Minutes:
Aivaras Statkevicius (Adviser) introduced the report which provided an update on the progress of the Government’s work on business rates retention reform, and in particular the emerging responses to the summer consultations and the progress of the Fair Funding Review.
Members noted that the Local Government Finance Bill had been introduced before Parliament, and included general provisions for detailed system design. The draft legislation confirmed that the multiplier could be increased in a single go rather than by tranches, and although there was no mention of a veto by Local Enterprise Partnerships (LEPs) there was still a requirement to consult. The levy on business rates growth had been abolished, and there was no mention in the Bill of the Fair Funding Review which did not require primary legislation. The second reading of the Bill would be the following week, and the finance team would be working with colleagues in public affairs to brief MPs on the LGA’s key asks.
The Government had not yet formally responded to the summer consultations on business rates, but two further consultations on system design and fair funding, modelling and data collection were expected. The LGA would be organising regional events to discuss the consultations in the same way as for the previous consultations.
In the discussion which followed Members raised the following points:
· When considering business rates retention the change in the nature of work should be taken into account, with fewer retail parks and more smaller units and online businesses. It was confirmed that there would be less revenue from smaller units, and the LGA was looking at alternative incentive structures which would be a key issue for 2020 and beyond.
· Members highlighted that Combined Authority Mayors would have the power to levy a small supplement on the business rate multiplier to fund infrastructure projects, subject to the approval of business members of the relevant LEP. Respondents to the consultation thought that this approval process should be given further consideration, and should be extended to all authorities.
· Concern was raised that some properties quickly lost small business rates relief. The Government operated a transitional relief scheme, with the biggest changes to be phased in over a number of years.
Decision
The Resources Board noted the updates provided in the report.