Firms lose out on business rate relief

An investigation by Margot James, MP for Stourbridge, has revealed that local authorities (LAs), across the country are failing to use powers to reduce business rates for local companies. The findings reinforce figures provided by the Department of Communities and Local Government in a written answer to MPs.

Margot James MP

The power to award discretionary rate relief, available in limited circumstances to local authorities since 1988, was strengthened and expanded by provisions contained in the Localism Act 2011. However data from nearly two hundred Las, sourced through a Freedom of Information (FOI) request sent this year to all LAs, shows that nearly 9 in 10 local authorities in England have yet to use the expanded discretionary relief powers at their disposal through the 2011 Act. 

Responses from West Midlands’ local authorities show that Birmingham City Council is one of the top performing authorities in the country, granting over £700,000 business rates relief in each of the last three years. But just half a mile away none of the Black Country LAs have reduced rates for local business despite having the same powers to do so.

In a parliamentary question to the Department of Communities and Local Government yesterday, Margot raised this discrepancy and asked what more could be done to encourage better use of these relief powers. In reply, Parliamentary Under-Secretary of State Brandon Lewis said: “My hon. Friend makes a very good point, and in directly asking the question she has done a good job in highlighting this issue to such authorities. All local authorities have the power to do this… it is a good opportunity for local authorities to support local business and to develop local business growth.”

Margot said: “Local authorities having the powers to help local businesses facing high business rates, an alarming number of LAs are not using these powers. The government has extended the powers available to local authorities to discount the rates in their area, as well as introducing extra rebates for small retailers and empty properties. Businesses in some areas, especially SMEs and retailers, need the help outlined in the Localism Bill. Birmingham City Council is encouraging growth by using these powers and it is time for Black Country business to get the same support in order to compete on a level playing field”.