Councils under pressure after delays to business rates relief

Helen Cahill
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Councils were allowed to determine their own systems for business rates relief (Source: Getty)

London councils have come under pressure after failing to hand out business rates relief six months after it was allocated to them by the government.

Local authorities including the City of London, Tower Hamlets, Hackney and Islington have not yet allocated relief funding, according to a list published by the government last week.

Analysis by rates specialists CVS found the councils are sitting on a total of £29m in relief funding for businesses.

Read more: Foreign diplomats dig heels in over £1m of business rates owed to UK

In the Spring Budget, chancellor Philip Hammond announced a hardship fund for the businesses facing the steepest rises in business rates this year. The government said councils should decide how to allocate the funds.

The funding has been delayed in part due to software updates. Some councils have also conducted public consultations to decide how best to distribute the funds.

Councils which have carried out a public consultation include Barking and Dagenham, Hackney, the City of London, Lewisham and Waltham Forest.

A City of London Corporation spokesperson said: "The City of London Corporation supported the chancellor's announcement of business rate relief earlier this year. Since then we have been in contact with local businesses that may be eligible for the relief, laying the groundwork for the formal implementation."

Business rates relief will be handed out to firms in the Square Mile next month, the spokesperson said.

Read more: Delay on business rates relief causes 'panic' for London firms

However, Islington Council said its £8.6m relief package was a "drop in the ocean" as compared the the extra £315m businesses will be forced to pay over the funding period.

“While the rate relief money is welcome, it was very disappointing the government announced it at the last minute and with no warning – this greatly delayed the speed at which rate relief could be brought to those who need it most," said Asima Shaikh, Islington Council's executive member for economic development.

"This last-minute announcement has caused delays for many councils, for example because of changes to IT software needed to apply the rate relief."

Mark Rigby, chief executive of CVS, said London councils should have distributed the relief more quickly, and said local authorities should be prepared for any announcements that could come up in the Autumn Statement.

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