Two-thirds of councils fail to distribute business rates relief fund

Two-thirds of councils have failed to distribute business rates relief funds, leaving the majority of a £1.5b government funded package unclaimed.

Just 32% of councils have made any payments since the fund was announced a year ago by chancellor Rishi Sunak. Research from property consultancy Gerald Eve found that 66% authorities are yet to establish any kind of scheme to allow businesses access to the funds.

The Covid-19 Additional Relief Fund (CARF) was intended to compensate businesses impacted by the pandemic who had not been granted any business rates support. It followed the retrospective annulling of some business rates appeals.

However, the government only confirmed the amount each council would receive to distribute in December 2021, when it also issued guidance on the types of businesses to which support should be targeted.

Consequently, just 113 of England's 309 councils have adopted schemes for distribution, with 100 having commenced making payments. Of the schemes in place, 46 do not provide an indication of the size of potential payments.

UKHospitality chief executive Kate Nicholls said: "Money has been in local authority bank accounts for more than two months now, so there's really no excuse for these vital grants not being paid out to businesses that are in desperate need of support.

"We urge all local authorities to expedite this process and abandon the obstructive processes that some have put in place – the best local authorities have been paying money out for weeks, so we know there's no need for delay.

"There must be an immediate end to red tape so that businesses in regions across the country can begin their post-pandemic recovery, particularly at a time when they face mounting financial pressures amid a cost-of-living crisis that's hitting both them and their customers."

Jerry Schurder, business rates policy lead at Gerald Eve, added: "The government claimed CARF was the fastest and fairest way of getting support to businesses that need it the most, but the past year has shown this to be complete hyperbole. In fact, the opposite is true."

Schurder warned that even those businesses successful in accessing the funding are likely to receive less that they could have expected if business rates appeals had not been annulled.

For example, Tamside Metropolitan Borough Council is limiting relief to just £1,500 for small businesses and a maximum of £4,500 for the largest firms.

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