Oh, oh – no business rates devolution? Where’s the lost income coming from?

“Councils demand ‘clarity’ over funding after business rates devolution is dropped.

A steering group which spent the last 15 months consulting on how 100% business rates retention would work has been disbanded after the exclusion of local government finance legislation in this week’s Queen’s Speech.

Parliamentary time to consider the Local Government Finance Bill in the last Parliament ran out before Theresa May called this month’s General Election. However, the sector was stunned this week when the government made it clear that it would not revive the process for at least two years.

Room151 has seen a letter sent to members of the steering group from Anne Stuart, the newly-installed civil servant leading the business rates retention process.

It said: “I’m sorry this should be my first communication, but I am emailing because as you will have no doubt seen, the Queen’s Speech did not include a new Local Government Finance Bill and so it will not form part of the Parliamentary timetable for this session.”

In her letter, she thanked members of the steering group but said she would only be in touch “once we are in a position to resume working with you on the future of local government finance reform.”

However, she said that ministers remain committed to local government taking greater control of its income. “We are engaging ministers on the options for future reform without an immediate Bill…,” she said.

Ministers have reaffirmed their commitment to a thorough, evidence-based review and that work will continue with local government on that issue, Stuart said.

One steering group member told Room151: “This is more than a year’s work down the drain.

“If the government is planning to introduce any reform by executive order, it needs to make sure they take the sector with them.”

Lord Porter, chairman of the Local Government Association, said that the failure to move on with business rates devolution was “hugely concerning”.

He said: “While negotiating Brexit will be a huge challenge for the government, it cannot be a distraction from the challenges facing our public services. The day-to-day concerns of our communities go far beyond Brexit.

“Only with adequate funding and the right powers can local government help the government tackle the challenges facing our nation now and in the future.”

Jo Miller, Solace president and chief executive of Doncaster Metropolitan Borough Council, said: “I am disappointed that key legislation—absolutely fundamental to ensuring the future sustainability of local government—has now been dropped.

“Local government urgently needs clarity around our future funding—at present we simply face a cliff edge from 2020. This must urgently be resolved.”

A DCLG statement said: “The government is committed to delivering the manifesto pledge to help local authorities to control more of the money they raise and will work closely with local government to agree the best way to achieve this.”

The steering group to guide the process of business rates devolution was created in March last year after George Osborne announced that primary legislation would be introduced to allow councils to keep 100% of growth in business rates—up from the current 50%.”


East Devon bursting at the seams – official!

Owl says: all these extra residents accessing fewer and fewer services. Let’s hope most of them are young and going to Cranbrook, Exmouth and Sidmouth – because there will be no maternity services or community hospitals in Axminster, Seaton, Honiton or Ottery St Mary.

“People moving to East Devon increased the population by almost 2,500 people – more than almost anywhere else in England and Wales.

An estimated 8,316 people moved to East Devon from elsewhere in the UK between July 2015 and June 2016.

This compared to 5,848 who went the other way during this time, new figures from the Office for National Statistics show.

This meant that an extra 2,468 people moved to East Devon than left – the second highest figure anywhere out of almost 350 counties and districts around England and Wales.

As of June 2016 there were 139,908 people in East Devon, meaning that 1.8 per cent of the population was made up of people who had just moved to the county from elsewhere within Britain.

This was the highest share out of anywhere in England and Wales.

The most popular destination for people to move to East Devon from was Exeter.

… A total of 700 people were estimated to have moved from East Devon to Exeter after subtracting those that went the other way, more than anywhere else.

On the other hand, Taunton Deane was the number one destination away from the area.

A net total of 54 people moved to Taunton Deane from East Devon in 2015/16.”


Zero-hours contracts double in south-west – women most affected

Number of zero hour and agency contracted workers has more than doubled in South West since 2011 to 145,000, new research from GMB union shows.

The number of zero hour and agency contracted workers in increased from 67,000 in 2011 to 145,000 (116%) – and is particularly pronounced among women (137%).

John Philips, GMB Regional Secretary said: “These figures lift the lid on the insecure reality of the modern world of work.

“Here on our own doorstep in the South West we are witnessing an epidemic of precarious work – and it is growing at a frightening rate among our women workers.h

“Hundreds of thousands of people are going to work either not knowing what their hours are, if they’ll be able to pay the bills, or what their long term prospects are. “We need a government that is prepared to take action to tackle the scourge of agency work and ban zero hour contracts as has been done in other countries.”

Employment figures for the three months to April showed that the number of workers claiming jobseekers or Universal Tax Credit was on the rise.In Devon, there were 4,585 people out of work – a rise of 200 on last year.
In Exeter, 915 were out of work – up by 45.The figures include people employed on few part-time hours who are in receipt of Universal Tax Credit.”


What really happens in a “free market”

Five years ago, the state of Kansas (USA) was taken by its Republican Governor, Sam Brownback, into the most aggressive free market economy imaginable – the sort that has been favoured by our own Conservative government. It involved tax cuts (or even no tax at all) for the rich and big companies. Last week the policy was cancelled as a hopeless failure.

Last week, the Republican-controlled Kansas legislature took the remarkable step of overriding the governor’s veto, finally repealing his signature tax cuts. Those tax cuts, which reduced personal income tax rates and imposed no tax at all on many kinds of business income, went into effect in 2013, and were touted by Brownback and other leading supply-side figures as the best way to boost growth, bring back jobs, and make Kansas richer.”

… On the day that the tax cuts were enacted, the Kansas City Star ran a story in which the governor’s revenue secretary, Nick Jordan, promised that the tax cuts would yield big benefits for Kansas. It’s worth quoting a paragraph from that report in full since it sets out Brownback’s own terms for his tax “experiment.”

Nick Jordan, the state’s revenue secretary, said the administration ultimately imagines the creation of 22,000 more jobs over ‘normal growth’ and 35,000 more people moving into the state over the next five years. And he expects the tax changes to expand disposable income by $2 billion over the same period.”

In fact, over the period Kansas lost 49,000 jobs, ended up with a population 85,000 less than anticipated and disposable income was $20 billion short – and it had a lower growth rate than surrounding states. It got so bad that parents, angered by cuts to school funding, took the state legislature to court and got previous levels of funding reinstated.

“The idea that cutting taxes especially for the rich will boost growth and make everyone better off remains a central, if misguided, element of many economic proposals. President Trump’s tax plan, for instance, includes trillions of dollars in tax cuts that would flow overwhelmingly to millionaires and wealthy corporations.

It even includes a very similar proposal to Brownback’s policy of giving a special low tax rate for so-called “pass-through” income.

With the remarkable failure of the Brownback tax cuts in Kansas, we can hope that at least some leaders and economic policymakers will begin to adjust their theories to meet the facts, just as the Republican-controlled Kansas state legislature has done.”


Read more here:


Another privatisation obscenity

“The boss of one of the UK’s biggest energy companies has been given a 72% pay rise, just weeks after arguing against consumers having their bills capped to save them £100 a year.

Alistair Phillips-Davies, the chief executive of SSE, will be paid £2.92m in 2017 after receiving the maximum possible bonuses for leading a “robust performance” by the supplier last year.

The pay rise is even bigger than the 40% rise awarded to the chief executive of the British Gas owner, Centrica.

Phillips-Davies was paid £844,000 in base salary, largely unchanged from last year, but topped up by £25,000 in benefits, a £910,000 annual bonus – more than double the year before – and a long-term incentive payout of £644,000. He was also handed £502,000 for his pension.

The retail arm of SSE increased the profit margin it makes on householders from 6.2% to 6.9% in the financial year 2016-17.

Among the big six suppliers, SSE has the highest proportion of customers (91%) on standard variable tariffs, the default energy deals that the Conservatives have promised to cap. The government has said householders are paying a total of £1.4bn over the odds for energy as a result of such tariffs. It claims a cap would save customers up to £100 a year. …”


Should we judge our LEP by results?

Our LEP loves to take credit – often for the most tenuous reasons – but will it take criticism?

“The South West has haemorrhaged more than 50,000 manufacturing jobs in the past decade, a new study by GMB has shown.

The figures were discussed at GMB’s annual Congress in Plymouth between June 4 and 6. …

In 2006 the South West supported 294,400 permanent and temporary manufacturing jobs – almost 12% of the all jobs in the region.

By 2016, that had slumped to just 243,100 or 9% of the total.