William Eichler 25 November 2015

Spending Review: Local authorities to retain 100% of business rates

Local authorities will be able to retain 100% of their business rates, the chancellor announced in today's Spending Review.

George Osborne has reaffirmed his commitment to allow councils to keep all of the money raised through taxing local businesses operating in their areas. Nationally, this adds up to an estimated £26bn.

Local authorities will also, according to the Chancellor, be able to lower business rates in order to attract business investment.

Directly elected mayors too will have new fiscal powers. They will be able to raise rates on the condition that they use the revenue to invest in local infrastructure.

Central government grants will also be phased out.

Historically, local authorities paid all revenue raised through business taxes to the Exchequer. It would then be redistributed on a needs-basis according to the Formula Grant System.

This changed on 1 April 2013 when the Government allowed local authorities to retain 50% of business rates, while the remainder went to Whitehall.

Finally, in October 2015 the Chancellor announced that councils would be allowed to keep hold of 100% of the revenue derived from local businesses.

Today's announcement to 'abolish uniform business rates', as he said in the Spending Review, is an integral part of the Chancellor's 'devolution revolution', an attempt to correct what he characterised as the 'geographical imbalance' in the UK.

By devolving the responsibility for business rates to councils, the Chancellor hopes to encourage local authorities to become more competitive and to focus their attentions on attracting private investment into their own areas.

Reacting to the Chancellor's October announcement, Cllr Gary Porter, chairman of the Local Government Association (LGA) said: 'Councils and businesses both agree that business rates should be a local tax set by local areas. It is right that all of the money which a business pays is retained by local government and this will be a vital boost to investment in infrastructure and public services.'

SIGN UP
For your free daily news bulletin
Highways jobs

Heavy Goods Vehicle / Light Vehicle Mechanic

Derbyshire County Council
£14.26 - £15.25 per hour – (2024/25 pay award pending) plus market leading package (see below)
You will need to be suitably experienced, hold a minimum of an NVQ Level 2 (or equivalent) vocational County Transport – Brimington Workshops
Recuriter: Derbyshire County Council

Traffic Installation Technician

Telent
Competitive
Traffic Installation TechnicianWhen you join our Engineering Team at Telent, you'll be empowered to innovate and drive common solutions, working close England, West Yorkshire, Leeds
Recuriter: Telent

Enterprise Architect

West Northamptonshire Council
£63510 - £66561
We are looking for an Enterprise Architect to act as the vital link between our business teams to understand what we need to do, our technology teams to drive the right strategic technology decisions for the Council and our Transformation teams to make th Northampton
Recuriter: West Northamptonshire Council

Senior Temporary Accommodation Officer

Chelmsford City Council
£37,899 to £41,562 per annum
The Council’s Strategic Housing Service is looking to recruit a Senior Temporary Accommodation Officer Chelmsford, Essex
Recuriter: Chelmsford City Council

Civil Enforcement Officer

Chelmsford City Council
£24,591 to £26,007 per annum
The Council-run South Essex Parking Partnership (SEPP) led by Chelmsford City Council. Chelmsford, Essex
Recuriter: Chelmsford City Council
Linkedin Banner

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.