LGA responds to Select Committee report on business rates system

“With councils facing extra cost pressures of at least £2.5 billion a year, the next Government needs to commit to moving forward with vital business rates reforms and the LGA looks forward to working with the Government to make this happen.”


Photograph of London

Responding to the Treasury Select Committee, which called on the Government to examine alternatives to the ‘broken’ business rates system, Cllr Richard Watts, Chair of the Local Government Association’s Resources Board, said:

“Business rates are an extremely important source of income for local government.

“It is good that the Committee recognises that any options to reform the current system needs greater clarity and detailed review. Any reform should maintain total income for local government and keep the link between councils and current and potential new businesses in their areas. 

“Councils want to see a business rates system which is responsive to local needs, fair to all and promotes inclusive growth through incentives. Local government has a strong interest in a reformed business rates system which commands confidence and where there is local discretion over reliefs.

“While we also support an increase in business rates retention in April 2021 to 75 per cent, the next Government should introduce 100 per cent business rates retention at the earliest possible opportunity, so that the remaining business rates income can be used to plug funding gaps and to ensure that no authority loses out as part of the Fair Funding Review.

“With councils facing extra cost pressures of at least £2.5 billion a year, the next Government needs to commit to moving forward with vital business rates reforms and the LGA looks forward to working with the Government to make this happen.”