LGA win on business rates

Councils will be able to use funds raised  through business rates to respond to local economic needs after the government passed new legislation.

It follows consistent lobbying by the LGA to get greater flexibility for councils to respond to local circumstances.

The Business Rate Supplements Act, which received Royal Assent this month, gives county councils, unitaries and the Greater London Authority a new discretionary power to raise a supplement on the business rate and retain the revenue to support local economic projects  if necessary. Councils will have the flexibility to decide the duration of the supplement and whether it applies to empty property rate payers.

The LGA also lobbied hard against an amendment which would force all local  authorities to hold a compulsory ballot of local businesses over any rates increase. The amendment, which was supported by a strong business lobby, was defeated in the House of Lords.

The Act states that properties with a rateable value of £50,000 or less will be exempt from any supplement in England, meaning most smaller businesses will not be expected to pay. The changes will help councils to boost local economies through the recession.

Local government minister Rosie  Winterton said: “Through this new Act, councils and businesses working closer together will be able to give the green light to economic development projects, boosting job opportunities and improving local economic development in their area.

“Business rate supplements will not be applied in every community – but this new discretionary power does mean councils will be better placed than ever to m ake the most of the upturn and ensure their local economies thrive.”