LGA responds to further DCLG consultation on business rates retention

LGA press release 15 February 2017

Responding to the further consultation on business rates retention launched by DCLG today, Cllr Claire Kober, Chair of the Local Government Association's Resources Board, said:

"This consultation includes clear signs the Government is listening to the views of councils in determining how the new business rates system should work. It is important there will continue to be opportunity for further joint working between councils and government before any fundamental decisions are made. This remains vital to ensure we maximise the potential the further localisation of business rates offers to our local communities and businesses.

"We are delighted that the Government has listened to and acted upon the concerns of local government by ruling out transferring responsibility for administering Attendance Allowance. The LGA was united in opposition to the option of councils having to use additional business rates income to pay for Attendance Allowance. It would have accounted for the majority of the extra business rates income kept by local government, leaving little left to fund the transfer of other services, and created a significant cost pressure for councils. 

"With local government facing an overall £5.8 billion funding gap by 2020, we remain clear that councils must first and foremost be able to use extra business rates income to plug this growing gap before any extra responsibilities are considered. Local authorities should then be able to invest the rest into services which support local economies and drive local growth, such as closing skills gaps and improving public transport.

"Provisions for appeals to be managed centrally is also a significant step in the right direction towards protecting councils from the growing and costly risk of appeals. This was a key priority for the LGA from the outset.

"Consideration of partial resets and the recommendation to remove Local Enterprise Partnership approval of infrastructure supplements are positive. There needs to be a clear and transparent process for all authorities to acquire such power. It should also remain up to local areas to decide to join a business rate pool arrangement and councils also want government to bring forward measures to tackle avoidance and hand councils the power to set business rates and reliefs.

"We will continue to work closely with DCLG and councils on shaping the new business rates system. Fundamentally, it has to be underpinned by a proper needs assessment which rewards areas for growing their local economies but protects those less able to grow their business rates base."

15 February 2017


Greg Burns
0207 664 3333