The commission found that, in 2012/13 councils collected £21.9bn in business rates out of £22.4bn due, a median collection rate of 98%. The amount of uncollected business rates in-year amount was £513m. Amounts collected by individual councils varied from £1.3m to £1.6bn.
Cumulative losses are estimated at £1.2bn with total arrears owed to individual councils ranging from just over £137,000 owed to a unitary council to £87.5m owed to a metropolitan authority.
‘This is money that, if collected in-year, would be available to the public purse sooner to support the delivery of services,’ the commission said.
Audit Commission chair Jeremy Newman added that, with councils now able to retain up to half of the business rates they collect, it was important to provide them with data.
‘Knowing the value of business rates, and the cost of their collection under the old arrangements, will help councils maximise the benefits of the new scheme,’ he said.
‘The briefing can help councils as they look to improve strategies to support existing business to do well and attract new businesses to the area, improve the timeliness of collection and reduce collection costs and arrears.’
Median collection rates varied between council types. Shire districts had the highest median collection rate with 98.2% and metropolitan districts the lowest with 96.7%. Over half (55%) of district councils collected more than 98% of 2012/13 business rates in-year, but this figures dropped to 17% for mets.
Sharon Taylor, chair of the Local Government Association’s finance panel, said the data showed councils had an ‘excellent track record’ when it came to collecting local taxes.
‘If central government's collection rates matched those of councils the public purse would be more than £20bn better off,’ she said.
At CIPFA, Alison Scott, assistant local government director, said: ‘Councils across the country work incredibly hard in often difficult circumstances to collect all of the tax owed to them to help fund public services.
‘In fact CIPFA figures show that councils collect around 98% of the business rates payable to them and this high collection rate has hardly changed over the past five years.’
