CIPFA calls for greater support for local authorities during business rates transition


CIPFA, the Chartered Institute of Public Finance, is calling on the Ministry for Housing, Communities and Local Government (MHCLG) to provide councils in England with greater clarity, certainty and support as they prepare for changes to the business rates retention system.

From April 2020, local authorities will retain 75% of business rates, giving them greater control of money raised locally. MHCLG has been seeking views on how risk and reward can be shared, how income volatility can be managed, and how the system can be set up.

In its response to the consultation, CIPFA argues more work is needed to ensure the reform is successful. 

Joanne Pitt, CIPFA policy manager, local government, said: “Business rates reform will help councils shape their areas and generate economic growth by giving them greater control over their finances - however there is far more work needed to ensure these reforms land successfully. These reforms will bring additional risks into local government which must be carefully managed.

“Key to the success of this reform will be ensuring that the linking of local government funding with business rates does not negatively impact local authorities, as it is implicit in the scheme that a fall in business rates would lead to a fall in local authority income. 

“A well-managed transition period will help ensure local authorities and the communities they serve can reap the maximum benefits of these changes, creating a firm foundation going forward.  

“While CIPFA maintains that current funding levels are insufficient to meet growing demand, and is worried a number of authorities show signs of potential risk to their financial stability, this reform can be seen as a step towards greater fiscal devolution.” 

You can read the full consultation on the CIPFA website


For further information please contact the CIPFA press office on 020 7543 5703 or email


CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. CIPFA shows the way in public finance globally, standing up for sound public financial management and good governance around the world as the leading commentator on managing and accounting for public money. 

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