Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Housing, Communities and Local Government, pursuant to the Answer of 5 February 2026 to Question 109273 on Licensed Premises: Business Rates, what estimate he has made of the cost of the compensation in 2026-27; and whether it will be allocated as part of the final Local Government Finance Settlement.

The department will publish the cost of compensating local authorities for the relief as part of the 2026-27 NNDR3 outturn data reconciliation, following the end of the 2026-27 financial year.

Local authorities will be fully compensated for the loss of income associated with granting the pubs and live music venues relief they award against the main business rates liability.

The Greater London Authority is not reimbursed for the lost revenue arising from government funded discretionary reliefs awarded under section 47 of the Local Government Finance Act 1988, such as the 15% Pubs and Live Music Venues Relief, when this relief is applied to a Business Rates Supplement (BRS). While these reliefs are applied on a parallel basis to reliefs on Non-Domestic Rates, the Greater London Authority bears the entire cost in respect of the resulting reduction in BRS revenues.

Business Improvement District (BID) levies are established under separate legislation from the business rates system and are payable in addition to non-domestic rates.

Business rates reliefs granted under section 47 of the Local Government Finance Act 1988, such as the Pubs and Live Music Venues Relief, apply only to a ratepayer’s liability for non-domestic rates and do not apply to BID levies. These reliefs therefore reduce a ratepayer’s liability to non-domestic rates only. Individual BIDs may allow for a reduction in a levy in line with their own schemes but this is a matter for individual BIDs to determine.

Where a billing authority grants discretionary business rates reliefs (including reliefs under section 47 of the 1988 Act), the authority is compensated for the resulting loss of non-domestic rates income via grant paid under section 31 of the Local Government Act 2003. This compensation relates solely to reductions in non-domestic rates liability and does not extend to BID levies. Accordingly, there is no provision for central reimbursement in respect of BID levy amounts.