Teresa Pearce responds to NAO report on 100 per cent business rate retention scheme

Teresa Pearce, Shadow Secretary of State for Communities and Local
Government, responding to the National Audit Office report on the 100 per cent
business rate retention scheme, said:

“Today’s report confirms what we have long suspected: the
Government is playing dangerous games with local government finances, and in
turn, is putting our vital public services in jeopardy.

“The NAO have stated that implementing 100 per cent business
rates retention before the Government’s Fair Funding Review has been published
will result in an untested and potentially unfair system being imposed on
already struggling councils. In the context of seven years of brutal and
relentless cuts to local government, that is a risk that councils cannot
afford. That is why Labour has continually called for 100 per cent
business rate retention to be delayed until after the Fair Funding Review is
complete.

“The report also finds that the research has not been
done into whether business rate retention is genuinely driving economic growth,
and the resources do not exist to do so sufficiently. As it stands, this scheme
is ideologically-driven but lacks any solid evidence base. 

“Local government is facing a £5.8billion funding gap by 2020.
There is a national crisis in social care with 1.2million frail elderly people
and one in five vulnerable disabled people being left lonely and isolated. Libraries,
youth centres and Sure Start centres have closed. Child protection services are
creaking, and homelessness is rising. Public services provided by local
councils are the lifeblood of our communities and the Government must think
more carefully before implementing these potentially catastrophic changes.”