Friday, 17 February 2017

"Local authorities are going to become increasingly dependent on business rates and yet by so doing they will potentially drive up the costs of healthcare in their localities."

The changes in how local authorities are able to finance themselves has sent alarm bells ringing pretty much everywhere:
Futures Forum: County Council calls for "an urgent national review of local government funding" as "thousands of small businesses are set to be hammered by a rise in business rates"

There have been plenty of warnings:
Business rate changes: the impact on councils cannot be overestimated - Public Sector Executive
Business rate changes in budget leaves councils facing further cuts | UK news | The Guardian

With this comment from well before the last Budget:

Councils are only set to benefit from additional new business rates revenue, since the existent ones will be offset by a reduction in main grant funding from Whitehall. This will make councils more dependent on a less predictable form of income.

Devolving business rates to councils will deepen local debt – credit agency - Public Sector Executive

But it's not just local authorities which have a very uncertain future.

As well as High Street businesses facing hikes in business rates
Business rates hike will put up prices in shops, experts warn - Telegraph
Government to pocket extra £1bn from small business rates hike while giving US giant Amazon a tax cut - the Sun

... NHS hospitals are to face increased costs:
NHS hospitals, GP surgeries and health centres 'facing huge hike in business rates' | City & Business | Finance | Express.co.uk
Government urged to stop property tax hikes for 1,249 NHS hospitals | Society | The Guardian

This comment to this last story is from the East Devon Watch blog:

“People are saying local authorities shouldn’t have to develop local funding solutions to the meeting the rising costs of adult social care. This article reveals another challenging irony in the context of the devolution of financial responsibility. Local authorities are going to become increasingly dependent on business rates and yet by so doing they will potentially, as an unintended consequence, drive up the costs of healthcare in their localities.

In a world where we have been able to do so many technically brilliant things we must be capable of finding a better way forward than the chaos, which is beginning to embed itself at the heart of the way we pay for our services. There is a strong argument to suggest this policy, when allied to ongoing cuts to central Government funding for local authorities involves taking money out of the NHS to fill the gap left by Government cuts.

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