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Against a difficult national financial backdrop, I am pleased to say that Wokingham Borough Council has delivered a balanced budget this year — something that has not come easily for councils across the country. Achieving this required significant effort and careful financial management over the past four years. I would like to place on record my thanks to our Chief Financial Officer and his team for the remarkable work they have done to help make this possible.
As Executive Member for Business, I also want to speak candidly about an issue that affects both our council finances and our local economy: business rates.
Business rates were originally introduced with a clear and principled purpose. They were designed as a locally raised tax on commercial property that would fund the essential services that make business activity possible. Roads, street lighting, waste collection, planning, environmental health and public safety are all services that help businesses operate and thrive.
The principle behind the system was straightforward. Businesses contribute to the local infrastructure and services that support them, and local authorities use that revenue to maintain and improve their communities.
Importantly, the system was also intended to create a direct link between economic growth and local benefit. If a council supported development, attracted investment and nurtured thriving high streets or business parks, it would see an increase in business rate revenue. Local success would bring local reward.
Today, however, the system works rather differently.
Although business rates are set by the Valuation Office Agency, not the council, they are still collected locally but most of the revenue is redistributed through a national system. Tariffs, top-ups, levies, safety nets and periodic resets all form part of a complex framework that reallocates income across the country.
In Wokingham Borough Council, we will collect around £100 million in business rates this year. Of that total, a staggering £94 million will be transferred elsewhere through the national redistribution system.
It is important to acknowledge that redistribution serves a legitimate purpose. Not every area has the same ability to generate business rate income, and public services must be funded fairly across the country. That principle of fairness is one we fully support.
However, the practical effect is that the link between local growth and local reward is far weaker than many people realise. Councils do not simply keep what they raise. Income is pooled and redistributed, while local authorities still carry significant financial risk.
Appeals against property valuations, economic downturns, or structural changes to sectors such as retail and office space can all reduce business rate income — yet the demand for local services rarely falls at the same time.
This creates a challenging environment for councils like ours that are ambitious about supporting enterprise, investing in infrastructure and enabling sustainable growth.
We want to back our business community. We want to see vibrant town centres, thriving business parks and expanding innovation clusters. Yet our ability to benefit directly from that growth is constrained by a nationally determined framework that is periodically reset.
The challenge we must continue to address nationally is how to maintain fairness while restoring clearer incentives for local growth. How do we ensure councils are genuinely empowered to shape their economic destiny? And how do we provide the stability businesses need to plan for the long term?
Business rates sit at the intersection of economic development and public service delivery. They influence investment decisions, council budgets and, ultimately, the services available to residents.
At Wokingham Borough Council, our priority is to champion a system that supports growth, rewards ambition and maintains fairness — ensuring our business community can succeed and our borough can continue to thrive.
And despite the challenges we face, I am proud to say that this administration has achieved something many thought unlikely: a balanced budget for the year ahead.
Councillor Mark Ashwell
