Issue - meetings

Prior to setting the Council Tax for 2021/22 the City Council was required to estimate whether there was to be a surplus or deficit on both the Council Tax and Business Rates elements of the Collection Fund for the current financial year.

At the Executive meeting on 4 January 2021 the Council declared a deficit on Council Tax of £1,105,616 for the financial year 2020/21, of which its share was £165,680. The Council would declare a deficit on the Business Rates Collection Fund of £30,070,943 for 2020/21 subject to the confirmation of the Business Rates base by 31 January 2021, of which its share was £12,028,378. 

Whilst this was a significant deficit, £26,397,692, of which the Council’s share was £10,559,077, of the deficit was offset by Government grants received to compensate local authorities in respect of the expanded retail rate reliefs awarded to business in response to the Covid-19 pandemic. The remaining £3,673,251 deficit, of which the Council’s share was £1,469,301, had arisen primarily due to an increase in provision for business rates appeals and an increase in empty property reliefs, both of which had been adversely affected by the Covid-19 pandemic.  

In response to these significant financial pressures that Councils were facing arising from the impacts of Covid-19 on local taxes as part of the Spending Review 2020, the Government announced a compensation scheme for irrecoverable local tax losses. Based on the principles of the consultative policy paper on this scheme, and the estimated deficit, the Council would receive compensation of £1,082,564 towards its remaining share of the business rates deficit, leaving a balance of approximately £386,737 to be resourced by the Council through the General Fund.