A multi-million pound boost could be in store for Lewisham council services as a result of a pilot scheme to pool business rates, councillors were told last night.
Lewisham Council could receive an additional £4 million in 2018/19 under the pilot scheme, which will see local authorities able to retain, pool and distribute all money raised by business rates across London’s 32 boroughs.
How the business rates are to be distributed is yet to be confirmed, but the distribution mechanism currently being put forward is one which would produce an increase in income of around £4m for Lewisham.
Business rates are a tax on business properties which go towards funding local services.
The council voted unanimously in support of the scheme at last night’s council meeting.
Concerns that Lewisham could lose out had previously been raised by Cabinet Member for Resources Councillor Kevin Bonavia, who said at the Mayor and Cabinet meeting on October 25 that allocation of resources was “critical”.
Cabinet Member for Housing and mayoral candidate Councillor Damien Egan explained: “We’ve got some of the highest levels of need in London, but also the lowest jobs density of all local boroughs in terms of number of jobs per head, and one of the lowest business rate bases as well.”
However, the pilot is set to be protected by a “no detriment guarantee”, meaning no authority will receive less money than it would have done had this approach not been adopted.
Currently, business rates are paid into a national pot, from which local authorities receive a block grant.
The changes have been proposed to take effect from April 2018.