Localism Bill will give councils flexibility on business rate levels

Author: David Williams, Public Finance   |  

The forthcoming Localism and Decentralisation Bill will contain measures to help councils stimulate local growth through business rates, Local Government Secretary Eric Pickles announced today.

Authorities will be given the power to set local discounts on business rates to support struggling businesses and to encourage start-ups in their area.

However, the rate cuts will have to be funded locally.

Pickles also pledged to cut red tape for small businesses, making it easier for them to claim tax discounts. At the moment, the Small Business Rate Relief is available only to firms that have filled out an application form. In future, all eligible businesses will have their discounts calculated automatically.

The local government secretary said the measures would ‘give councils a genuine financial stake in their local economy, and let them target their support at local shops, pubs, post offices and start-up enterprises’.

However, plans to allow councils to keep the proceeds of business rates, included in the local growth white paper, have yet to be finalised. Pickles said: ‘We are considering proposals to let [councils] keep what they collect.’ The rates plans are due to be considered as part of the local government resource review, expected to begin early next year.

The Localism and Decentralisation Bill was originally scheduled for publication this week, but has been held back. A Department for Communities and Local Government spokesman said this was due to a parliamentary scheduling bottleneck.

The Bill is now expected to be published around December 6.

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