City business row

GLASGOW city council has revealed that it is constantly being short-changed in the way business rate cash is redistributed.

Each local authority is charged with bringing in rates for the various businesses operating within its boundary.

This income is then passed on to the Scottish government who redistribute the money among Scottish councils.

But it has emerged that Glasgow’s authority is constantly being given millions less than it raises, while nearby councils are reaping the benefit.

Figures divulged by the Scottish parliament show that last year the city received more than £50 million less than it brought in — gaining only 80 per cent of its revenue.

Meanwhile, last year’s figures show that neighbouring East Dunbartonshire council collected 20,174,000, but gained £44,129,000 in payments from the Scottish government.

Also, East Renfrewshire council, south of Glasgow, contributed £18,875,000 and received £37,568,000.

Both amount to around double that which they have collected.

Councillor Gordon Matheson, leader of Glasgow city council, hit out at the inequality of redistribution: “Scotland’s cities are its economic powerhouses and Glasgow generates a substantial amount of welath for other regions, towns and villages across the country.

“Every year, millions in business rates revenue is drawn out of Glasgow, where council tax payers have provided the infrastructure to attract business to our city and pump-primed the investment from which the whole nation benefits.

“Of course, ministers need to consider the genuine needs of authorities that are home to relatively few businesses — but if they don’t protect Glasgow’s ability to carry on driving the national economy, it will be for nothing”.

However, the claims have been strongly denied by the Scottish government who insist that the city is allowed to keep all of its revenue.

A spokeswoman said: “From April this year, Glasgow city council — like all other local authorities in Scotland — has been able to keep all its non-domestic rate income.

“We are incentivising local authorities to increase their non-domestic rate income through the planned Business Rates Incentivisation Scheme and Tax Incremental Financing initiative”.

But Glasgow city council has hit back at this statement.

A spokesman said: “On Monday night, the Scottish government tried to claim that we do keep all of our non-domestic rates.

“In reality, every local authority’s allocation in the 2011-12 settlement was set at a level which matched its collection levels.

“However, this had zero impact on our funding level as they just went ahead and took a ‘compensatory reduction’ from our revenue support grant instead.

Councillor Matheson said: “Giving someone their own money with one hand while you dip their pocket with the other isn’t much of a deal.

“Ministers have tried to pull a fast one and I don’t think Glaswegians will be at all impressed to hear they thought this city was daft enough to buy it.

“Does the Government not think we would have noticed an extra £70 million in the bank?

“I can tell them; it’s not there. It’s not there in Glasgow, it’s not there in Edinburgh and it’s not there in Aberdeen.

“I want that money, raised in this city, to benefit this city. It is the difference between being at the mercy of cuts and investing in schools, jobs, infrastructure and the best support for the most vulnerable Glaswegians”.