Magazine article Public Finance

Businesses Fear Councils Will Use Rate Powers to Plug Finance Gaps

Magazine article Public Finance

Businesses Fear Councils Will Use Rate Powers to Plug Finance Gaps

Article excerpt

The economic downturn has heightened business concerns about the new supplementary business rate, the British Chambers of Commerce has told Public Finance.

The government's draft legislative programme, set out earlier this month, promised a Business Rates Supplements Bill in the next parliamentary session. The Bill will create a new power for the highest-tier local authority in an area to levy a supplement on the business rate and reinvest the proceeds in the local area.

But David Frost, director general of the BCC, warned that the rate must not be used to plug gaps in council finances at a financially testing time.

'With a slowing economy and surging inflation, the last thing that businesses will want to see is local authorities using new business rate powers to dip into the pockets of hard-pressed companies to subsidise shortfalls in their budgets,' he told PF.

Accountability will be absolutely crucial if businesses are going to buy into this. Firms must be allowed a vote on any proposals, be fully consulted beforehand on what the money is being raised for and have full involvement in the delivery of any projects. …

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