More than 133,000 companies are still waiting for an appeal over their business rates valuation from 2010 to be resolved, according to new data.
The Local Government Association (LGA) said that more than one million challenges to business rates bills have been received over the past eight years, with 133,060 of those appeals yet to be ruled on.
Councils do not set business rates or rule on challenges by businesses making appeals.
However, the LGA said the result of appeals is that councils must put money aside from delivering the services that local taxpayers pay for and expect until appeals are decided.
The association added that councils have been forced to divert £2.5 billion away from stretched local services over the past five years to cover the risk of business rates appeals, as they have to fund half the cost of any backdated refunds.
The group is now urging the government to take the financial risk from business rates appeals away from local government ahead of a parliamentary debate on business rates slated for today.
The LGA said government plans to allow councils to keep more of the business rates they collect makes it “even more imperative” for reform of the system.
It highlighted the need to protect councils from the “growing and costly risk” of appeals, as they may become liable to pay back more of the cost of any backdated refunds.
“Ongoing delays in tackling business rate appeals from 2010 are heaping further financial uncertainty and pressure on our local services at a time when every penny counts to give councils the best chance of protecting services over the next few years,” LGA resources board vice chairman John Fuller said.
“It is right that a business is able to challenge their valuation if they genuinely believe it to be incorrect.
“Despite not setting business rates or ruling on appeals, councils are having to take billions of pounds away from already stretched local services, such as adult social care, protecting children and supporting businesses and boosting local growth, to cover the financial risk and uncertainty arising from this backlog of appeals. This is completely unfair.
“As we move towards a system where councils will keep more of the business rates they collect locally, communities need to be protected from the shifting of resources to address the risk of business rates appeals.”