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

Government under pressure as NAO finds universal credit not delivering value for money

15/06/2018Government under pressure as NAO finds universal credit not delivering value for money

Universal Credit (UC) has not delivered value for money and-- it is uncertain that it ever will, according to research published by the National ... more >
Bolton council buys shopping centre as part of £1bn town centre masterplan

15/06/2018Bolton council buys shopping centre as part of £1bn town centre masterplan

Bolton Council has purchased Crompton Place shopping centre in a £14.8m deal. The move has been funded by the council’s £100m ... more >
On a cliff edge: The Barnett Formula

14/06/2018On a cliff edge: The Barnett Formula

David Phillips, associate director at the Institute for Fiscal Studies, gives his analysis of the Barnett Formula post-Brexit and asks: how will ... 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 >
Somerset should form three unitary authorities, MP suggests

12/06/2018Somerset should form three unitary authorities, MP suggests

Bath and North East Somerset Council leader, Tim Warren, has revealed that he would be open to a council merger, backing MP James Heappey’s recent suggestion of forming three new councils. ... more >
Northamptonshire failure inspires new county-district deal with joint CEO

30/05/2018Northamptonshire failure inspires new county-district deal with joint CEO

Proposals are being considered for joint working between Cherwell District Council and Oxfordshire County Council following the former’s decision to end its partnership with South Northampton... more >

the raven's daily blog

The work of the vanguards can help overcome the challenges of integrated care

29/05/2018The work of the vanguards can help overcome the challenges of integrated care

Following the announcement of the second wave of integrated care systems (ICSs), NHS Providers, the NHS Confederation, NHS Clinical Commissioners (NHSCC) and the LGA reflect on how lessons learnt by members from across the four organisations – that have designed and worked together as part of the vanguards – will support the j... more >
read more blog posts from 'the raven' >

comment

On a cliff edge: The Barnett Formula

14/06/2018On a cliff edge: The Barnett Formula

David Phillips, associate director at the Institute for Fiscal Studies, gives his analysis of the Barnett Formula post-Brexit and asks: how will ... more >
The digital journey so far

08/05/2018The digital journey so far

Michael Sage, digital services group manager at Chelmsford City Council, outlines the authority’s journey towards becoming digitally indepe... more >
Equipping the cyber security gatekeepers

08/05/2018Equipping the cyber security gatekeepers

With the General Data Protection Regulation (GDPR) just around the corner, cyber security is on the lips of the whole public sector – but P... more >
The hydrogen revolution

08/05/2018The hydrogen revolution

PSE’s Josh Mines takes a look at an innovative scheme in Sheffield that will see some of the first hydrogen-fuelled vans begin work in the ... more >

interviews

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 >
GDPR: The public sector scarecrow

03/04/2018GDPR: The public sector scarecrow

SPONSORED INTERVIEW PSE’s Josh Mines chats to Martin de Martini, CIO of Y Soft, about what the General Data Protection Regulation (GDPR)... more >
Keeping London safe

05/03/2018Keeping London safe

Theo Blackwell, London’s first-ever chief digital officer (CDO), speaks to PSE’s Luana Salles about the role he plays in ensuring the... more >
BIM: Digitising the public sector

19/02/2018BIM: Digitising the public sector

PSE’s Josh Mines talks to Stephen Crompton, CTO at GroupBC, and Stuart Bell, the company’s sales and marketing director, about how Bu... more >

public sector focus

  • 12/06/2018G-Cloud 10: small changes, big opportunities

    Rafael Cortes, Foehn head of marketing, explains how G-Cloud 10 should be a catalyst for innovative solutions and not a source of complacency. It was...
  • 04/06/2018Targets and tribulations

    David Willett, corporate director at The Open University, walks us through the university’s research into the apprenticeship levy, as well as...
  • 30/04/2018The legacy of Grenfell

    PSE’s Seamus McDonnell looks at the reactions of councils and the government to the Grenfell Tower fire, from the immediate aftermath to the...
View all News