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Only £197k of £300m rates relief fund distributed so far

By Georgina Townshend , 10-Aug-2017
Last updated on 10-Aug-2017 at 18:05 GMT2017-08-10T18:05:21Z

Rates 'fiasco': Liberal Democrats used Freedom of Information requests to compile figures
Rates 'fiasco': Liberal Democrats used Freedom of Information requests to compile figures

Local authorities have only paid out £197,000 of the £300m earmarked for business rates relief, since the payments became 'available' in April – the Liberal Democrat Party has revealed using Freedom of Information (FOI) requests.

The £300m national relief fund was announced in the spring Budget to help businesses hardest hit by the changes to rates, with local authorities being tasked with distributing the funds. 

However, after sending FOI requests to all local authorities in England, out of the 99 that responded, only two have so far distributed any fund money.

These councils are Tandridge, East Sussex, which has distributed £156,000 and Amber Valley, Derbyshire, which has passed on £41,000.

A quarter of councils that gave a reason for the delay blamed the need to update software to automate payments, one third said they were still waiting for approval from their local council and one fifth were still “developing local schemes” to distribute the funds.

Business rates ‘fiasco’

In response to the figures, Liberal Democrat leader Vince Cable said the Government’s “business rates fiasco” threatens to turn England’s high streets into “ghost towns”.

“Firms that were hardest hit by this punishing tax rise were promised rapid relief to cushion the blow, but five months on most have received nothing,” he continued.

"That is enough time to wreck many a small independent business, which face having to lay off staff or even go bust.
 
“This delay is completely unacceptable. The Government risks crippling thousands of small businesses through its incompetence.”

Cable said ministers now need to “get a grip” and ensure struggling business owners get help “before it’s too late”.

Businesses most in need

Commenting on the FOI figures, British Beer & Pub Association (BBPA) chief executive Brigid Simmonds said it is “deplorable” that much-needed rates are not yet reaching those small businesses most in need.

“We are hearing a very similar story from our members, when it comes to the pub-specific relief announced in the March Budget, which is itself worth £25m,” said Simmonds.

“While the Government has taken up our calls for action, and has been putting pressure on councils, the delays at local level are inexcusable. If some councils can get their rates relief up and running, others should be able to do the same.”

In July, the Department for Communities and Local Government (DCLG) urged pubs to chase local authorities for delayed rates relief after it published guidance to help councils identify eligible pubs in their area during the previous month.

The top reasons given by 47 (48%) of the local authorities that gave a reason for not allocating funds yet, were: 

  • 16 (34%) are waiting for approval from the council 
  • 11 (24%) are waiting for delivery software to be delivered
  • 10 (21%) are still developing/modelling/consulting on their schemes
  • 8 (17%) have approved their schemes, but have not yet allocated funding to businesses
  • 2 (4%) are waiting for approval from their precepting (higher) authorities

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