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Responding to the Chancellor's announcements on the full return of business rates to local authorities Rob Whiteman, CEO of CIPFA, said:
'On the face of it this is really positive news. CIPFA welcomes the Chancellor’s announcement that councils will be able to retain all £26bn of business rates. However, as to how this will work in practice, the devil will be in the detail.
'The Institute has long championed devolving business rates to allow greater certainty for future financial planning, as well as increasing self-determination to drive business growth locally.
'Today’s move recognises some of the inherent risks in the transfer of funding from grant to business rates, so it is a step in the right direction towards financial independence and greater local accountability.
'It should also encourage greater collaboration between local government and local businesses to encourage economic growth, which will in turn improve local prosperity and the wellbeing of residents.
'The Government must now make clear how the decentralising process will work, including the procedure for worst-case scenarios and importantly how high-need authorities, who currently have a net reliance on central funding, will be supported.
'They must also make clear exactly which services such as police, public health and special education needs local government will be expected to fund from business rates.'
Responding to the Chancellor's announcement of the creation of British Wealth Funds, CIPFA's CEO Rob Whiteman commented:
'While it is disappointing that, as in the Right to Buy debate, again there wasn't more consultation with the sector before these new proposals were announced, we completely agree with the Chancellor that the local government pension scheme (LGPS) has inefficiencies which need to be addressed.
'However we need to remember that unlike all other large public sector pension schemes such as teachers, armed forces, health and civil service (whose future liabilities will be subsidised from current taxation), local government is alone in holding any pension fund assets to pay its pensioners from. At the last count these assets amounted to some £200 billion of investments paying out in cash terms some £7 billion annually towards the costs of current and future pensions.
'So we need to be extremely cautious that the local government pension fund investment returns are not compromised by thoughts of compulsory investment in local or regional infrastructure from which the returns may be much less certain. All investments with pensioners' contributions must be on investment-grade proposals and never on vanity projects that cannot attract investment from the market.
'It would be a shame to kill this goose that keeps on laying for the sake a one-off golden egg.'
For media enquiries contact the CIPFA press office on 020 7543 5600 or email E: firstname.lastname@example.org.
The Chartered Institute of Public Finance and Accountancy (CIPFA) is one of the leading professional accountancy bodies in the UK and the only one which specialises in the public services. It is responsible for the education and training of professional accountants and for their regulation through the setting and monitoring of professional standards.
Uniquely among the professional accountancy bodies in the UK, CIPFA has responsibility for setting accounting standards for a significant part of the economy, namely local government. CIPFA’s members work (often at the most senior level) in the public service bodies, in the national audit agencies and major accountancy firms. They are respected throughout for their high technical and ethical standards and professional integrity. CIPFA also provides a range of high quality advisory, information and training and consultancy services to public service organisations. As such, CIPFA is the leading independent commentator on managing and accounting for public money.