Joint presentation by LGA and Department for Communities and Local Government.
Minutes:
Nicola Morton (Head of Local Government Finance) and Sophie Broadfield (Deputy Director, DCLG) provided a presentation which outlined the main proposals for moving to 100% business rates retention and the joint working between the LGA and DCLG thus far. Members were invited to share ideas regarding system design, what should be taken into account in needs and distribution of resources and which services should transfer to local government.
In the discussions that followed, Members made a number of comments, including:
· That the system must balance the need for equalisation with incentivising growth, whilst avoiding creating perverse incentives.
· Questions were asked regarding the criteria for service transfer and how these services would relate to the underlying driver that local government be self-sufficient.
· Serious concerns were expressed that full business rate retention represented a greater transfer of risk of loss of funding, particularly in relation to the creation of new burdens and increasing demand on services such as adult social care.
· In discussing the Government’s commitment to a review of the needs assessment, Members highlighted the importance that it reflect the view of all councils within two tier areas.
· The appeals system was highlighted as a critical area that needed to be addressed, particularly around historic appeals and the risks associated with large claims. Suggestions included, that the appeals system be within local government’s control and that the Government prohibit ‘cost shunting’ between public sector bodies. Sophie Broadfield stated that it was DCLG’s view that should applications for charitable relief by NHS Trusts be successful, the Department for Health should reimburse local government.
· In relation to reference to a specific case relating to Corby Borough Council, Sophie Broadfield resolved to refer the issue to the Treasury.
· The risk of fragmentation of the funding system was highlighted, should future Government’s seek to fund specific services or new burdens outside of the business rates system.
Recommendation
The Resources Portfolio noted the presentation and asked that their views inform the joint working between the LGA and Department for Communities & Local Government.
Actions
Circulate to Portfolio Members: (a) the latest update on legal advice regarding NHS Trusts Business rates appeal claim; and (b) the Government’s consultation on frequency of revaluations.