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17th March 2016

Solace statement on the Budget 2016

On 16th March 2016 the Chancellor of the Exchequer delivered the 2016 Budget. This is a statement from Graeme McDonald, Director of the Society of Local Authority Chief Executives and Senior Managers (SOLACE), in response:

SOLACE has previously argued that the financial settlement for local government needs a radical overhaul and that what is proposed by Government currently is likely to lead to further instability and will not ensure public services are sustainable for the long term. Yesterday’s Budget further reinforces that view.

The Chancellor’s announcement yesterday that 600,000 small businesses will be taken out of business rates and 250,000 will pay less comes just as the main grant from Government is to be phased out and business rates are set to take over as a primary source of local government revenue.

Based on Treasury projections, this will mean an estimated £1.7bn is taken out of this proposed key source of local government funding, and there is no detail as yet as to how the sector will be compensated. Likewise, reducing councils’ incentive to support small local businesses at a time when local growth is otherwise being championed through devolution seems counterintuitive.