Rate yields rise 9.1% but expose regional diversity
Author: Jonathan Werran, The MJ |
Net rate yields for business rates increased by 9.1% to 21bn in 2011/12, figures collected by the DCLG have revealed.
According to data published on 15 August, after taking into account costs of collection, the net rates pool increased by a similar amount, 9.2%, to 20.7bn, in 2011/12.
However, the figures laid bare regional disparities in the national pool, with London contributing just below 6bn in yields ? 29% of the total ? despite representing 15% of the population.
By contrast, councils in the North East collected 773m, 3.7% of the pool, while representing 5% of the population. North West authorities, accounting for 13.3% of the population, contributed a smaller share of the cash pot – 11.3% or 2.3bn.
A spokesman for the Local Government Association attributed the size of the increase to high inflation, as measured through the retail price index (RPI) ? which peaked at 4.7% over the period in question.
Describing the rise as a ‘one-off spike’, the spokesman said there were fewer reductions in rates relief than previous years, owing to the fact that the returns had come early in the five-year cycle for assessing rateable values.
‘Another big outlier in terms of fluctuation is the fact a lot of the concessions on empty property relief, adopted in 2009, ended,’ the spokesman added.
Alex Thomson, chief executive at Localis, said the latest figures, issued ahead of plans for local retention ‘will give council finance chiefs food for thought as they plan their response to the current consultation’.
‘We have long argued that councils should be given a real incentive to pursue economic growth,’ Mr Thomson added. ‘This is important, given the fragile state of the economy and the need for councils to pursue every potential revenue stream.’