Business Rates Reform Looms as Government Reshapes Local Finance, June 15

The UK government has appointed a new minister to the Ministry of Housing, Communities and Local Government (MHCLG) as pressure mounts on business rates policy and local authority funding. The appointment comes as the government manages broader regulatory changes affecting businesses across England. Local councils depend heavily on business rates revenue, making any policy shift significant for their budgets and service delivery.

New Leadership at MHCLG Signals Policy Direction

A new peer has been appointed to the MHCLG following his elevation to the House of Lords last year. He brings experience from establishing and running a housing association and served as chair of English Heritage from 2023 to 2025. The appointment reflects the government’s emphasis on housing policy and local government reform during a period of regulatory restructuring.

Business Rates Under Scrutiny Amid Regulatory Change

Business rates remain a key revenue source for local authorities in England, funding services from fire and rescue to housing and planning. The Local Government Association continues to track finance and business rates issues as councils navigate budget pressures. The new ministerial appointment suggests the government is preparing to address local government financing challenges.

Regulatory Powers Set to Expire This Month

The government holds significant powers to reform domestic law through secondary legislation, powers that are set to expire later in June 2026. These powers, granted under the Retained EU Law Act 2023, allow ministers to amend or revoke existing rules affecting business operations. The expiration creates a deadline for any planned regulatory changes affecting business costs and compliance.

Workers’ Rights Costs Add Pressure on Businesses

Employment minister Kate Dearden has defended the government’s Employment Rights Act, which became law last year with provisions rolling out this year and next. Business groups warn the changes, including enhanced sick pay and dismissal rights, will impose significant additional costs. The government is now consulting on regulations to restrict zero-hours contracts, a move retailers fear could reduce job flexibility.

Final Thoughts

Business rates and local authority funding face ongoing scrutiny as the government reshapes regulatory policy. With ministerial changes and expiring powers this month, businesses should monitor announcements on rates reform and employment compliance costs.

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