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£2.6m for vulnerable Birmingham firms following business rate revaluation

Councils are getting a share from the £300 million business rates discretionary fund unveiled by Chancellor Philip Hammond in his budget last week

Birmingham City Council could get more than £2.6 million to help vulnerable firms hit badly by the controversial business rate revaluation.

All councils are getting a share from the £300 million business rates discretionary fund unveiled by Chancellor Philip Hammond in his budget last week

But Birmingham, the UK’s largest local authority, is getting only the tenth highest grant from the fund - with the top nine going to London boroughs.

It’s share will be £2,627,000 this year, £1,276,000 next and £525,000 in 2019-20. In 2015 there were 37,200 active businesses in the city.

According to a Department for Communities and Local Government consultation document: “The Government believes that local authorities are best placed to judge the particular circumstances of local rate payers and direct the funding where it is most needed to support local economies. The Government will allocate the available funding to each billing authority area based on assumptions about how authorities will target their relief scheme.”

Lauren Hurley/PA Wire
Chancellor Philip Hammond departs 11 Downing Street, London, as he heads to the Palace of Westminster to deliver the Budget statement.

The fund is designed to help mainly small local companies adjust to their rate revaluation and follows major outcry from the business community at the changes. There have also been concerns raised by councils at the likely rise in appeals and costs of appeals.

Cllr Claire Kober, who chairs the Local Government Association’s Resources Board, said: “We have long argued that giving councils the freedom and funding to set discounts and reliefs locally would help them better support small businesses and local economies.

“We are pleased local authorities will be able to work with businesses in their local areas to identify which need this new discretionary relief funding the most and that some pubs will receive business rates discounts.

“There is a risk that some councils will be left out of pocket because of delays to billing caused by the lack of certainty about relief over recent weeks. It is important that the Government reimburses them for any loss of income or extra costs incurred as a result.

“Councils do not set business rates but any likely rise in appeals as a result of this latest revaluation does pose a risk to the funding of already-stretched local services.”

Surrounding councils are also getting a handout: Wolverhampton £392,000, Sandwell £380,000, Dudley £352,000, Walsall £341,000 and Solihull £228,000.

This is the first revaluation since the 2008 financial crisis and has seen some big winners and big losers with London firms especially hard hit while the parts of the north of England have seen significant reductions.

The changes, announced in February prompted major outcry from business leaders. There were also complaint that the growing number of online firms exist ourside the rating system as it is based on property prices.

The Chancellor also announced a £1,000 rate relief aimed at pubs.

Birmingham is also one of the first councils to pilot a full business rate retention scheme - meaning it will no longer be required to hand over half of the money raised to Government.

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