Hiba Mahamadi 01 September 2017

Councils urged to apply for new business rates pilots

Local authorities in England have been invited to participate in a second round of 100% business rates retention pilots as pools across economic areas.

As part of the pilots, councils will be able to retain 100% of the growth in their business rates income in 2018/19.

The Government hopes to use the pilots to test more technical aspects of the 100% business rates retention system, such as tier-splits.

It wants authorities to form pools and apply for pilot status jointly in order to explore how rates retention can work across more than one local authority.

Whitehall wants to learn from the pilots’ administration and implementation to help design a national system for business rates retention.

The prospectus for the programme read: ‘We particularly want to see additional growth being used to promote the financial stability and sustainability of the pooled area.

‘In addition, we would expect some retained income from growth to be invested to encourage further growth across the area.’

This second phase follows on from the first round of pilots launched in Liverpool, Greater Manchester, West Midlands, West of England, Cornwall and Greater London in April.

Successful pilots will be announced in December.

The Department for Communities and Local Government also said that it was keen to focus on rural areas so that it can learn about the effectiveness of the scheme across the country.

It added it would work towards giving councils greater control over business rates by working with local authorities, the Local Government Association (LGA) and other parties.

Communities secretary, Sajid Javid, said: ‘I am committed to helping local authorities control more of the money they raise locally.

‘By encouraging councils to work together, with the aim of sharing their business rates income, it enables them to take a much more strategic view on decisions that benefit the wider area.’

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