THE government’s scheme to encourage new business is “patently unfair” and “a really good idea poorly thought through” says Thurrock Council Leader Cllr John Kent.
He said: “A year ago we were criticised for building up reserves to a sustainable level. The flexibility to take a short-term loan from our own reserves is one excellent reason why we were right to do that.”
And he added that floods elsewhere in the country had highlighted the sort of unexpected issues local authorities and to react to and provide funding for.
He said: “I do have to ask how can it be right that when a new business opens here in Thurrock we get just over a quarter of their business rates to support the economic resurgence we’re trying so hard to create here?
“Yet if an existing business goes belly-up we end up subsidising the government to the tune of 49 per cent – near enough half the cost.
“And a major local business did close – Tilbury Power Station.”
Cllr Kent said: “Yet if Tilbury Power Station had been opened instead of destroyed, the council’s coffers would have been boosted by only half that amount with three-quarters of the new rates going to central government to be spread around areas that don’t have our drive, our entrepreneurial zeal and our willingness to work for the nation’s benefit.
“Without our prudent creation of sustainable reserves we would have been scrabbling around trying to find that money instead of being prepared and ready to cope with it.”
He called on local councils to “be allowed to set the business rate levels, encouraging business to move in and boost our economy”.
He said: “We should be allowed to keep a higher proportion of new business rates, even older business rates, especially if we’re going to be held responsible for business failures too.
“The government’s plan to allow councils to keep some of any new business rates is a really good idea, unfortunately it’s been poorly thought through – forcing some authorities, like Thurrock, to pay back a higher proportion of business rates lost. It’s patently unfair.
“It’s also a missed opportunity for councils to be able to set business rates locally giving us a powerful tool to encourage growth – in town centres for example – so we can offer lower business rates to fledgling new businesses.”