Shops and businesses moving into a transformed Sheffield city centre will help pay for council services for years to come.
Sheffield Council says business rates paid by companies moving into the new Retail Quarter will help the council balance the books in the face of more Government cuts.
Coun Ben Curran, Sheffield Council’s cabinet member for finance and resources, said: “We will be funding social care off the back of business rates.”
Continued cuts in Government funding mean the council must find new ways of making ends meet and officials say investment in the retail quarter is part of the plans.
Coun Curran said the scheme will be key to boosting the council’s coffers in future as they become increasingly reliant on money generated from business rates.
“It will pay itself back to us and improve our revenue budget over time,” he said.
“In the medium-term, it will put us on a more secure footing.
“We will be funding social care off the back of business rates.”
Coun Curran added: “The other side of things is we want to make Sheffield a better place for come to do leisure and shopping activities.
“If you have an improved city centre, that will bring even more people in all year round.
“The reasons behind the project are part financial, part for the good of the city.”
The council says it has already made £352 million of cutbacks since 2010 – and is anticipating a further £116m to come in the next five years.
The £468m of cuts is close to the anticipated £480m project costs of the Sheffield Retail Quarter scheme to revamp the city centre.
The council is currently acting as the developer and investor in the scheme – with the first phase of the project involving the demolition of the Grosvenor House Hotel and building of new offices for HSBC due to cost up to £90m.
For the wider project to redevelop the city centre with major new shops and office space, the council committed to a £97m budget to buy land and draw up detailed proposals back in July.
It is hoped the completed scheme will bring thousands of jobs to Sheffield city centre.
The council’s medium term financial strategy has highlighted the increased importance of business rates collection to the authority’s finances.
It said the Revenue Support Grant from Government has been cut by almost £100m since 2013/14 and is due to be reduced further from the current £90m to just £36m by 2019/20.
The report added: “With the introduction of the national business rate retention scheme in April 2013, a significant proportion of the council’s income now comes from the council’s 49 per cent share of business rates collected locally.
“This council’s share of business rates is currently set to increase to 100 per cent from 2020 with the Revenue Support Grant set to decline even further.
“The financial position of the council will now be substantially dependent on its ability to raise and collect the expected level of business rates.
“With the Government’s ongoing commitment to spending cuts in unprotected public sector budgets as part of the deficit reduction programme, in the future the council’s financial position will be significantly determined by the level of business rate income and council tax income, each of which may be subject to considerable volatility.
“This injects a higher level of risk and uncertainty into financial planning.”