By Daniel Hunter

Small firms have little enthusiasm for the Local Government Finance Act, with many doubtful the redistribution of monies from supplementary Business Rates will actually benefit them.

That’s the findings of research carried out by the Forum of Private Business which asked members for their thoughts on how the new Act could benefit them.

The Act includes provision for an extra levy payable on top of standard business rates which would then be spent on local projects within a particular local authority area. Any money spent would be after consultation by councils with local businesses.

But the Forum’s research showed well over half of members polled, at 56%, felt the changes would have minimal or no impact on their businesses, while 6% felt that they would end up paying for something that did not benefit them. Just 22% felt there would be a positive impact on the local economy.

Further, just under 20% of panel members were confident their local council could work with local businesses to improve the local economy, with 33% sceptical and 43% very sceptical.

“The overriding message here is that small businesses have little confidence in their local councils to spend their money wisely, and with added benefit to their business,” said the Forum’s Head of Policy, Alex Jackman.

“Some respondents in our research said their councils already focussed more on town centres, others that the primary focus was on larger businesses. The lack of long term and other business-focussed spending on things such as road projects or planning support were other reasons why businesses were critical of their council.

“Fundamentally, businesses don’t believe councils work well with small businesses, or are competent enough to come up with schemes that will really lead to economic growth.

“Some businesses felt that council officers were too unaccountable for the damage that they did to local businesses and, particularly in retail there has been a focus on the creation of “new jobs” through out of town centres without any focus on the greater number of jobs lost or endangered on the high street.

“The bottom line is that small businesses are concerned with the way councils spend their money, and with good reason.”

In total 75% of firms polled said they would rather not see any supplementary business rates in their area even if the cost was small — the average rise is thought to be around 0.4%. Not one business was supportive of any levy over 5%.

“In a slight majority of cases the belief is that the Local Government Finance Act will have only a marginal impact, or even a negative one, again based on the experience of councils," Added Jackman.

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