Business Rates blow could cost Hull £45.5 million per year

Hull City Council could lose up to £45.5 million in funding for local services each year, following Coalition Government plans announced today by Deputy Prime Minister Nick Clegg.

Meanwhile, Westminster home to the some of the World's biggest businesses, shopping streets and tourist attractions would get to keep the £1 billion it currently contributes to the national Business Rates pool, which is redistributed to other councils around the country.

Responding to the announcement, Hull North MP Diana Johnson said: "If Hull City Council loses out on the funding it gets from the national Business Rates pool, it could mean another Coalition funding cut of £45.5 million a year on top of cuts made already.

"We've already seen the Tory-led Government target Hull and other deprived area for the deepest cuts in council funding 9% this year alone. This move on Business Rates, launched by Nick Clegg, could be another kick in the teeth for Hull people and local services, as we see money taken away from Hull and given to wealthier areas such as Westminster.

"Unless Ministers spell out clearly how they will ensure we don't lose out in Hull, we could be in line for yet another devastating blow to local services and to our local economy."

Caroline Flint, Labour's Shadow Secretary of State for Communities and Local Government, said: "Nick Clegg must explain how he intends to localise Business Rates without pulling the rug from beneath the finances of councils in Britain's most deprived areas.

"If Business Rates were completely localised Westminster Council would gain over a billion and the City of London would gain half a billion pounds. But many other areas would lose hundreds of millions in vital funding.

"Already those councils that serve Britain's most disadvantaged communities have suffered the worst of the Tory-led Government's cuts. We have seen already how little promises mean to Nick Clegg. Until he sets out in detail exactly how he will ensure that councils won't lose out under the localisation of Business Rates, we can't take his word seriously."

Ends