Recommendation 7

We reiterate our recommendation from our recent report into local authority financial sustainability that the Government should allow councils to retain 75% of business rates from 2022, and that it should not impose commensurate cuts to grant funding. The additional funding should then be put towards equalisation in a separate grant designed for this purpose. As we also recommended in that report, in the longer term, the Government should consider options for wider reform of council tax and business rates, including possibly replacing them with a proportional property tax.