How to reward local authorities for achieving growth in business rates and help them share and manage risk are key questions in a consultation marking the latest stage in reforming the local government finance system to allow authorities to retain 100% of local business rates.

In October 2015, the government committed by the end of the current parliament in 2020 to enable local authorities to retain all taxes raised locally, including 100% of locally-collected business rates.

This fundamental reform of local government financing would give the councils control of an additional £13bn revenue from business rates. In order to ensure the reforms were fiscally neutral, however, this would have to be balanced by phasing out some Whitehall grants and devolving some responsibilities from Whitehall to the councils.

As regards the reward for growth in business rates, ‘100% business rates retention: further consultation on the design of the reformed system’  looks at the opportunities available for authorities working together as part of a business rates pool.

It also seeks views on how the system can best help authorities to manage and share risk, including in those parts of the country where there is more than one tier of local government.

The consultation also confirms that government will shortly publish information about an invitation for all councils to apply to participate in piloting aspects of 100% Business Rates Retention from April 2018.