The Government must address a range of issues, including problems with appeals and withdrawing Revenue Support Grant (RSG), before bringing in 100 per cent business rates retention for councils, the Communities and Local Government Committee has said in its report.
The Committee found the impact of appeals by ratepayers is dwarfing increases in business rates revenue and affecting growth incentives, with local authorities setting aside substantial sums of money, often for long periods of time, in case an appeal is successful.
It calls on the Government to specify how it will protect councils which rely on redistributed business rates and are worried that they will lose out under the new system.
CTG had responded to the Committee’s Call for Evidence by highlighting the value of mandatory business rate relief for charities (the protection of which has since been confirmed formally) and the danger of unintended consequences of local control of business rates relief, with additional pressure on discretionary relief, a likely outcome.
The report highlights the adverse local cost implications of mandatory charitable relief going to academies and possibly NHS trusts, following changes in Central Government policy. CTG will continue to monitor developments closely and will seek to ensure that this does not lead to a dilution of charity reliefs.