This White Paper sets out the Government's proposal to introduce a power for local
authorities and the Greater London Authority (GLA) to raise and retain local supplements
on the national business rate, having examined carefully the potential benefits and costs,
including economic impacts.
Building on the extensive public debate on reforms to business rates in England, the
recommendations of the Lyons Inquiry and the commitment to consider options for
business rate supplements in the review of sub-national economic development and
regeneration, the Government’s proposed model for business rate supplements involves
four levels of protection for business:
• Revenue from supplements will only be available for spending on
economic development – such as infrastructure. Plans will need to be
clearly specified and committed in advance. Spending will be subject to a
transparent accounting framework to ensure this.
• A national upper limit of 2p in the pound will be set on the level of
supplements that can be levied.
• To protect smaller businesses from disproportionate burdens, properties liable
for business rates with a rateable value of £50,000 or less will be
exempted from paying supplements.
• Where the supplement will support more than a third of the total cost
of the project there will additionally be a full ‘double-lock’ ballot of
businesses affected.
Revenues from supplements will be locally raised and retained, with local
decision-making on the duration of any supplement and the specific projects it should be
spent on. The Government intends that that only the highest tier local authority in
any area should be entitled to levy supplements. These authorities will be able to
cooperate to raise supplements to fund joint projects, within the existing statutory
framework. In London, the power will rest with the Greater London Authority. Shire
counties will be required to consult their districts on any new supplement proposals.
The Government will consult on technical issues before finalising detailed
arrangements.