Local authority leaders have called on the Government to protect them against the financial risk of business rates appeals as new figures reveal over 100,000 cases remain unresolved.
New data from the Local Government Association (LGA) shows that over one million businesses have challenged their business rates bill since 2010 and 133,060 of these appeals are yet to be ruled on.
This creates a lot of ‘financial risk and uncertainty’, the LGA says.
While councils do not set business rates or rule on challenges by businesses making appeals, they are forced to set money aside as they have to fund half the cost of any backdated refunds.
The LGA today told the Government, ahead of a Westminster Hall Debate on business rates, that councils have had to divert £2.5bn away from frontline services in order to cover the unresolved appeals.
‘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,’ said Cllr John Fuller, vice chairman of the LGA’s Resources Board.
Acknowledging that it was right that businesses should be able to challenge their valuation, Cllr Fuller warned the unresolved appeals caused ‘uncertainty’ for councils.
‘Despite not setting business rates or ruling on appeals, councils are having to take billions of pounds away from already stretched local services, such as adult social care, protecting children and supporting businesses and boosting local growth, to cover the financial risk and uncertainty arising from this backlog of appeals. This is completely unfair,’ he said.
‘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 £5bn by 2020, this money is needed to fund vital services and help plug growing funding gaps.’