Queen's Speech: LGA responds to business rates announcements

“The newly announced retail discounts will provide support for high street businesses and pubs, but it is crucial that in line with normal government practice, councils are fully funded for this loss of extremely important income."


A shopper on a high street

Responding to today’s announcements in the Queen’s Speech on business rates discounts and reforms, Cllr Richard Watts, Chair of the Local Government Association’s Resources Board, said:

“The newly announced retail discounts will provide support for high street businesses and pubs, but it is crucial that in line with normal government practice, councils are fully funded for this loss of extremely important income.

“We are concerned that reliefs lower the business rates tax base and this is one of the issues local government will discuss with the Government as we move to further business rates retention.

“More than 90 per cent of existing reliefs are already mandatory. Councils need greater flexibility to target reliefs, for example, those relating to charities and empty property, to respond better to existing conditions and tackle business rates avoidance more effectively.

“Central government should work closely with councils as part of its business rates review. As the Government recognises, business rates have an important role in council funding as retained business rates now contribute around a quarter of local authority core spending power, with their importance increasing as part of the move to further business rates retention.

“This review should also consider the full suite of finance options available to local areas to fund local services as well as infrastructure to support growth, including consideration of new sources of funding for local government, such as a tourism levy, an e-commerce levy and new local enterprise zones.

“We are pleased that the next business rates revaluation will be brought forward and that future revaluations will be more frequent, but this must be introduced alongside measures to significantly reduce the backlog of appeals. For example, we would like to see reforms to ensure that appeals can be received no later than six months after a new ratings list comes into force, as applies in Scotland.”