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Councils' extra levy power ‘won’t help local economies’

By Vivienne Russell | 15 March 2013

Small firms are unenthusiastic about councils’ new power to levy supplementary business rates for local projects, believing it will not make a difference to local economies, a survey has indicated.

The Forum of Private Business canvassed members’ opinions on how the power, which is included in the Local Government Finance Act, could benefit them. Councils are allowed to levy the supplementary business rate to fund local projects, agreeing the spending in consultation with local businesses.

But the forum’s survey of 100 small firms showed that over half (56%) felt the changes would have minimal or no impact on them, while 6% said they would end up paying for something that did not benefit them at all. Just over a fifth (22%) agreed that the business rate change would have a positive impact on the local economy.

Three-quarters (76%) of the businesses polled said they were ‘sceptical’ or ‘very sceptical’ that their local council would be able to work well with them to improve the local economy. A similar proportion said they would rather not have supplementary business rates in their area, even if the costs were small.

Commenting on the findings, Alex Jackman, the forum’s head of policy, said: ‘The overriding message here is that small businesses have little confidence in their local councils to spend their money wisely, and with added benefit to their business.

‘Some respondents in our research said their councils already focused more on town centres, others that the primary focus was on larger businesses. The lack of long-term and other business-focused spending on things such as road projects or planning support were other reasons why businesses were critical of their councils.’

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