• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • LGA calls for government support as regulators face staffing issues

    May 19, 2022

  • WMCA signs £4bn investment agreement with L&G

    May 18, 2022

  • Bill will give UK Infrastructure Bank power to lend directly to councils

    May 18, 2022

  • £400bn pension group collaborates on climate transition initiative

    May 17, 2022

  • CIPFA rejects proposal for vote on publication of fraud hub report

    May 17, 2022

  • John Turnbull elected president of the SLT

    May 12, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

Spring Budget: Compensation on the way to quell business rates anger

0
  • by Colin Marrs
  • in 151 News · Resources
  • — 9 Mar, 2017

Photo: HM Treasury, Flickr, CC

Councils will be compensated in full by the Treasury for a £435m package intended to head-off uproar over this year’s business rates revaluation.

Chancellor Philip Hammond had been under intense pressure from business organisations over the effect of the changes on struggling businesses.

In his budget statement, this week, the chancellor announced new measures designed to soften the blow. Speaking in the House of Commons, he said that the revaluation “has undoubtedly raised some hard cases, especially for those businesses coming out of small business relief”.

In response to such cases, he announced that no business losing small business rate relief will see their bill increase next year by more than £50 a month, with a cap on subsequent increases.

Pubs with a rateable value of less than £100,000 — around 90% of the total — will also receive a £1,000 discount on business rates in 2017.

Thirdly, local authorities will be given a £300m fund to deliver discretionary relief to target individual cases of hardship caused by the rises.

The fund will be allocated to local authorities by formula, with communities secretary Sajid Javid set to announce details at an unspecified point in the future.

Hammond said that he was required by law to ensure that the revaluation process was revenue neutral for the government.

But a report released alongside the budget by the Office for Budget Responsibility said: “When the package is fully specified, we will include it in the forecast and judge whether we do indeed expect it to be fiscally neutral.”

Even if the measures do not change the total take from business rates, some authorities could “be left out of pocket because of delays to billing caused by the lack of certainty about relief over recent weeks,” according to Claire Kober, chair of the Local Government Association’s resources board.

She said that it was important that government reimburses councils for any loss of income or extra costs incurred as a result.

Other public sector finance experts said more detail was needed before a judgement could be made on the effect of the revaluation measures on planned 100% business rate retention.

Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy, said: “Additional financial support to help head off the furore over business rates revaluations was expected and we will just wait to see how that will work in practice, but also how the fundamental issues raised by the revaluation affect the longer term plans for the 100% retention of business rates by local government from 2020 onwards.”

Kober said: “Councils do not set business rates but any likely rise in appeals as a result of this latest revaluation will pose a risk to the funding of already-stretched local services.

“This means a transparent and fair system of valuation and appeals is vital to provide greater certainty of cost and income to businesses, and allow councils to release the money currently put aside to cover the risk of appeals to invest in vital local services.”

The Federation of Small Businesses, which campaigned hard against the revaluation, gave a cautious welcome to the extra cash announced in the budget.

National chairman Mike Cherry said: “The £300m discretionary relief fund for local authorities to target those businesses most in need is a very welcome short-term measure — but there is concern that the fund may not be big enough.

“Many small firms are already receiving their bills and so it is vital that government and local councils communicate immediately with their local business population to explain how this fund will work.”

The  formula to distribute the £300m needs to take into account those areas hardest hit in London and in regions across England, he added.

The chancellor also promised to reform the revaluation process, “making it smoother and more frequent, to avoid the dramatic increases that the present system can deliver”.

Cherry called for a cross-party commission “to create a simple, fair tax system for a modern economy”.

Get the Room151 Newsletter

Share

You may also like...

  • Mike Thatcher: constructing a new role for local government 27th Jan, 2022
  • Andrew Hardingham: Holidays await but the ‘in’ box is brimming over 17th Aug, 2021
  • Will new public procurement rules offer the best commercial results? 19th Jan, 2021
  • McCloud consultation ends with “greater security” for LGPS members 4th Mar, 2021

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 19 hours ago

    Treasury to restrict PWLB loans to councils at risk of non-repayment: The Treasury has released new guidance that restricts local authorities’ access to Public Works Loan Board (PWLB) advances if there is a “more than negligible risk” of a council’s… dlvr.it/SQhLTV pic.twitter.com/vBsS7xMJdb

    Room151 19 hours ago

    Mixed reaction to proposed government intervention powers: There has been a mixed reaction to the government’s legislative plans to strengthen its intervention powers over local authority finances. The Levelling Up and Regeneration Bill has proposed… dlvr.it/SQhLMB pic.twitter.com/50foWxpPGs

    Room151 19 hours ago

    Post-Brexit struggles for national and local government regulators. @LGAcomms @NAOorguk Click the link below to read 🔻🔻 room151.co.uk/brief/lga-call… #Brexit #government pic.twitter.com/s3c8ySGy5G

    Room151 1 day ago

    CIPFA: a question of transparency: Roman Haluszczak’s campaign for publication of the independent report into the collapse of CIPFA’s London Counter Fraud Hub has been rejected again by the institute. He is now calling for[...] dlvr.it/SQgC5V pic.twitter.com/08fWsHFF4g

    Room151 2 days ago

    Back to the future for the PWLB: The Public Works Loan Board is tightening its lending criteria to ensure that loans will be repaid by local government borrowers. But, asks Peter Findlay, shouldn’t they have been doing[...] dlvr.it/SQcmmm pic.twitter.com/bVv4fe0Xlv

    Room151 2 days ago

    Great piece from Peter Findlay on the PWLB’s tightening of its lending criteria. He raises some pointed questions for the Treasury and explains why the ‘casino council’ characterisation was simplistic and inaccurate. #PWLB #localgov room151.co.uk/treasury/back-…

    Room151 2 days ago

    The Queen's speech highlighted the need for accelerating UK infrastructure investment into levelling up projects and cutting emissions. @UKInfraBank #QueensSpeech #ClimateAction #emissions Click the link below to read 🔻🔻 room151.co.uk/brief/bill-wil… pic.twitter.com/hFmF2veVIa

    Room151 2 days ago

    Huge funding heading to the @WestMids_CA from @landg. @andy4wm #LevellingUp #netzero #regeneration Click the link below to read 🔻🔻 room151.co.uk/brief/wmca-sig… pic.twitter.com/ajhZhia6mx

    Room151 2 days ago

    LGPS governance, Cagney and Lacey style: What regulatory response can be expected following the publication of the Good Governance project’s Phase 3 report and the closure of the Single Code of Practice consultation? Susan Black offers[...] dlvr.it/SQbfXf pic.twitter.com/xwqHOEu2AP

    Room151 3 days ago

    More evidence of the importance of emerging markets in the journey to net-zero. @BordertoCoast @BrunelPP @northernlgps @EAPensionFund @WYPF_LGPS Click the link below to read 🔻🔻 #LGPS #NetZero #NetZeroCarbon #EmergingMarkets room151.co.uk/brief/400bn-pe… pic.twitter.com/qCm0EGxzLn

    Room151 1 week ago

    ‘Urgent consultation’ issued in response to continuing audit delays: CIPFA and the Local Authority Scotland Accounts Advisory Committee (LASAAC) have announced another “urgent consultation” to consider proposals to address the latest issue that has led… dlvr.it/SQJ0kV pic.twitter.com/s6vw0bnGXO

    Room151 1 week ago

    Bags of capacity – now to housing delivery: HRAs have been freed up and councils are starting to invest, but some remain cautious, writes Steve Partridge. He suggests that a minimum of £10bn of additional borrowing could be[...] dlvr.it/SQDvxk pic.twitter.com/yZmoWzHv6U

    Room151 1 week ago

    Bags of capacity – now to housing delivery room151.co.uk/treasury/bags-…

  • Categories

    • 151 News
    • Agent 151
    • Audit
    • Blogs
    • Business rates
    • Chris Buss
    • Cllr John Clancy
    • Council tax
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Education
    • Forum
    • Funding
    • Governance
    • Graham Liddell
    • Housing
    • Ian O'Donnell
    • Infrastructure
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • Levelling up
    • LGPS
    • Mark Finnegan
    • Net Zero
    • Private markets
    • Recent Posts
    • Regulation
    • Resources
    • Responsible investing
    • Richard Harbord
    • Risk management
    • Social care
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Transport
    • Treasury
    • Uncategorized
    • William Bourne
  • Archives

    • 2022
    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Spring Budget: Social care funding pledge meets with scepticism
  • Next story News round-up: Infrastructure model trial, highest council tax rises, Capita treasury services sale

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares