in business rates, meaning £85 million would automatically be kept in the county.
The cash would then be distributed among the councils to maintain and run services.
The idea has not gone down well among all politicians in the county.
Councillor Richard Boorn, Labour’s finance spokesman in Worcester, said: “It’s very prudent of the Government to say councils should make up for lost income in annual grants by encouraging economic growth.
“But I don’t believe it will give Worcester any real benefits. Any gains from it would plateau very quickly.”