Business rates - changes are perfect storm for councils and social care - IPPR

Alfie Stirling, IPPR Senior Economic Analyst, commenting on changes to business rates, said:

“While revaluations are important, they are possibly the least controversial of three changes coming to Business Rates in the coming months and years.

"From April this year, new tax reliefs will mean that 600 thousand businesses will no longer pay Rates at all, while a further 300 thousand will get a discount. More significant still, by 2020 the entire system of distributing business rates across local authorities will change. Local areas with fast growing economies and exuberant property prices will no longer have to share any of the growth in their tax receipts, while councils in poorer areas of the country risk being left even further behind.

“Take all three of these together and you arrive at a perfect storm for local authorities in parts of the country with low property values and limited big business. This comes on top of a decade of cuts to local government grants, a social care system – which depends upon local public funding – that is buckling under the pressure of an aging population, and consequently an NHS that is unable to free up beds for even routine procedures.

“IPPR has called on government to adopt its proposal for a fairer, more efficient form of business rates distribution that improves incentives for local authorities and business to grow local economies, while making sure that no one gets left behind.”

Ends

Contact:

Kieren Walters k.walters@ippr.org 07921 403651

Editor's Notes:

1. IPPR's publication 'Better rates: How to ensure the new business rates regime promotes growth everywhere', can be found here: http://www.ippr.org/publications/better-rates

2. IPPR aims to influence policy in the present and reinvent progressive politics in the future, and is dedicated to the better country that Britain can be through progressive policy and politics. With nearly 60 staff across four offices throughout the UK, IPPR is Britain’s only national think tank with a truly national presence.

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