Councils forecast business rates income to hit £23.5bn by 2017
Business rates income is expected to rise to £23.5bn next year, new figures from the Department for Communities and Local Government show.
The figures reveal that total non-domestic rates for local authorities are expected to be £23.1bn in 2015-16 and £23.5bn in 2016-17, and have been rising for the past three years, with the total sum at £20.5bn in 2013-14 and £21.6bn in 2014-15.
However, councils will only receive £11.75bn of the 2016-17 sum, until 100% of business rates are devolved from 2020.
Local government minister Marcus Jones MP said the figures were due to British business being “on a roll”.
However, despite the business rate retention plans, local authorities are also facing the loss of the direct revenue grant from the government. However, communities secretary Greg Clark MP announced last week that transitional grants will be available during the next four years to ease the financial strain.
Credit agency Moody’s has warned that the devolution of rates will increase council debt as a result of increased borrowing to invest in business development, and council leaders have expressed uncertainty about the plans.
The Local Government Association (LGA) has called for devolution of business rates to go further by allowing companies to self-assess their rateable value.
The latest DCLG figures also show that reliefs given to places such as charities, rural village shops and empty properties have declined, from £3.4bn in 2014-15 to a predicted £3.3bn in 2015-16 and £3.2bn in 2016-17.