BUSINESS RATES

There is no better time to sort out funding

Heather Jameson says it will take a wholesale rethink of local government funding – and a social care bill – to fix finances. 'And there is no better time to start than now.'

When the Government announced councils should hold off on business rates billing until after the March Budget last week it became clear there is an announcement afoot.

On the whole, most of the sector seems grateful for the heads-up, saved the time and effort of billing twice, but equally perplexed at a Government that keeps them in the dark on their finances, right up to the wire of the annual budget-setting.

From the very start of the COVID crisis, council budgets have been hampered by a lack of central Government clarity. From the communities secretary back-tracking on his funding pledge to an 11th hour question mark over business rates income, finance directors have been expected to provide financial sustainability and stability amid short-term funding solutions.

It is unsurprising. Central Government – caught in a spiral of uncertainty, throwing money at public services and propping up the economy in a desperate bid to hold the country together – is firefighting emergencies and grasping at short-term fixes.

But this short-term funding system predates the COVID crisis as the Treasury is forced to patch up a finance system that is no longer fit for purpose.

Council tax and business rates can't keep up with the needs of social care.

In London in particular, a rapid drop in population in the Census year, a cut in council tax collection due to job losses and an increase in businesses' claim for a rates reduction are all ramping up the uncertainty.

The business rates billing pause is expected to have been prompted by an extension to rates relief in the March Budget, rather than a fundamental reform of finance. But the Treasury knows it can't carry on.

The business rates review announced in the summer is yet to emerge but is expected to tackle online retail – that alone is just not enough.

With a dozen councils in negotiations with the MHCLG over a financial rescue and more to come, tinkering at the edges of reform will not do

It will take a wholesale rethink of local government funding – and a social care bill – to fix finances. And there is no better time to start than now.

BUSINESS RATES

Prioritising stroke is an evidence-based choice for councils

By Juliet Bouverie | 08 July 2025

Piling pressure on a crumbling system won’t support stroke survivors, says Juliet Bouverie.

BUSINESS RATES

After the riots

By Martin Ford | 08 July 2025

A session at last week’s LGA conference in Liverpool heard insights from one place impacted by last summer’s rioting, with reflections on the key lessons lea...

BUSINESS RATES

London remade

By Jonathan Werran | 04 July 2025

London has a golden opportunity to reset and reform the relationship between its boroughs and the mayoralty. Just how bold and radical this reform will be de...

BUSINESS RATES

Proud to serve the sector

By Louise Gittins | 03 July 2025

Writing in LGA Conference week, newly re-elected chair Cllr Louise Gittins reflects on the Government’s key announcements and says council leaders must have ...

Heather Jameson

Popular articles by Heather Jameson