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06.11.17

Inquiry into 100% business rate retention launched to deal with 2020 uncertainty

The DCLG has launched a new inquiry on 100% business rate retention after the policy failed to get through the Commons when the general election was called earlier this year.

This inquiry will continue from the original study into business rates, reviewing plans to add to council’s responsibilities in return for the retention of funds.

The new funding system was originally due to be implemented in 2019-20, with the Revenue Support Grant (RSG) due to be phased out.

The Local Government Finance Bill fell when parliament was dissolved for the general election. It was not revived in the Queen’s Speech but the government has confirmed it is still committed to the reforms.

“The proposal to allow authorities to retain 100% of revenue raised from business rates is a significant reform to local government finance,” commented Clive Betts, chair of the DCLG committee.

“The secretary of state told us last month that, although the government still intends to push ahead with the policy, it will be delayed from the original schedule. This will undoubtedly have an effect on how local councils make future financial decisions.

“We are keen to explore some of these impacts and also examine how the outcome of the government’s Fair Funding Review in 2020-21 will affect councils.”

Opponents of the bill have called the plans “unrealistic”, with London Councils and the LGA criticising the policy earlier this year.

Councils can submit written evidence to the committee here, until the closing date on 14 December.

Top image:  Adam Tinworth

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