PM: 'halt rates for riot hit properties'

Author: James Illman, LGC - Aug 15, 2011

Prime minister David Cameron has announced plans to stop council tax and business rates payments for properties seriously damaged by the riots, as affected councils brace themselves for potentially substantial bills.

The cost burden on local government of such a move is at present unclear but a £30m support package will be available for affected councils.

The Department for Communities & Local Government (DCLG) outlined plans for a new recovery scheme of up to £10m, while an additional £20m will be on offer via a new high street support scheme.

Mr Cameron made the announcement to the House of Commons as part of a raft of measures following a chaotic few days across the UK.

He said: “To minimise the costs facing businesses, the government will enable local authorities to grant business rate relief, by funding at least three quarters of their costs.

“We will defer tax payments for businesses in greatest need.

“And for houses and businesses that have been the most badly damaged we have instructed the valuation office to immediately stop liability for council tax and business rates.”

DCLG said local authorities will be able to use the £20m pot to fund the proportion of hardship relief from business rates that would otherwise fall to them and to get business back on their feet.

A quarter of the cost of hardship rate relief is normally borne by local authorities and three quarters by central government.

Councils will also be able to apply for cash from the long-standing Bellwin scheme, which has been largely used to cover flood damage in recent years, but this fund only provides assistance if costs are in excess of £1m.

Communities secretary Eric Pickles said DCLG would foot the bill for “the immediate costs of re-housing those made homeless by these disturbances”.

“This can be done under established homelessness funding processes,” he added, “In addition, any individual, homeowner or small business that has suffered damage to or loss of their buildings or property as a result of rioting, can seek compensation under the Riot Damages Act.

Sir Merrick Cockell (Con), Chairman of the Local Government Association, welcomed the funding for councils.

He said: “The announcement of extra emergency funds will help local authorities and businesses speed up the process of rebuilding shattered neighbourhoods and will assist in re-housing those who have had their homes and possessions destroyed by mindless criminals.

“For neighbourhoods to recover it is vitally important that local businesses affected by the riots are nurtured and encouraged to re-open. Business rate relief will help.

“It is also important that those businesses and residents whose insurance does not cover these mindless acts of criminality are able to access compensation in a timely manner. The process of applying directly for riot compensation needs to be simple and fair, and the payouts swift.

“Local authorities continue to assist police in bringing perpetrators to justice, with council CCTV teams helping to collect evidence to identify offenders. We are aware that some councils are exploring introducing additional deterrents, such as removing council housing from those proven to be involved in the riots. The intention to further clarify powers in this area is helpful.”

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