Recommendation 24

The spending review confirmed the timing of the next and future business rates revaluations and stated the government would consult on the possible introduction of an Online Sales Tax to partially replace business rates.93 However, much remained undecided. When we challenged the Department on decisions to come, it noted that the new Secretary of State appeared not to favour going ahead with current plans to increase business rates retention in the near term, although more might be said at the provisional local government finance settlement.94 The Department told us that distributional issues like the review of the funding formula were similarly likely to be the subject of announcements with the provisional settlement.95 The provisional local government finance settlement for 2022 to 2023, announced on 16 December 2021 confirmed the continuation of the existing arrangements for business rate retention and an intention to review the funding formula.96 Following ministerial decisions, the Department committed to significant consultation with local authorities to enable them to understand what the changes would mean for them individually.97 The Treasury was clear that policy development for the online sales tax was not far enough advanced to allow any estimate of the impact that it might have on local government finance.98 We were told that the Department for Health and Social Care has yet to announce how to spend funding allocated for improvements in adult social care and workforce support, although we were assured some funding will start to flow from April 2022.99 Since then, the adult social care white paper has been published but it only sets out how some of the funding will be spent.100