Boroughs should be able to keep at least half of the money they raise from a levy on overnight stays, a group of London councils has urged.
The government is consulting on proposals allowing Mayors in England to bring in an overnight visitor levy, also known as a tourist tax.
It has been estimated that a 3 per cent overnight levy could raise up to £350 million per year for London. Southwark alone could bring in between £15 and £25 million.
London Councils, which represents the 32 London local authorities, has called for boroughs to be able to keep at least 50 per cent of the revenue generated in their area.
Cllr Claire Holland, the Chair of London Councils, said: “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.
“By allowing boroughs to retain 50% of the revenues raised in their area to reinvest directly in the local services and public spaces that visitors depend on, we will be able to support the growth of tourism in our city and provide confidence to businesses that this will benefit them.”
They argue that allowing boroughs to keep a larger share of the revenue means that boroughs which get the most tourists have extra money to invest back into local services and on mitigating the impact to their areas.
It would also reassure hotels, businesses and the hospitality industry that the levy would still help them because some of its proceeds would be invested directly back in improving the areas where they operate.
The group of councils suggested the remaining funds could then be used in partnership between the Mayor of London and boroughs to invest in London-wide services.
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The most likely alternative would be for two-thirds of the revenue to go to the Mayor, which is the model preferred by the Centre for Cities think tank. They argued this would make more sense because when tourists visit London they typically move between several boroughs rather than just remaining in the area where their accommodation is.
The News previously asked whether the government would support allocating most of the revenue generated by a tourist tax to boroughs but did not receive a response.
