Housing, Communities and Local Government Committee

Business rates retention inquiry

Inquiry status: Concluded

Report and Government Response published.

Report published

The inquiry follows on from, and seeks to complete, an initial inquiry by the previous Committee on 100% business rate retention which also explored which responsibilities councils could take on in return for the increase in revenue. It made various recommendations in its interim report about how 100% business rate revenue should be implemented.

The new funding system was originally due to be implemented in 2019-20, with the Revenue Support Grant (RSG) phased out and councils taking on new responsibilities in return for the increase in their business rate revenue.

However the Local Government Finance Bill, which contained provision for 100% retention, fell when Parliament was dissolved for the General Election. It was not revived in the Queen’s Speech but the Government has confirmed it is still committed to the reforms.

The new inquiry will assess the implications of the extended implementation period and how it is affecting councils’ financial planning.

It will also examine the consequences of implementing the Fair Funding Review - the Government’s review into needs and redistribution – in 2020-21.

Terms of reference: Business rates retention inquiry

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