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<p>The government’s aim is to increase local government’s retention of business rates
from 50 per cent to 75 per cent in 2021-22. However, we recognise that redistribution
of business rates between local authorities will continue to be necessary where locally
retained business rates do not meet their needs.</p><p>We have listened to calls for
a simpler, up-to-date, evidence-based funding formula and we will aim to deliver this
alongside an increase in business rates retention. We are working closely with local
government representatives to consider the drivers of local authorities’ costs, the
resources available to them to fund services, and how to account for these in a way
that draws a more transparent and understandable link between local circumstances
and local authority funding.</p>
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