Firms back local control of business rates

2 Mar 15

More than two-thirds of businesses agree that councils should be able to set business rates locally, according to a poll.

The survey of 500 UK firms for the Local Government Association found 68% agree rates should be set locally following discussions with local businesses.

Just 7% of businesses surveyed by ComRes disagreed and LGA chair David Sparks said it was clear firms up and down the country had lost faith in the system.

Under the current regime, central government sets a national multiplier to calculate business rates, which is applied to local property values. Whitehall also controls the application of reliefs within the system and keeps half of income and growth, which it redistributes to town halls in grants.

Sparks said this restricted the ability of councils to support the types of shops and businesses residents want in their high streets or to help new firms open and keep small businesses alive.

‘The current system of business rates is not fit for the 21st century and is preventing councils from supporting small businesses and boosting high streets as much as they would like,’ he stated.

‘Councils could do much more to support small businesses if we were given the freedom and finance to set rates and discounts locally. We could also invest in infrastructure and vital local services if all of the money a business paid was retained by local government.’

Local government secretary Eric Pickles has previously said he would like local authorities to retain up to 90% of rates, but Sparks said both councils and firms agree that it was essential the government’sforthcoming review transform them into a truly local tax.

‘The government has committed to a long overdue review of business rates and councils are calling on them to publish its Terms of Reference as soon as possible,’ he added. ‘The LGA looks forward to playing a full part in the review.’

Support for full local control was highest among manufacturing companies (73%) and those in the service industry (72%).

It was particularly strong among businesses in the Southeast (83%) and the Northeast and Yorkshire & Humber (76%).

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