But devolved authorities will need to adopt a more commercial mindset to support local taxes in raising revenues, says KPMG.
Commenting on the devolution deals for local regions and the announcement that local government spending will be generated by local taxes from 2020 in today’s Budget, Joanna Killian, head of local government at KPMG in the UK, said:
“The biggest news in today’s budget were the devolution deals and Mayoral models in non-metropolitan areas plus confirmation that the GLA, Greater Manchester and the Liverpool City Region could take full control of business rates by 2017, three years ahead of the rest of local government.
“The devolution deals, announced for the non-metropolitan regions of East Anglia, Greater Lincolnshire and West of England represent a huge opportunity to achieve stronger economic growth, address productivity gaps and drive public sector reform in health, care and criminal justice.
“But funding remains a concern for local councils facing a tough three years as they seek to operate with significant cuts to grants and rising demand for services from the most vulnerable. While it is good news that the Government is supporting SMEs in increasing the threshold for small business rate relief, this means that there will be less resource available for Councils in the short term and the amount available when business rates are devolved in 2020 will be significantly lower. Early clarification of the new framework is much needed.”
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Margot Cowhig, KPMG Corporate Communications
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KPMG Press office
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