WIREDGOV

Cllr Claire Kober, Resources Portfolio Holder at the Local Government Association, responded to the Local Growth and Jobs Bill announced in the Queen's Speech, paving the way towards 100 per cent business rates retention

"The move towards local government as a whole keeping 100 per cent of its business rates income by 2020 is something we have been campaigning to achieve for the last decade. We are working alongside government to ensure the voice of local government is central to ensuring the new system works effectively and maximises the potential it offers to our local communities and businesses.

"The Government wants the increase in business rates income to be used by councils to pay for a range of new responsibilities that are still to be decided and to replace current government grant funding to run specific services, such as public health. This will coincide with core government funding to councils being phased out completely.

"It is therefore absolutely crucial that the amount of extra business rates income kept by councils matches the cost now and in the future of any new responsibilities or transferred grants they agree to take on. The Government also needs to consider allowing councils to use some of the extra business rates income to plug existing funding gaps or ease some of long-term financial challenges they face.

"Almost 900,000 businesses have challenged their business rates bill since 2010. Councils have been forced to divert at least £1.75 billion from stretched local services in the past three years to cover the risk of these appeals and backdated refunds - of which they have to cover half the cost of at present.

"The sheer scale of appeals suggests that too many businesses are not happy with what they are being charged or are simply taking advantage of the fact that it is too easy to appeal, meaning they think they have nothing to lose. By 2020 local government could be liable for 100 per cent of refunds. As every penny will count in giving councils the best chance of protecting services over the next few years, we also need urgent reform of the appeals system so councils can use the money set aside to cover the risk of these appeals to invest in vital local services."