Hospitals (Parking Charges and Business Rates) Bill, House of Commons, Second Reading, 11 September 2020

Business rates account for around a quarter of all council spending power. Money raised is used to pay for vital local services, such as caring for older and disabled people, protecting children, fixing potholes and collecting bins.


Key messages

  • The Hospitals (Parking Charges and Business Rates) Bill seeks to prohibit charging for car parking at NHS Hospitals for patients and visitors and ensure NHS Hospitals are exempt from business rates. Whilst we recognise that people visiting hospital for regular treatment often face significant additional expenditure due to parking charges, the LGA does not support the Bill as business rates form a vital source of revenue for councils. The Bill’s provisions, if enacted, could significantly impact on local government funding.
  • Business rates account for around a quarter of all council spending power. Money raised is used to pay for vital local services, such as caring for older and disabled people, protecting children, fixing potholes and collecting bins.
  • In December 2019, the High Court ruled that NHS Trusts and Foundation Trusts are not eligible for business rates relief. In our view this was a welcome decision as it meant that councils would not have to pay NHS Trusts and Foundation Trusts the compensation claimed, plus interest backdated six years, nor see them eligible for 80 per cent relief. The decision is now being appealed.
  • Councils are facing significant extra costs from the extra demands created by COVID-19, and they are also facing a significant drop in income. Whilst the Government stepped in and provided some support, significant challenges remain. These will have a lasting impact for communities, and it is vital that any review of the business rates system bears in mind the need to provide long term funding certainty and sustainability to local government.
  • At the Budget, the Chancellor announced a comprehensive review of business rates. The terms of reference for this were published in March 2020 and a call for evidence was published on 21 July 2020 and the LGA will be feeding into the review. We have urged the Government to ensure it works closely with the LGA and councils to ensure that the sustainability of funding for local services is one of its central considerations of the review.
  • Councils want to see a reformed business rates system which commands confidence. The system does need to be modernised and improved by, for example, ensuring that all sectors make a fair contribution. This is of added importance in the current context where the COVID-19 crisis means that collecting business rates is exceptionally challenging. The risk of appeals on councils need to be reduced and tougher powers are also needed for them to tackle business rates avoidance.

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