The retention of business rates could end up being unfair in two tier areas, new research has warned.
The County Councils’ Network (CCN) has found counties raise far less in business rates than their urban counterparts and face a more volatile picture – which could leave them lagging behind when it comes to rate retention.
According to the research, county areas produce 41% of GVA in England, but due to higher levels of rate relief, county councils receive dramatically lower levels of rates per head than urban areas.
In London, rateable values per head average £3,700 compared with £851 in county areas. In addition, the research showed huge discrepancies between district areas, even within single counties.
CCN finance spokesman, Cllr David Borrow, said: ‘A policy that undoubtedly is well intentioned could end up being unfair, with areas outside the major conurbations being left behind other parts of the country.
‘This study shines the spotlight on just how complex the system is and the need is to create a scheme that delivers for local authorities, businesses and residents, particularly in two-tier areas.
‘The rate retention is system needs to be designed in a carefully considered in an open, transparent and fair manner.’
He called for the government to get the needs-based review funding right to set a baseline for future need.
