Local Government Finance

Philip Hollobone Excerpts

Monday 18th July 2011 Commons Chamber

[Mr Pickles]

The answer is that roughly £2.5 billion will be transferred from the south to the north of England, and I do not anticipate a significant change to that amount. I was not just picking out Doncaster; places such as Liverpool and Sheffield also do well out of this system—because we are looking at relative growth. The poorer areas will continue to benefit from the levy. Under the present system, any growth or enterprise is immediately siphoned away from the centre. The new system will give places such as Coventry, Liverpool and Doncaster a real incentive by allowing them to keep the extra growth that they generate.

[Mr Philip Hollobone (Kettering) (Con)]

I declare an interest as a serving member of Kettering borough council. In two-tier authority areas, will it be the borough council that sets the repatriated business rate, and will it be required to give a percentage to the upper tier authority?

[Mr Pickles]

The rating authority—the district authority —will continue to collect, but the county council and district councils will receive a sum of money equivalent to the existing formula grant and will continue to share in the growth. That means that counties and districts will be able to work in partnership with business, and determine between them a proper relationship. There will be no problem with their ability to determine where the money falls.