Local Government Finance Bill

Local Government Finance Bill, Committee Stage, Thursday 9 February 2017

Key messages

• We support Amendment 46 to Clause 6, tabled by Gareth Thomas MP, which would require the Secretary of State to bring forward a provision to enable billing authorities and major precepting authorities in England to increase business rate multipliers on empty properties under certain circumstances. We support this amendment as it would provide additional flexibilities for councils and incentivise occupation of empty properties.
• We support Amendments 48 and 49 to Schedule 2, tabled by Gareth Thomas MP, which would allow councils the flexibility to reduce the business rate multiplier and target this within specific areas. This could be above or below a particular rateable value threshold or for particular geographic areas or industries. 
• We support New Clause 11, tabled by Gareth Thomas MP, which seeks to enable billing authorities to have powers to treat mandatory reliefs as discretionary relief, if they have reasonable grounds to suspect that liability was being reduced through business rates avoidance. 

Local Government Finance Bill, Committee Stage, Tuesday 7 February 2017

Key messages

• We support Amendment 46 to Clause 6, tabled by Gareth Thomas MP, which would require the Secretary of State to bring forward a provision to enable billing authorities and major precepting authorities in England to increase business rate multipliers on empty properties under certain circumstances. We support this amendment as it would provide additional flexibilities for councils and incentivise occupation of empty properties.
• We support Amendment 47 to Schedule 1, tabled by Gareth Thomas MP, which seeks to remove the proposed power of the Secretary of State to force an authority to join a pool of local authorities. Authorities should be given the option of voluntarily pooling risk and rewards as long as it does not reduce income going to authorities outside of the pool area.
• We support Amendments 48 and 49 to Schedule 2, tabled by Gareth Thomas MP, which would allow councils the flexibility to reduce the business rate multiplier and target this within specific areas. This could be above or below a particular rateable value threshold or for particular geographic areas or industries.
• We support New Clause 11, tabled by Gareth Thomas MP, which seeks to enable billing authorities to have powers to treat mandatory reliefs as discretionary relief, if they have reasonable grounds to suspect that liability was being reduced through business rates avoidance.
• We support Amendment 50 to Clause 4, tabled by Gareth Thomas MP, which seeks to remove Chapter 4ZA of the 1992 Local Government Finance Act, inserted by Schedule 5 to the 2011 Localism Act, which provides for council tax referendums. The LGA does not support council tax referendums as democratically-elected local authorities should be able to set council tax at appropriate levels without the cost and bureaucracy of a referendum process.

Local Government Finance Bill, House of Commons, Second Reading 23 January 2017

Key messages

• 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.