Leader of Kingston Council welcomes business rate reforms following 18-month campaign for change

The Leader of the Council, Councillor Kevin Davis, has welcomed an announcement by Chancellor George Osborne that local councils will be able to keep the proceeds from business rates raised locally.

Kingston has been the most vociferous of all London boroughs in campaigning for reforms to the business rates system, with Councillor Davis first meeting with senior Government Ministers to discuss the issue at the beginning of the year.

Councillor Davis said: 

“A fairer business rates system that does more to incentivise local councils to support existing businesses and attract new ones into their areas is urgently needed. This is something I have been campaigning hard on ever since I became Leader of Kingston Council 18 months ago. I have been in regular contact with senior Ministers since the beginning of the year and I am delighted that the Government has listened and decided to act.

“Of course we still need to see the detail behind the headlines, but this is a significant change that could offer councils like Kingston the chance of a future free from central government funding.  That is all we ask - the chance to be in control of our own destinies.

“Kingston Council is embracing an ambitious growth agenda. We know that the vast majority of residents support that approach, but they want to see growth that is right for our borough and that delivers benefits for local people. By retaining our business rates, we can ensure that the benefits of more businesses coming into the borough will be felt closer to home. This can only be good news for Kingston and local councils across the country.

“I have spent the last two months speaking with hundreds of local residents at a series of ‘Kingston Conversation’ events across our borough. It is clear from the conversations I’ve had that local people expect their council to be creative in the way we manage our declining budgets and protect the services that people need most. Local councils should be spending just as much time looking at new ways of increasing their revenues as they are planning how to reduce expenditure. Convincing Government Ministers that we should be able to keep more of our business rates is a good example of that work in action.”

Sources of funding the Council

Kingston only receives about 20 per cent of its funding from Government and 15 per cent from business rates, leaving the remaining 65 per cent to come from Council tax payers:
  • this compares to a London average of 35 per cent from Government, 28 per cent from business rates and 37 per cent from Council Tax
  • this means that compared to other London boroughs, Kingston residents are expected to pay for a greater share of the services they receive. It goes a long way to explaining why Kingston has one of the highest council tax rates in London
  • Kingston Council currently retains a 30 per cent share of its business rates, with the remainder being distributed to central government (50 per cent) and the GLA (20 per cent)

In 2015/16, Kingston Council will retain £20 million in business rates. This makes up 15% of the Council’s income

Kingston Council has a budget gap of £8.6 million in 2015/16. This is the fifth successive year of major reductions in funding and significant levels of savings need to be found in future years.