Business Rate Supplements Bill

The short answer to the hon. Gentleman’s question is that the extent to which business rate supplements are introduced will depend on the decisions and discussions—and, in some cases, the votes—of businesses in local authority areas. The Bill clearly sets out that any project funded by a business rate supplement must be additional to the authority’s current spending plans, and that it would not have happened if the supplement had not been in place. We will support and strengthen this with guidance, on which we will consult, but the Bill also makes it clear that the funds raised by the business rate supplement may not be diverted to plug spending gaps in local authority budgets. In other words, any revenues raised from the business rate supplement must be additional and cannot be spent on the kind of services for which a local authority has other statutory responsibilities. In addition, there is the safeguard that the funds raised by the business rate supplement must support projects designed to improve the economic development of an area. These might include infrastructure projects, the promotion of an area or perhaps a strong skills programme. I also want to make it clear what the money cannot be spent on, as I tried to do a moment ago. It has to be additional, and it cannot be spent on mainstream services such as housing, health, social care or education, which a local authority has an existing obligation to provide. I intend to set this out in more detail, in guidance or regulations, to make it clear. I also plan to introduce drafts of the guidance or regulations for formal consultation alongside scrutiny of the Bill during the Committee proceedings in this House.