News Roundup: Faster Devolution, Funding Gap, Scotland’s Council Tax Freeze, Business Rate Takings, UK Bank Ratings
0Business leaders call for faster devolution
The government needs to speed up efforts to devolve finance and powers to local authorities in the North of England, according to business leaders. A survey by the Institute for Public Policy Research North found that businesses “clearly put more trust in local government and the emerging combined authorities in city-regions to work in their interests than they do in central government”.
LGA quantifies council funding gap
Councils face an estimated funding gap of £9.5bn during this Parliament, according to the Local Government Association. In a new report, the LGA claims that a 12% drop in council funding next year will be followed by an 11% cut in 2017-18, 4% in 2018-19 and 7% in 2019-20. The LGA based its estimates on figures from the Office for Budget Responsibility.
CIPFA calls for end to council tax freeze
The council tax freeze in Scotland should come to an end, The Chartered Institute for Public Finance and Accountancy has demanded. The call was made in the organisation’s submission to the Commission on Local Tax Reform. CIPFA also rejected the idea of a local income tax.
Local share of business rates drops
The value of the local share of business rates retained by local authorities in 2014- 15 was £10.761bn, down from £10.851bn the previous year, according to figures released by the Department for Communities and Local Government. Rules limiting the debit to the account each year means a credit of £66m will be added to the 2015-16 account, the department said. For 2014-15 the application of this formula limits the debit to £12.225bn which is £66m lower than the figure required to bring the total debits for the year up to the sum of credits for the year.
Intrastructure platform passes £1bn barrier
The Pensions Infrastructure Platform has announced that it has secured more than £1bn of investments from pension schemes to invest in UK infrastructure. Over £500m of commitments have been raised for the Dalmore PPP Equity PiP Fund, over £130m of commitments for the Aviva Investors PiP Solar Photovoltaics (PV) Fund, and over £370m in another co-investment alongside Dalmore Capital.
S&P affirms UK bank ratings
Ratings agency Standard & Poor’s has affirmed its ratings on eight UK banks. The agency said that the affirmations reflect its view of decreasing credit risk in the UK economy from the perspective of the domestic banking system.The outlook on all of the institutions is stable, with the exception of AIB Group (UK), which has a negative outlook in relation to its parent, and Santander UK, which has a negative outlook with respect to its build-up of additional loss-absorbing capacity (ALAC) buffer.
Heseltine says devolution “is not freedom”
Former deputy prime minister Lord Heseltine has said that proposals to give local authorities more power stop short of true devolution. Speaking at the Local Government Association, Heseltine said: “This is not freedom, this is a partnership. My own experience of local and central government is there is no structure which would enable all local authorities to be self-sufficient. So you are always going to have redistribution from the prosperous centres to the less prosperous areas. Once you have that you have to have rules.” The comments were reported by Local Government Chronicle.
