Norfolk County Council to respond to business rates consultation

Norfolk County Council is finalising its response to Government on plans to change the way business rates are distributed.

While council tax is retained locally and shared among local authorities providing services, business rates are currently pooled centrally and then redistributed back to councils and the police as part of the formula grant.

Norfolk benefits under this system – councils collected £227.259m from businesses in 2009/10 and received back £277.332m.

The Government is proposing that business rates are retained locally, to give councils more of an incentive to focus on local business growth.

In its draft consultation response to Government, presented to Cabinet on 10 October, the County Council has highlighted concerns that the 2012/13 Formula Grant will be used as a basis to work out funding for the new scheme. As the County Council already loses out due to the ‘damping’ applied to the current Formula Grant.

In future, increased funding for council services will be linked to local growth in the business rate base - this is an opportunity but also a significant challenge to try to generate the growth needed to fund the cost and increased demand for services.

And the Government will still ask local councils to return a proportion of the business rates, which will be set aside to fund other grants and new services.

However, the County Council welcomes a system which would allow businesses to see at least some of their rates invested directly in local services.

Under the new plans, business rate payers would see no change in the way that their properties are valued or how business rates bills are calculated. The new scheme would be introduced from 2013/14.

Click here to read the full report that went to Cabinet on 10 October.