DCLG pledges to support business rate appeals process
0The government is set to announce measures to “dramatically” speed up the business rate appeals process, according to local government minister Brandon Lewis.
Speaking at a local government finance conference last week, Lewis said that the DCLG would make an announcement “shortly” on measures to increase certainty of non-domestic rate income for councils.
The news comes after a report produced by the Local Government Association identified business rate appeals as one of the main causes of financial risk to councils since councils were given more control over the system last year.
Speaking at the conference, Lewis said: “We will be making some announcements shortly about the way the appeals process works.
“Bear in mind that 75 per cent on average of all appeals make no change whatsoever and yet you guys have to make allowances for what may or may not come through appeals. The delays don’t help that.
“If we can deal with the majority of that 75 per cent not being available in the first place then we can speed up the appeals process pretty quickly.”
Under the new business rate retention system, the costs of all successful valuation appeals decided after April 2013 are being shared equally between the local and central shares of total collected business rates.
Prior to this date, councils bore no liability, with central government taking all the risk.
The LGA report said: “As the old business rate pool was closed with no transitional period, the time when the appeal was expressed has no bearing on whether the cost is pooled nationally or shared between councils and the government.
“For local authorities with outstanding appeals of a major value this is an even bigger issue, as in some cases a long-standing appeal, if lost, could push a council into the safety net even though the appeal was lodged several years before the reform.”
According the LGA, some councils face unresolved appeal cases stretching back as far as 2005.
The report found that some authorities are at risk of losing as much as 45 per cent of their total business rate income through unsettled appeals.
Due to the safety net, any loss is capped at 7.5 per cent in any one year, but the LGA said that an increase in the safety net requirement would lead to a reduction in grant funding for all authorities.
The LGA calculated that English business rates as a whole are subject to appeals worth £4.2 billion, or 17.5 per cent of the business rate income in 2013/14.
The report said: “While it is true that some of these appeals will go in the councils’ favour, the uncertainty of outcome and lack of knowledge about the timing of the decision means that councils are forced to accept a significant, unpredictable financial risk, impacting on the availability of funding for services to local people.”
A DCLG spokesman told Room151 that no announcement on the issue is currently scheduled.
