WIREDGOV

Local Government Association Chairman Lord Porter, responded to the Housing, Communities and Local Government Select Committee report into business rates

“Local government in England is facing an overall funding gap that will exceed £5 billion by 2020. We are pleased that the Committee is backing our call for councils to be able to use extra business rates income to plug this growing gap.

“The money local government has to maintain vital services is running out fast. Councils will see their core funding from central government further cut in half over the next two years and almost phased out completely by the end of the decade. Delays to when business rate reforms will be implemented mean councils are facing a financial cliff-edge in two years that the Government has to address.

“Introducing a fairer funding system and allowing local government to keep every penny of business rates collected to plug funding gaps is now the only way the Government can ensure local authorities are able to protect the services communities rely on into the next decade and beyond.

“Councils are having to divert money from local services to cover the risk of backdated business rates appeals. We agree with the Committee that it is important that the Government provides assurance to local government that the risk from appeals will be significantly reduced before further business rates retention is implemented and the backlog of appeals is eliminated.

“We look forward to continuing our work with the Government on further business rates retention and the Fair Funding Review.”

Report:  Retained business rates should be extra revenue source for councils