Dan Peters 25 March 2015

Give commercial councils tax break, argues think tank

Give commercial councils tax break, argues think tank image

New council-owned trading companies should be given a three-year corporation tax holiday funded by government departmental underspends, according to a new report from think tank Localis.

Localis has estimated it would cost no more than £72m, £86.4m and £103.4m in successive years up to 2018.

The think-tank found that entrepreneurial activities could rise from making up 6% of council budgets – equivalent to about £10bn in 2012/13 – to 18% – equivalent to at least £27bn – by 2020.

Almost six in 10 councils own a trading company while 57% operate a joint venture with the private sector. Localis argued that by 2020 owning a trading company will be the default position for councils.

However, survey respondents warned that in-house skillsets were the ‘biggest barrier’ to councils being entrepreneurial.

The report read: ‘Rising commercialism in councils has to be seen as a positive development rather than a reluctant reaction to austerity. Never in living memory has there been such a case for an entrepreneurial approach.’

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Want to reap the benefits of Commercial Cards but coming up against some challenges? James Sykes, Head of Commercial Cards, Lloyds Bank and David Legg, Head of Corporate Card Products, Lloyds Bank, discuss how the payments industry is helping organisations unlock their true value.
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