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Bristol to benefit from Osborne’s rates plan
Bristol is in for a windfall after Chancellor George Osborne announced cities would be able to keep the business rates they raise.
Osborne is set to make major changes to the rates system, meaning councils will no longer have to send the money they collect to Whitehall to be distributed by Government.
As one of the most prosperous cities outside of London and a net contributor to the exchequer, Bristol could gain between £40-£50 million a year, it has been estimated.
The money could be spent on local infrastructure projects under the new plans which also allow councils to set their own rates.
Osborne said: “Attract a business, and you attract more money. Regenerate a High Street, and you’ll reap the benefits. Grow your area, and you’ll grow your revenue too.”
The plans are due to be implemented in 2020. The £40-£50 million a year estimate comes from calculations based on the council’s Medium Term Financial Strategy.
However, the figure assumes the Government introduces the policy immediately and scraps the current way of funding councils through support grants. Full details of how the new rates system would work are yet to be published.
Which cities stand to gain or lose from retention of #businessrates? http://t.co/uIW9TTUdMN pic.twitter.com/PNPwiqd4u7
— Centre for Cities (@CentreforCities) October 5, 2015
Although the new plans allow councils to set their own rates, Matthew Hancock, a cabinet office minister, said that cities with elected mayors could only raise the rates by up to two per cent and “with the consent of the local business community”.
The announcement follows the City Deal in 2013 which allowed eight cities including Bristol to keep their growth in business rates over a 25-year period.
The announcement also comes as the West of England Local Enterprise Partnership is revealed to be the best place in the country for small start-up businesses.
The area covering Bristol, South Gloucestershire, North Somerset and Bath, was found to have the highest rate of start-ups per person of working age.
Bristol is one of the wealthiest of the “core cities” in the UK. In 2012, Bristol’s GVA, the total value of goods and services produced in the area, was £11.7 billion, above Sheffield, on £11.2 billion, and below Tyneside, on £17.2 billion.
Greater Manchester has a current GVA of £56.3 billion. Bristol has the highest GVA of any core city outside of London.
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