Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Housing, Communities and Local Government, what estimate her Department has made of the difference between revenue forgone by billing authorities as a result of mandatory business‑rate reliefs and the amount reimbursed to those authorities through Section 31 grant payments; and if she will publish the latest quantified assessment.

Annually the Department collects from local authorities an estimate at the start of the year and actual at the end year of their business rates data. The data includes the amount of revenue forgone by billing authorities as a result of mandatory business rate reliefs and the amount reimbursed to those authorities through Section 31 grant payments under the business rates retention system and is available here, including the most recent data collected for 2026-27.

Local authorities are compensated for those mandatory reliefs they award locally, given these reliefs reduce the business rates a local authority would otherwise have retained.

Since 2026-27, local authorities are compensated for all mandatory reliefs foregone fully via section 31. Before 2026-27 mandatory reliefs that were in existence when the business rates retention system was set up were funded via an adjustment to top-up and tariff funding allocations for each local authority and as new or amended mandatory reliefs were introduced they were compensated for via s.31 grant.