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News - 05/10/2015

LSH urges caution over business rates reform

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The 2015 Conservative Party Conference got underway today (05 October 2015) in Manchester with George Osborne signalling one of the biggest transfers of power to local councils in recent times. 

Following the announcement that councils will now be able to keep all revenues collected from business rates, Beverley McDougall, Director of Business Rates at Lambert Smith Hampton, comments:

“Local councils have got what they pushed for but are there perhaps dangers that haven’t been taken into account? Last week for example, Redcar and Cleveland council issued a warning about a probable shortfall in their budget from a £10.7m business rates arrears created by the liquidation and administration of the biggest employer in the authority, SSI UK Ltd. 

Checks and balances crucial 

“No one should be better placed to know what is required in their authority than those elected but there is potential for a “kid in a sweet shop mentality”, with councils spending left, right and centre, without proper checks and balances. Hopefully the recent years of austerity should have countered that but we are not out of the woods yet by a long shot.

“It also has the potential to create further inter-regional and sub-regional competition for trade and business. The losers will be those authorities where there is no scope to offer lower rates – mainly those that are in need of most central government funding currently. The danger is that the rich get richer and the poor get poorer.

11 years and counting

“The real question is how and when this will be implemented? In 2004, the Housing, Planning and Local Government Select Committee recommended that the Government return business rates to local control ‘as soon as possible’ and nothing resulted. This Government will need to follow up the rhetoric, with clear, practical action.”


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