Local Government Finance Bill House of Commons, Second Reading 23 January 2017
Local Government Association Briefing Local Government Finance Bill, House of Commons, Second Reading 23 January 2017
- Local retention of 100 per cent business rates (Clause 1): This Bill provides the framework for local government keeping more of its business rates income, something which has long been called for by councils. We will continue to work alongside government and councils on how the new system can work effectively and maximise the potential it offers to our local communities and businesses.
- The devolution of responsibilities is subject to further consultation and is not included in this Bill. It is important for the new system to be implemented in a way which balances rewarding councils for growing their local economies but avoids areas less able to generate business rates income suffering as a result.
- Loss payments/appeals (Clause 2): The provision in the Bill to allow for government to pay local authorities for the cost of business rates appeals is positive. This, together with wider reforms to the business rates appeals system, is essential to protect councils from the growing and costly risk of appeals. This has to happen before local government keeps all of its business rates income as this could mean it is liable for 100 per cent of refunds. Councils have been forced to divert £2.5 billion from local services to cover the risk of paying half of appeals and refunds over the past five years.
- Reducing the business rates multiplier (Clause 6): We welcome measures to allow councils the flexibility to reduce the multiplier. The Bill should be amended to allow authorities to target this within their areas. This could include specific areas, industries or businesses categorised above or below a particular rateable value threshold.
20 January 2017