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Councils in plea for help after tribunal ruling on GP surgeries and business rates

Councils in Worcestershire have called on ministers to hold an urgent review amid claims that a valuation tribunal ruling earlier this year on the business rates payable for purpose built GP surgeries has cost local authorities millions of pounds.

A letter sent by Worcestershire County Council and all the area’s district councils said the tribunal ruling* meant in future that GPs surgeries would pay significantly less.

According to Wychavon District Council, a number of GP surgeries had made successful appeals to the Valuation Office against the value given to their property in 2005 and 2010.

The council estimated that surgeries in its area alone would receive a £3.5m refund and £600,000 a year on an ongoing basis from this financial year. 

Wychavon, the county council and Hereford & Worcester Fire Authority are expected to be responsible for half of the total losses.

The district said it would have to pay the majority share which will total £1.4m and £250,000 a year ongoing.

“It is understood the money related to the historic payments will be retained by NHS England and the future money by local Clinical Commissioning Groups,” it added.

The letter from the Worcestershire councils calls for government support “as prior to 2013 business rates were collected centrally by the Government and redistributed according to a set formula as a grant”.

It is only since 2013 Worcestershire councils have been able to retain half of the business rates they collect locally.

Cllr Lynne Duffy, portfolio holder for resources on Wychavon District Council, said: “We know a number of other authorities have been similarly affected and expect the issue to eventually have an impact across the country. We are raising the issue and the unfairness of the situation with MPs, the Local Government Association and district council representative bodies.

“This decision will place even more strain on our finances. The one off refund will have to come from our cash reserves and the ongoing loss will have to be made up through further efficiency savings, carrying out more income generating work for other councils and growing the Business Rates base by providing land for new and expanding businesses.

“We’re hopeful the Government will listen carefully to our concerns on this matter. I also sincerely hope that any money retained by the NHS will be spent for the benefit of local patients.”

* The ruling in question is understood to be Gallagher (VO) v Dr Read & Partners & Anor [2015] UKUT 1 (LC).

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