London councils call to keep half of funds raised by tourist tax

Councils across London have requested that they retain at least half of the profits from proposed tourist taxes in the capital.

London Councils, a body that represents London’s 32 boroughs and the City of London, is calling on the government to ensure that at least 50 per cent of funds raised by any overnight levy are kept by boroughs to reinvest in the local area.

The government is currently consulting on proposals that would allow mayors in England to introduce local overnight visitor levies.

London Councils hopes to retain some of the funds to ensure each borough will be able to equally sustain the resources they already invest into the tourist economy.

The funds would also help manage the impact tourism has on the local community, such as extra investment in street cleaning, licensing, local business support and community safety.

By localising funds, the body said it would assure hotels, businesses and the hospitality industry in each borough that the overnight visitor levy would directly benefit them and the local economy

London Councils also said that a minimum revenue share for local authorities would act as a pro-growth incentive, encouraging councils to support the growth of the tourist economy in their area.

As for the remaining funds, the body suggested they could be used in partnership between the Mayor of London and boroughs to support pan-London services that are essential to the tourism industry.

Cllr Claire Holland, Chair of London Councils and leader of Lambeth council, stressed that retaining a fair portion of funds is “vital” so it can be distributed into local services.

“Boroughs shoulder many of the day-to-day costs associated with tourism – from maintaining streets and transport hubs, to supporting cultural venues and managing community safety pressures – helping to keep London attractive, clean, and safe.

“We look forward to working with the government and the Mayor on the design and implementation of the levy to ensure this is a success for Londoners and our tourist industry.”

A separate body that represents 12 of London’s central boroughs, Central London Forward (CLF), has also called for a similar policy to be put in place once a tourist tax is introduced in the capital.

The organisation says that central boroughs will play a large role in generating revenue from the tourist tax, predicting that £275m will be raised there alone.

It claimed, however, that these boroughs do not have any dedicated funding to manage the pressures of London’s visitor economy.

CLF said local authorities are calling for at least 50 per cent of the revenue raised by the levy to be kept by the boroughs to help with the impact of tourism.

The government is still consulting on the design of the levy, so the mayor is waiting for a response before London proceeds with how it will roll out the new tax.

It has not been decided yet how money raised from the tourist tax will be split between local authorities and City Hall.

Read more: How much could a London tourist tax generate for the capital?