Councils forecast £23.5bn income from business rates

Local authorities across England have predicted they will generate a record-breaking £23.5 billion income from business rates next year, as the devolution revolution kicks off.

The expected increase will be around £400 million more than normal, and is down to the rise in the number of new businesses across the country. New regulations will mean councils which drive growth will be rewarded by new rules which enable them to keep 100 per cent of business rates income.

The changes are set to take place in 2020. However, if the rules were to come into action this year, local authorities would be able to keep all £23.5 billion, as opposed to £11.75 billion under existing regulations.

Marcus Jones, local government minister, said: “As part of our long-term economic plan British business is on a roll. Councils already plan on handing out discounts of £3.2 billion which supports charitable work, fills vacant shops and encourages entrepreneurs but we want to further incentivise councils to do even more.

“That’s why by 2020 councils will have greater financial autonomy and be handed the power to cut rates as much as they like to boost enterprise in their local areas. And those that do give business a helping hand will reap the rewards - keeping 100 per cent of the additional growth they generate.”