More than half of councils say businesses are struggling to meet their rates bills because of the economic downturn. A snapshot survey published by the Local Government Association, also shows that one in three councils has reported an increase in the uptake of Small Business Rate Relief.

Councils collect business rates but the money is then sent to the Government for redistribution to local authorities. Now, in the light of the survey findings, the LGA is putting forward a four-point plan to encourage councils to support small businesses, including buying goods and services locally wherever they can.

Other suggestions to the LGA’s more than 400 member authorities include encouraging businesses to contact their local council to ensure they claim small business rate relief. The Association estimates that in 2006 less than half of small businesses took up relief totalling 400 million pounds. The LGA is also calling on the Government to give councils the power to use their discretion to give rates breaks to small businesses in trouble. Finally it wants local authorities to prioritise improvements, such as street cleaning, CCTV and no drinking zones in shopping areas.

Margaret Eaton, Chairman of the LGA, said the research showed that firms were beginning to feel the impact of the downturn. “It is worrying that the majority of councils are saying that businesses are struggling to pay their rates,” she said and added, “Town halls will do all they can to keep small businesses going through the tough financial times ahead. Independent retailers such as newsagents, hairdressers and corner shops are the glue that help to bind together local areas and keep the local economy going strong.”