If you run a business in the UK right now, it can feel like this from the local side:
“I’m paying more in business rates than ever… and getting less and less back.”
Bins collected less often. Potholes everywhere. Youth services cut. Planning taking forever. And in the background, you hear more and more stories about councils being “on the brink”.
This isn’t just noise.
Local authorities are under serious financial pressure – and when councils are squeezed, local businesses feel it, both directly and indirectly.
Let’s unpack what that actually means for you as a business owner, and how you can protect yourself instead of being quietly dragged along for the ride.
What’s going on with councils?
In simple terms:
- Costs are up: social care, children’s services (especially SEND), housing and homelessness, staff, energy.
- Central government funding hasn’t kept pace.
- Some councils have made… let’s say “ambitious” investments that haven’t gone well.
- A growing number have basically held their hands up and said, “We can’t balance the books.”
When a council’s finances are under strain, they only have a few levers they can pull:
- Cut or reduce services
- Delay maintenance and investment
- Push up local charges and council tax
- Squeeze harder on business rates and enforcement
You don’t get to vote on most of that. You just see the impact in your costs and your operating environment.
Why business owners should care (even if you’re not on the council’s radar)
It’s easy to think:
“This is a political issue – nothing to do with my business.”
But local authority pressure shows up in very practical ways for you:
- How much you pay in business rates, and what (if anything) you get back.
- How quickly planning and licensing decisions get made.
- The quality of roads, parking, public transport and local infrastructure your customers and staff rely on.
- The availability of business support, grants and regeneration projects.
And if you’ve got children – especially if you’re dealing with SEND – a struggling council can have a direct impact on your home life, which then flows into your capacity to run your business.
So no, you can’t fix council finances. But you can and should factor this into your own planning and decisions.
The direct hit: business rates and local charges
Business rates are one of the most obvious pain points.
You might see:
- Rateable values going up after revaluations.
- Fewer or more tightly policed reliefs and discounts.
- Higher or new local charges – parking, permits, waste, licensing, etc.
From the council’s perspective:
- It’s a relatively easy way to demonstrate they’re “raising revenue locally”.
- Businesses don’t vote (in the same way residents do), so there’s less political heat.
From your perspective:
- It’s a fixed cost that has to be paid, often before you’ve turned a pound of profit.
That’s why it’s so important to actively manage your business rates position, not just accept whatever drops through the letterbox.
The indirect hit: services getting thinner
The next layer is the stuff that doesn’t show up as a direct bill, but absolutely affects how you trade.
You might notice:
- Worse roads and more congestion – delivery delays, extra wear on vehicles, staff turning up late.
- Less town-centre investment – scruffier high streets, fewer events, less footfall.
- Weaker public transport – harder for staff to get to you, especially younger and lower-paid team members.
- Longer planning and licensing times – your refit, extension or new premises gets stuck in a backlog.
None of these come with a simple line on your P&L.
But they all show up as:
- Lost time
- Extra hassle
- Lower trade
- Slower growth
In a tight-margin world, that matters.
Hidden risk: if your council actually tips over
In extreme cases, councils issue a “Section 114 notice” – essentially saying they can’t balance the books.
That doesn’t mean services stop overnight, but it usually means:
- Emergency cuts to anything not legally required.
- Big pressure to hike up any charges they can justify.
- Investment and regeneration projects getting shelved.
If you’re based in, or moving into, an area flirting with this kind of crisis, you need to understand:
- What that might mean for your costs.
- What that might do to the local economy and footfall.
- Whether you’re happy to tie your business to that environment for the next 5–10 years.
Location risk is real. It’s not just about rent and nice views.
How this should shape your decisions as a business owner
You can’t control the council’s books, but you can control how exposed you are.
Here’s what I’d be doing if I were you.
1. Take your business rates bill seriously (don’t just file it)
Too many owners treat business rates as:
“Just another unavoidable bill.”
Yes, the system is clunky and opaque. But there are things you can look at:
- Has your rateable value increased disproportionately compared with similar properties nearby?
- Have there been changes to your property (split, partial use, floor space) that aren’t reflected properly?
- Are you certain you’re getting all the reliefs you’re entitled to – small business relief, rural relief, charitable use, etc.?
If something smells off, it’s worth getting a proper check done. A successful challenge or correction can save you thousands every year.
2. Factor local authority risk into your location strategy
When you’re thinking about:
- Opening a new site
- Moving premises
- Taking on a long lease
…don’t just look at the building.
Look at:
- The council’s general financial health (are they constantly in the news for budget crises?).
- The direction of local business rates and charges.
- The quality of local infrastructure and town-centre support.
- How supportive they are of business and regeneration.
Sometimes a slightly higher rent in a well-run area is cheaper overall than a bargain unit in a struggling town that’s quietly taxing and neglecting its way into decline.
3. Get involved, don’t just complain
I know, your diary is already full. But local councils do listen more to organised business voices than lone complaints.
You can:
- Join or work with your local chamber of commerce, business improvement district (BID) or trade body.
- Engage in consultations on business rates, parking, town-centre plans.
- Work with other local businesses to present a united view on things that affect you all.
You’re not going to fix everything. But occasionally you can:
- Stop something daft being implemented.
- Nudge resources towards areas that help trade.
- Make sure the business voice is at least heard.
4. Budget for more friction, not less
In your financial planning, assume:
- Business rates and local charges are more likely to go up than down.
- Planning and licensing will take longer than you’d希望.
- You’ll need to spend more of your own time or staff time on navigating local red tape.
Build that into:
- Your cashflow forecasts
- Your project timelines
- Your pricing and margin expectations
Then, if things go better than expected, great – you’re ahead.
5. Focus on what you can control inside the business
While the council is doing whatever it’s doing, your job is to build a business that’s:
- Resilient – strong margins, good cash buffers.
- Attractive to customers – so a scruffy high street doesn’t kill you.
- Efficient – so you can absorb cost increases better than your competitors.
That means doubling down on:
- Margin management
- Customer experience
- Systems and processes
- Smart tax planning and investment decisions
You can’t fix the local authority’s balance sheet, but you can make sure yours is robust enough to live with whatever they decide next.
How we can help at MDH
This is where the numbers and the “real world” collide – and where a decent accountant should be doing a lot more than just filing your returns.
We can help you:
- Review your business rates position
- Sense-check your current rateable value.
- Make sure you’re claiming all available reliefs.
- Flag whether it’s worth exploring a challenge with a specialist.
- Build local-cost reality into your planning
- Factor business rates, local charges and likely increases into your 3–5 year forecasts.
- Model what happens if costs rise faster than you’d like – and how to protect your margin.
- Support location and expansion decisions
- Compare the total cost picture of different locations (not just the rent).
- Help you decide whether that “cheap” unit is really cheaper once business rates and local factors are included.
If you’d like to stop feeling like local decisions are just “something that happens to you” – and start building them into a proper plan – ask us about a Business Rates & Location Review.
We’ll sit down with you, look at your current and future premises, and help you make decisions that work for your numbers, not just the council’s.
