MANAGEMENT {FINANCE AND FUNDING}
What changes are being made to the payment process of schools’ business rates? National non-domestic rates, more commonly known as business rates, are a tax charged on the occupation of most nondomestic properties, including schools
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chools’ business rates costs are currently funded through the National Funding Formula (NFF), which the government uses to calculate core funding allocations to mainstream, state-funded schools in England. From 10 March 2021 to 5 May 2021, the Department for Education (DfE) consulted on a proposal to centralise the payment of business rates for state-funded schools from 2022/23 onwards. Essentially, this will involve the Education and Skills Funding Agency (ESFA) paying billing authorities directly on behalf of state-funded schools from April 2022. This will replace the existing system in which schools, typically, receive funding in respect of their rates bill in their annual budgets, via the NFF, and pay their
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November 2021
business rates to billing authorities themselves. This change will reduce administrative burdens for schools and simplify the existing process. The government has already confirmed that it will go ahead with the proposals to centralise the business rates payment system for schools from April 2022 alongside the publication of the schools notional NFF allocations for 2022/23 in July 2021.
ABOUT THE CONSULTATION The consultation included two proposals to support the centralisation of business rates; the first was for ESFA to pay schools’ business rates directly to billing authorities on behalf of schools in June each year, and the second was for ESFA to make a single reconciliation payment to billing authorities in March each
