Skip to main content

Berkshire local authorities to pilot new funding system

The Secretary of State for local government has approved a bid, submitted collectively by the 6 unitary authorities in Berkshire, to inform the development of a new funding system for local government.

Along with 9 other proposals from groups of authorities across England, the creation of a business rates pool across Berkshire in 2018/19 will help the government develop its detailed proposals to devolve 100% of business rates income to local authorities. This will replace current grant funding arrangements.

During the pilot year, it is estimated an additional £35 million of business rates income collected in Berkshire will be retained within the county, rather than being returned to Whitehall as at present.

This sum represents growth in the overall level of business rates income achieved since the current system of funding was introduced in 2013. It is designed to encourage local councils to invest in their local economies.

Respecting this, the Berkshire authorities have committed to set aside 70% of the additional funding to make improvements to transport infrastructure in the Reading – Wokingham and Slough – Heathrow corridors. The works will be taken forward by the Thames Valley Berkshire Local Enterprise Partnership (LEP), an organisation with both private and public sector representation that has helped inform the Berkshire proposal.

The remaining 30% of additional funding will be distributed to the individual local authorities in Berkshire, in proportion to their respective contribution to the overall growth.

Welcoming the Secretary of State’s announcement, Cllr Paul Bettison OBE, leader of Bracknell Forest Council, the lead authority for the pilot, said:

I am delighted that the strength of the Berkshire bid has been acknowledged. As a county area with a real mix of urban and rural areas, we are very different from any of the existing pilot areas.

The Berkshire economy is one of the strongest in the country, underpinned by businesses ranging from huge multi-nationals to rural sole traders.

I believe there will be much to learn from our local situation that will help inform the detailed design of the new funding system.

I am particularly pleased by the way the 6 Berkshire authorities have worked collaboratively to present such a compelling case to Government. The additional money that each of us will benefit from through being in a pilot is, of course, helpful. However, it was clear from the outset that our shared objective of supporting the Berkshire economy was of greatest importance to every Leader.

Detailed arrangements for all of the approved pilot areas will be agreed with the Department for Local Government and Communities over the coming months to ensure the business rates pools are established in time for the new financial year in April.