Agenda item

To provide members with an update on current issues in relation to non-domestic rates.

Decision

That the report be noted.

None.

It was noted that the previous report to this committee provided updates on the following aspects of non-domestic rates:

·         business rate pilot;

·         spring budget;

·         discretionary relief policy;

·         Local Government Finance Bill 2017.

Updates on the following schemes were noted in response to the spring budget in 2017:

Business rate pilot – 100% business rates retention in 2018/19

The pilot was currently expected to run for one year only, with the key requirements being to promote financial sustainability and coherent decision making across functional economic areas and use some of the additional retained income invested to encourage further growth. The pilot would operate in a similar way to the existing 50% business rate retention system and pooling arrangements, but with the following key differences:

·         the pilot would operate with a zero levy, therefore retaining locally a greater proportion of any business rates growth;

·         the safety net would be at pilot level, but would be set at 97% of baseline rather than the current 92.5% for individual councils/business rate pools;

·         councils would forgo Rural Services Grant with revised tariffs and top ups being cancelled;

·         it had been proposed that any gains were split on the same basis as the existing business rates pool.

A large proportion of local authorities had expressed an interest in the pilot, so it was likely that the process would become competitive. A decision was expected in December as to which bids had been successful, including the Lincolnshire authorities’ bid following confirmation that it had been received.

Supporting small business relief scheme

Billing authorities were expected to use their discretionary powers under Section 47 of the Local Government Finance Act 1988 to grant this relief through a Section 31 grant from Government. The number of hereditaments that had been identified and had benefited from the scheme at 1 April 2017 for each of the three authorities was as follows:

-       City of Lincoln – 6 out of 7 identified had responded with the total award being £6,060;

-       North Kesteven – 20 out of 24 identified had responded with the total award being £26,821;

-       West Lindsey – 10 out of 25 identified had responded with the total award being £11,517.

Support for pubs scheme

Officers had identified those ratepayers that may be entitled to relief and sent them application forms. By completing the application form, ratepayers could declare whether any relief awarded would not exceed the state aid limit. The number of application forms returned at 1 November 2017 were as follows:

-       City of Lincoln – 25 out of 70 identified had responded with a total award of £25,000;

-       North Kesteven – 35 out of 41 identified had responded with a total award of £32,906;

-       West Lindsey – 37 out of 60 identified had responded with a total award of £28,957.

Discretionary relief scheme

As with the support for pubs scheme. officers had identified those ratepayers that may be entitled to relief and sent them application forms in order that they could declared whether any relief awarded would not exceed the state aid limit. The number of applications returned as at 1 November 2017 were as follows:

-       City of Lincoln – 114 out of 675 identified had responded with a total award of £31,639;

-       North Kesteven – 69 out of 540 identified had responded with a total award of £23,025.

It was noted that reminder forms would be sent to those who had not yet returned their forms.

West Lindsey had not been included in the above breakdown as, at the time of writing the report, the discretionary relief scheme had not gone through West Lindsey District Council’s democratic decision-making processes.

Autumn Statement 2017

The Head of Shared Revenues and Benefits provided a brief overview of the Chancellor’s Autumn Statement 2017. The following items relevant to the Shared Service were included in the Statement:

·         the pricing index for business rates would switch from the Retail Price Index to the Consumer Price Index with the difference being reimbursed through Governments funding but there would be a future impact;

·         legislation was to be put in place to address ‘staircase tax’ for those commercial premises that shared a building;

·         a £1,000 discount for public houses per year would continue;

·         the pilot schemes for 100% non-domestic rate retention was referred to in the statement. Successful bids from London Authorities had already been announced.

Officers were currently awaiting further detail from Government on the announcements made as part of the Autumn Statement.