Business rate changes are not the answer to the city's financial crisis

Warren Morgan, leader of the city council
Warren Morgan, leader of the city council

The city council faces a funding crisis, now and in the years ahead.

The city council faces a funding crisis, now and in the years ahead. Growing financial pressures on the NHS and low-income working families seeing the support they receive in tax credits cut, means that there has been a huge rise in demand for social care locally.

The council has a duty to care for children at risk of harm, vulnerable adults, and the growing population of older people. That pressure, and the failure of the previous Green administration to get a grip on council finances, means the council is forecast to spend over £7 million more by next April than budgeted for in March.

This is the context in which we are dealing with calls for money to support heritage projects like the Madeira Terraces and Saltdean Lido, as well as the need to keep improving our universal services like road repairs and recycling collection.

The news that councils will be able to keep all of their business rates may be welcome for those authorities who stand to gain, but it isn't an answer to the financial crisis Brighton and Hove faces.

As a city we don't have many large employers, big industrial and manufacturing units, or out of town shopping centres that generate large scale business rates. We rely on thousands of small- and medium-size enterprises in the retail, restaurant, digital, and service sectors.

The changes are unlikely to come into effect until 2020, by which time the council will have had all of its government revenue grant (which provides a third of our funding) cut entirely.

In addition the government is handing councils more and more responsibilities, like council tax rebates, pensioner bus passes, and public health, and then cutting the funds to run them.

If we do not make far-reaching reductions and changes to services, to the buildings we run and the number of staff we employ, the combination of rising social care costs and cuts to funding will mean that by 2019 we look likely to be spending over £100 million more than we bring in from grants, charges, business rates, and council tax.

Keeping all of the city’s business rates will  replace only half of that, meaning we still have to cut our costs by £50 million.

We will be taking firm action within a month to balance the books. We will look first at our own running costs before bringing forward reductions and changes to front-line services.

We will focus on growing our business rates and council tax income from new businesses and new homes. If the business rate changes are meant to replace grant funding then we will challenge the government to implement those changes earlier and in full, devolving funding and power to local councils and local communities.

We will focus the money we have on delivering the services you rely on and caring for those who need it most. Your council needs fairer funding to do that and build a better city for all.

Warren Morgan is the leader of Brighton and Hove City Council.