Localis response to Budget 2025
Localis chief executive, Jonathan Werran, said:
Mansion Tax
“The imposition of a high value ‘Mansion Tax’ surcharge on properties worth more than £2 million, although it promises to bring in some £400m annually from 2028, raises a serious moral point about the justification for taxing only one subset of properties at current property values, leaving the rest stuck forever in 1991.
“Perhaps, this move might be more significant as the crack that finally opens up a reset and full revaluation of council tax, and to making this principal source of local government funding a relevant revenue raising exercise again – particularly in light of the forthcoming changes to council budgets in the Fair Funding Review.”
Business rates
“With ‘Price in Place’ back on the domestic policy agenda, steps to keep the hard-pressed foundational economy of our small shops, cafes and pubs, all of which are crucial to the foundational economy and local social infrastructure are to be welcomed, as are plans to reform licensing for the sake of preserving the nighttime economy.
“While these changes must be balanced against the impact of minimum wage increases, moves to keep business rates permanently lower for smaller retail and hospitality premises and shifting the onus of taxation on warehouses and online importers are welcome moves to keep the high street alive and kicking, while continuing to provide a stable source of revenue for local services.”
SEND provision
“Many in local government will be hailing central government’s commitment to fully fund SEND provision from 2028/29. As a measure this will further reduce the risk of more councils issuing section 114 notices, help strengthen local financial resilience and say a final good riddance in 2027/28 to the accountancy sleight of hand that is ‘statutory override’.
“However, the story does not end here and there will be the legacy of historic deficits and debt management, totalling perhaps £14bn across the sector to manage as a fiscal risk for councils when setting balanced budgets, let alone the question of how central government departments will absorb the costs in day-to-day spending.”
Tourism Tax
“News that we can finally move towards a tourism tax can only be seen as helpful for champions of fiscal devolution, who have felt they have been banging their heads in vain against the brick walls of Horseguards Avenue.
“Put in the proper perspective, a tourism tax is not going to touch the sides of the social care funding gap. However, the success of the campaign in establishing the principle, which will see locally raised tourism revenue held for improving local economies, and not evaporate into thin air owing to Whitehall opposition to the reality that some areas will attract more revenue than others, is clearly a good thing. Just to cite one example, in York and North Yorkshire a tourism Levy would bring in an estimated £52 million, which in turn is around three times the size of the area’s Mayoral Investment Fund.”