Peter Fullam, Director in Cushman & Wakefield’s Rating team in Birmingham, said: “This is a huge step that reverts to the pre-1990 system of councils keeping the business rates revenue for their area. It should foster closer links between councils and business which is positive as business rates do pay for many local services.
“However we need greater clarity to understand the consequences. What happens about equalisation? Will there still be some redistribution of rates revenues from urban councils with many high street businesses and high property values, especially in London, to councils without the tax base to pay for the current level of services provided? Clearly, that will need addressing to avoid many councils losing out substantially.
“Will councils be able to set their own multiplier or uniform business rate? Will there be central controls to limit variations of multiplier between councils or increases each year? Some form of business rates control may need to be introduced to ensure local authorities do not use punitive business rates in order to keep their council taxes low.”
