Recommendation 2

We agree with the principle of incentivising councils to grow business rates in their area, as a means of making them less reliant on central funding, but we are concerned about the impact on councils that, through no fault of their own, are less able to do this. As our predecessor Committee concluded, the Business Rates Retention Scheme is too complex in seeking to both incentivise growth and redistribute funding according to need. We are reassured that the Government remains committed to implementing the Fair Funding Review, which, along with the business rates “reset”, could partly restore the link between funding and need, but in the long term we do not see how the BRRS can be the most sensible means of matching funding to need.