Preston and Chorley hospitals fail in attempt to get business rates bill slashed

A bid by the trust which runs the Royal Preston and Chorley and South Ribble Hospital to have its business rates slashed has failed.

By Paul Faulkner
Thursday, 19th December 2019, 5:52 pm
Updated Thursday, 19th December 2019, 5:53 pm

Lancashire Teaching Hospitals (LTH) was one of 16 NHS organisations to launch a joint legal challenge last year to the way in which the tax is levied on them.

The trusts had claimed that they should be eligible for “mandatory charitable relief” – which would have seen the amount they had to pay cut by up to 80 percent.

If the attempt had been successful, it would have been backdated for a decade – leaving Preston City Council having to repay £15m and Chorley Council with a bill of £1.5m.

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Lancashire Teaching Hospitals was one of 16 trusts which challenged how much they pay in business rates

The two Central Lancashire authorities – which were amongst 45 councils that could have been affected had the High Court decision gone against them – would also have faced ongoing reductions in their annual business rates income running into the hundreds of thousands of pounds.

LTH had an operational deficit of £32.2m at the end of October , according to papers presented to a board meeting earlier this month.

A spokesperson for Preston City Council said: “Business rates is an important source of income for the Council and its precepting authorities, and any shortfall of this magnitude would have implications on the local services provided for residents in the area.”

Chorley Council and Lancashire Teaching Hospitals were both approached for comment.

A spokesperson for the Local Government Association (LGA) said: “Today’s ruling is good news for councils and the local services our communities rely on across the country.

“Councils, supported by the LGA, are pleased this common-sense decision will not see them having to pay NHS Trusts and Foundation Trusts £1.5 billion in unfounded backdated business rates relief, nor see them eligible for 80 percent relief going forward.”