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Business confidence in local councils low, research suggests

Small firms are finding it difficult to get enthused by the Local Government Finance Act because of doubts surrounding the benefits supplementary business rate redistribution will provide, research has suggested.

Members of the Forum of Private Businesses were asked 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. Any money spent would be done so only after consultation between councils and local businesses.

The Forum’s research revealed that just 22 per cent of those polled felt there would be a positive impact on the local economy, while 56 per cent felt the changes would have little to no impact on their businesses. Furthermore, less than 20 per cent of the panel members were confident their local council could work with businesses to improve the local economy.

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“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.

“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.

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

Three-quarters of firms polled said they would rather not see any supplementary business rates in their area, regardless of cost.

Jackman concluded: “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.

“This research really raises the question whether businesses even want this at all.”

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