Nearly £2m could be lost to cash-strapped Swindon Borough Council this year because of empty shops and business premises.

The loss is the money the authority won't receive in business rates from empty units.

When companies leave a premises, either because they close down or move elsewhere, landlords can apply for three months business rate relief, where they don’t have to pay the business equivalent of council tax.

This year, the BBC data unit calculates that Swindon Borough Council will not receive £1.86m of what it could collect because relief has been granted to 601 properties. That represents a loss of 1.47per cent of a notional total of £127m.

A council spokesman said: “The legislation and what rates are payable on properties is set by parliament. The retail sector, in particular, is having a difficult time across the country and we are aware the government intends to look at the balance of taxation on shops compared to internet providers.

“It is worth pointing out that Swindon’s high street vacancies are in line with the national average and we do have an unusually high number of retail units compared to towns of a similar size elsewhere in the country. This is due to the hugely successful McArthur Glen Designer Outlet and other retail parks throughout the borough.

He added: “In the meantime, our business and economy team is working hard to attract companies to the town, with a particular focus on sectors in which Swindon has a competitive advantage and where industry growth is forecast such as digital-technology, advanced manufacturing, pharmaceuticals and finance and professional services.

Despite the significant sum unavailable to Swindon, the borough is far from the worst in the country, and it is reducing the amount it loses out on every year. In 2015-16 a possible £5m, four per cent of the total, of its possible business rates potential went begging.

That figure has dropped year on year and was £3.7m last year.

With grants from central government to local authorities reducing every year, councils like Swindon’s are becoming more reliant on funding from council tax and business rates. Town halls are being allowed to keep more of the business rates they collect, and the Local Government Association is urging reform of the system.

Richard Watts, chairman of the LGA’s resources board, said: “Business rates are an extremely important source of income for local government and with an overall funding gap of £8 billion by 2025, the Government must commit to moving forward with vital reforms, which include addressing business rates avoidance and the impact of reliefs, such as empty premises relief.”

A spokesman for the Treasury said: “Empty property relief strikes a balance between incentivising property owners to put vacant properties to use, while not penalising those who lose a tenant at short notice.

“Whilst the rate of business rates collection varies between individual authorities, the local government finance system has been designed so that business rates income is redistributed across the country according to the needs of local areas.

“We will announce further details of the business rates review in due course.”