Cuts to business rates and turning all schools into academies, which could cost the city council £250million by 2020, is an attempt at “devolution by stealth” according to the leader of the council.
Yesterday’s announcement in George Osborne’s budget that small business are to get more business rate relief could see Brighton and Hove City Council lose out on as much as £100million a year by 2020, when its Government funding is swapped for keeping business rates.
And if all schools are turned into academies, the city council could also lose another £150million in education funding – not all of which is spent on individual schools, but on services such as special needs support across the city.
The full details of the crippling cuts are yet to be finalised – but council leader Warren Morgan says it is part of making local councils go bust and replacing them with mayors.
He said: “Its about making local council financially unviable, and creating vast multi-county regions run by a remote elected mayor. It is the opposite of localism and contrary to what they said devolution was all about.
“We are yet to see the detail of how this will impact on Brighton and Hove, but looking at the Chancellor’s announcements it would appear that the city council will lose another £150 million in funding for schools by 2020, as all schools are forced to become academies.
“The Chancellor said that all councils should become self-funding by 2020, but he has potentially stripped us of almost £100 million in business rates, half of which we get now, the rest we stood to get in 2020.
“This is because he has said that more small businesses will get full business rate relief from next April. Almost 99% of our local businesses employ less than 200 people, so most potentially will stand to gain from this. Good news for them, but financially disastrous for the local services those business rates fund.
“As well as that, the move to academies would affect the business rates income we receive, as academies get 80% business rate relief whereas council schools pay 100%. This could put £1.6m income at risk in the future.
“The Chancellor is also insisting on multi-county devolution areas with elected mayors, at a time when county bids in Hampshire and Oxfordshire are falling apart, and the Department of Communities and Local Government is saying that ‘bespoke’ local solutions are a far better option. I’d side with the DCLG, as regional mayors will be too remote and combined authorities are much more responsive to local need.”
The further cuts were also slammed by the city’s branch secretary of the GMB union Mark Turner, who said: “The Goverment gives with one hand and takes away with the other.
“In four years’ time, Brighton and Hove City Council services are going to go – local authorities are going to be administrative centres just managing statutory services, and most of the services the public shouts and screams about are not statutory.
“This is a further death knell to local authorities, unless the public start pushing back and really that’s what they need to start doing.”