Recommendation 7

HM Government Acknowledged

In the interests of providing stability, the rates and system of business rates retention will remain as last year in 2022/23. The Government is committed to ensuring that funding allocations for councils are based on an up-to-date assessment of their needs and resources. The Government will work closely with local partners and take stock of the challenges and opportunities they face, before consulting on any potential funding reform. At Budget 2021 the Government published the conclusions of the Business Rates Review, delivering both meaningful reform and cuts worth £7 billion to business over the next five years. This included: • Freezing the business rates multiplier for another year (22/23), saving ratepayers £4.6bn over the next five years. • Providing a new temporary relief worth almost £1.7bn for eligible retail, hospitality, and leisure businesses in England to support local high streets until the next revaluation, building on over £16bn of support already provided to these high street sectors during the pandemic. This means over 90% of retail, hospitality and leisure businesses will receive at least a 50% reduction in their business rates bills in 2022-23 when taken together with Small Business Rates Relief. Spending Review 2021 provided local authorities with a 3% average annual real term increase in their core spending power over the next 3 years to 2024-25. This sustained real-term increase in core funding gives local authorities the certainty to plan over the long term with the largest sustained rise in core funding in more than a decade. The Government is giving local authorities flexibility to raise council tax to meet spending pressures across their budgets. Councils will need to judge themselves whether increases can be justified to their local electorates. The Government is consulting on the Local Government Finance Settlement which will confirm specific Council tax flexibilities.