National and Devolved Politics

13.06.18

Unresolved business rates appeals divert £2.5bn away from public services

Over 130,000 business rates appeals from 2010 remain unresolved, according to the LGA.

In the past eight years, over a million businesses have challenged their business rates bills, but the latest figures show that 133,060 appeals have yet to be ruled on.

Although councils do not set business rates or rule on challenges made by businesses, the result of appeals is that they must set money aside, which diverts funding from delivering the services that local taxpayers pay for and expect.

The LGA has said that £2.5bn has been diverted away from stretched local services over the past five years to cover the risk of business rates appeals as they have to fund half of the cost of any backdated refunds.

The LGA has been calling for a reform of the business rates appeal system since 2015.

Ahead of today’s Westminster Hall Debate, the LGA called on the government to take the financial risk from business rates away from local government, arguing that government plans to allow councils to keep more of the business rates they collect makes it “even more imperative” for reform of the system to protect councils from the “growing and costly risk of appeals,” because they may become liable to pay back even more of the cost of any backdated refunds.

Council leaders are also recommending a time limit for appeals, except in exceptional circumstances. Scotland already has a six month time limit for businesses to appeal their valuation.

In addition, the LGA is urging the government to review business rates to modernise the way they affect different ratepayers in order to ensure that sectors such as online businesses make a fair contribution, and to tackle business rates avoidance, which it estimates leads to the loss of £230m each year.

Cllr. John Fuller, vice chair of the LGA’s resources board, said: “Ongoing delays in tackling business rate appeals from 2010 are heaping further financial uncertainty and pressure on our local services at a time when every penny counts to give councils the best chance of protecting services over the next few years.

“It is right that a business is able to challenge their valuation if they genuinely believe it to be incorrect.”

He called the current system, which sees billions of pounds diverted away from stretched local services, such as adult social care, “completely unfair.”

“As we move towards a system where councils will keep more of the business rates they collect locally, communities need to be protected from the shifting of resources to address the risk of business rates appeals.

“With local government in England facing an overall funding gap that will exceed £5 billion by 2020, this money is needed to fund vital services and help plug growing funding gaps,” he concluded.

Top image: jax10289

 

Enjoying PSE? Subscribe here to receive our weekly news updates or click here to receive a copy of the magazine!

Comments

There are no comments. Why not be the first?

Add your comment

 

public sector executive tv

more videos >

latest public sector news

Yorkshire council chiefs threaten pull out of asylum seeker housing project

20/08/2018Yorkshire council chiefs threaten pull out of asylum seeker housing project

Council bosses in Yorkshire are considering pulling out of an asylum seeker programme that gives homes to over 5,000 people unless the current pr... more >
Developer in £13m legal wrangle with Northumberland now plans to take council to High Court

17/08/2018Developer in £13m legal wrangle with Northumberland now plans to take council to High Court

A property developer who launched a £13m legal bid against Northumberland County Council says it has been banned from sharing vital informa... more >
High Court allows London council to fine and imprison illegal campers

17/08/2018High Court allows London council to fine and imprison illegal campers

A council has successfully obtained a High Court injunction allowing it to use greater powers – from fines and asset seizure to imprisonmen... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >
Northamptonshire report to propose splitting region into two unitaries

17/08/2018Northamptonshire report to propose splitting region into two unitaries

A report on the future of the debt-ridden Northamptonshire region due to be published this afternoon will likely recommend replacing all eight local authorities with two unitary councils. Pu... more >
Fight against Dorset merger ends as Christchurch council accepts defeat

14/08/2018Fight against Dorset merger ends as Christchurch council accepts defeat

Christchurch Borough Council has agreed not to take its legal fight to the Court of Appeal following the refusal of its Judicial Review application, with leader Cllr David Flagg apologising for t... more >

the raven's daily blog

Don’t horse around! Council finds new home for house-bound pony

13/08/2018Don’t horse around! Council finds new home for house-bound pony

A council that took four years in a legal wrangle to remove a pony from an Isle of Lewis house may have found the four-legged beast a new home. Western Isles council removed Grey Lady Too – a Connemara pony that was taken into the home by pensioner Stephanie Noble on Christmas Eve in 2011 – from its residence in 2014 because i... more >
read more blog posts from 'the raven' >

comment

A new era of opportunity for the north

13/08/2018A new era of opportunity for the north

It’s time to stop seeing transport investment as a nice-to-have: it’s a cut-through catalyst for growth in sectors across the north. ... more >
Creating a council cloud-first approach

13/08/2018Creating a council cloud-first approach

Georgina Maratheftis, programme manager for local government at techUK, makes the case for wider adoption of cloud technology by local authoritie... more >
Council mergers: little gain, less democratic

13/08/2018Council mergers: little gain, less democratic

Dr Linze Schaap, associate professor at the Tilburg Centre for Regional Law and Governance, and Dr Niels Karsten, assistant professor at the Tilb... more >
The strength of districts

13/08/2018The strength of districts

Cllr Isobel Darby, member lead for quality of life at the District Councils’ Network (DCN) and leader of Chiltern District Council, shares ... more >

interviews

Modern policing: the future is bright

06/08/2018Modern policing: the future is bright

SPONSORED INTERVIEW The public sector, and policing in particular, has often been criticised as being slow to adapt to change. But now, says L... more >
Michael King: Time for Ombudsman reform

06/08/2018Michael King: Time for Ombudsman reform

Michael King first joined the Local Government Ombudsman service back in 2004 as deputy ombudsman. At the start of 2017, he was appointed as the ... more >
Helping a city understand itself

06/08/2018Helping a city understand itself

SPONSORED INTERVIEW The urban landscape is changing. How can local authorities keep up with citizen behaviour? Stephen Leece, managing directo... more >
Data at the heart of digital transformation

03/04/2018Data at the heart of digital transformation

SPONSORED INTERVIEW Grant Caley, UK & Ireland chief technologist at NetApp, speaks to PSE’s Luana Salles about the benefits of movin... more >

public sector focus

View all News