Local authorities will be able to access a £300m fund in order to ease business rate revaluation challenges in their local areas, chancellor Philip Hammond has announced.
The pot is part of a £435m allocation designed to tackle the stark variation in changes to business rates across the country after it was revealed rates in London would rise by 11% above inflation, while in the North they would fall by 10%.
It remains unclear how the fund will be allocated across the country. Mr Hammond said communities secretary Sajid Javid would reveal the formula ‘in due course’.
Other measures include a new cap preventing rates for businesses leaving small business rate relief increasing by more than £50 in the next year.
Pubs with a rateable value less than £100,000 will also be granted a £1,000 discount – a measure that will aid 90% of pubs across the country.
Mr Hammond said: 'Taken together, this is a further £435m cut in business rates, targeted at those small businesses facing the biggest increases, protecting our pubs, and giving local authorities the resource to respond flexibly to local circumstances.'
Responding to the announcements, IPPR North director Ed Cox claimed the need for business rates intervention was ‘due to our dysfunctional approach to funding local government’.
Deputy chief executive of think-tank Centre for Cities Andrew Carter insisted the change that was most needed was the introduction of more frequent revaluations.
This, he said, would make business rates more accurate and timely, and reduce volatility in the system.
He added that the promise to introduce more gradual rates changes could be a 'double-edged sword' for businesses.
'While it will help firms in places like London which were facing the biggest increases in rates, it will also mean smaller decreases for businesses in less prosperous parts of the country, which have been overcharged in recent years and could now miss out on the big rates cuts they were expecting.'
Islington LBC's executive member for economic development, Cllr Asima Shaikh, welcomed the cap on increases for businesses that set to lose small business rates relief, but warned that the measure was 'for a limited time only'.
