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English councils set to receive a record £23.5bn from business rates

Published 17/02/2016

Marcus Jones says British business is
Marcus Jones says British business is "on a roll"

English councils are expecting to receive a record £23.5 billion from business rates next year, the Government has announced.

It will be a £400 million increase from this year , according to the Department for Communities and Local Government.

It is also the highest income since business rates were introduced in 1990, the department said.

By 2020 councils will be able to keep all business rates income as the Government scraps the central grant, but under current rules they will only pocket £11.75 billion next year.

Local government minister Marcus Jones said: "As part of our long-term economic plan British business is on a roll.

"Councils already plan on handing out discounts of £3.2 billion which supports charitable work, fills vacant shops and encourages entrepreneurs, but we want to further incentivise councils to do even more.

"That's why by 2020 councils will have greater financial autonomy and be handed the power to cut rates as much as they like to boost enterprise in their local areas.

"And those that do give business a helping hand will reap the rewards - keeping 100% of the additional growth they generate."

The Chartered Institute of Public Finance and Accountancy (CIPFA) warned that the move towards 100% retention of business rates comes with "strings attached".

Sean Nolan, senior local government advisor at CIPFA, said: "We support greater financial autonomy for councils. Funding councils from local business rates is a positive and important step.

"However, these long-term opportunities come with short-term challenges.

"The Government needs to be clear this new money will come with strings attached. Councils will almost certainly get extra responsibilities when the scheme is launched in 2020, and in the meantime they are facing significant grant cuts elsewhere."

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