SOUTH Gloucestershire is one of 27 local councils in England to have been paid a total of £36m more than they were entitled to by the government.

The payments have been attributed to an "historic error" made by the government.

But local government secretary Sajid Javid has said the councils will not have to pay the money back.

It was discovered by civil servants as they started preparations for the extension of the business rates pilots programme, which permits local authorities to keep 100 per cent of locally-collected business rates, for 2018-19.

A spokesperson for South Gloucestershire Council said: “South Gloucestershire Council has actively engaged with Government in the implementation of the West of England business rates pilot, including the creation of the West of England Combined Authority with the intention to retain locally generated funding for local needs.

"We have budgeted that all our gains from the pilot scheme will be transferred to our Financial Risks Reserve for the next three years, so we will be using the money to assist in balancing our budget across the next three financial years."

Local government minister Rishi Sunak said: "This error should not have happened.

"This is why we believe it would be unfair to ask local authorities to repay the money from 2017-18.

"To ensure this doesn’t happen again, an externally-led review of the system will be undertaken.

“Next year the business rates retention pilots will see over £900 million extra funding stay in communities to be spent on local priorities.”