Business Rates: Devolution

Lord Greaves Excerpts

Wednesday 21st December 2016 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, the first point I make to the noble Lord is that, although new responsibilities are being talked about, he will recognise that a considerable amount of new finance will be generated by 100% business rate retention. We are talking about some £12.5 billion—a considerable sum. Yes, of course the discussion is both within government and, as I indicated, with our local authority partners.

[Lord Greaves (LD)]

My Lords, does the Minister agree that business rate income for local authorities can be quite erratic and unpredictable, particularly for small local authorities, owing to the large number of appeals against business rate valuations now in the system? Will the Minister take steps to speed up the process of dealing with such appeals? Does he understand that, for many local authorities, it is very difficult to plan a budget for the next year without putting aside a serious amount of reserve money—which could otherwise be used for services—as a means of mitigating potential risks arising from a reduction in business rate owing to appeals, which can involve the payment of refunds as well as reducing the current year’s income?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is right about there being an element of risk and volatility in the system. We are seeking to address both those points to ensure that we smooth the process. Risk from a single business on which a local authority was very dependent would perhaps create an issue and so would appeals, which, as the noble Lord indicated, can have an effect on cash flow. We are seeking to address both of those in discussions with local authorities. We also have a technical working group drawing on people from local authorities as well as from the DCLG and elsewhere to address the very issues that the noble Lord raises.