Firms hit by rate change could get financial help But £2.6m council fund for small businesses is less than others

THE biggest local authority in Europe is in line for a smaller handout than some London boroughs for vulnerable firms hit by the controversial business rate revaluation.

All councils will receive a slice of a £300 million business rates discretionary fund unveiled by Chancellor Philip Hammond in his budget last week.

Birmingham could get more than £2.6 million to help shore up firms after the changes.

But the gigantic council is getting just the tenth highest grant – the top nine all going to London boroughs.

Its 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. The fund is designed to help small local companies adjust to their rate revaluation and follows an outcry from the business community over the changes.

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 alreadystretched local services.”

Other West Midland 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 big winners and 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 a major outcry from business leaders.There were also complaints that a growing number of online firms exist outside 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 hand over half of the money raised to Government.

According to a Department for Communities and Local Government consultation document : “The Government believes local authorities are best placed to judge the particular circumstances of local ratepayers 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.”