Current business rates system ‘broken’ and ‘Victorian’ claim East Sussex councillors
East Sussex councillors have raised concerns about the future of funding services through business rates and council tax as grants from central government decrease.
Councillors voiced their concerns at a cabinet meeting on Tuesday (January 22) to discuss proposals for the 2019/20 budget, including a 2.99 per cent increase in council tax.
During the meeting, Carolyn Lambert (Lib Dem – Seaford South) spoke about the council taking part in the Government’s 75 per cent business rates pilot, raising concerns about the income expected from it would be spent.
A member of the East Sussex Fire Authority, Cllr Lambert said: “You will be aware that the Fire and Rescue Service is also part of that business rates pilot scheme.
“The Fire Authority have taken what we believe is the fiscally responsible approach, in that we have identified the potential income but are putting it into reserves.
“We have very clear ideas about how we are going to spend it but we are not anticipating that money coming in.
“I just want to point out, in the interests of prudent financial management, that it seems to me this one small piece of the budget indicates the underlying fragility of the whole and of the financial planning going on.”
Councillors also raised concerns about how sustainable such a system would be over the long term.
They included John Barnes (Con. – Rother North West), who said: “We do need to say, I think, the current system of business rates is broken and that we do need a real review of how we tax business and get a proper share of those business taxations to local government.”
Meanwhile, Tania Charman (Lab. -Old Hastings and Tressell) said: “Since when was council tax supposed to pay for adult social care? I thought that was income tax.
“I agree with Cllr Barnes, business rates [is] a Victorian system. There are lots of people operating businesses online without a shopfront and not paying business rates.
“It is not good enough is it? It doesn’t work.”
Responding to some of the concerns raised, the council’s lead member for resources David Elkin (Con. – Eastbourne Sovereign) said: “Do we think, as a council, that buildings are a way to actually fund local authorities?
“We’ve been very clear on that, no. We have always been disadvantaged by that opportunity.”