Agenda item

Councillor Claire Kober OBE, introduced the item. She advised members that ten more business rates retention pilot areas had been announced for the 2018/19 financial year. No details were yet available on the 2019020 round. The LGA would continue to work with Government on this area.

The fair funding review would be implemented in 2020. She drew attention to the formulas/cost drivers which were currently in the list of proposed formulae and ‘starter’ cost drivers (Appendix B), and that any comments and views from members were welcome ahead of the preparation of the LGA’s response. The Business Rates Task and Finish Group would be looking at this later.

In the discussion which followed, members made the following points:

·         In two-tier areas, it would be important to ensure that upper-tier authorities were properly funded, as they bore a substantial part of costs.

·         Members discussed the trade-offs between simplicity and accuracy of the relative needs assessment formulae. There was a support from some members for a reduced number of cost drivers, as long as the formulae were based on evidence and as long as this did not come at a cost to fairness.

·         The overall quantum of Government resources available for local government was highlighted as a key issue alongside the Fair Funding Review.

·         Made a number of recommendations of indicators and service areas to be considered.

·         There was a discussion on factoring in the numbers of looked after children and students for each local authority, since both resulted in additional costs.  The public health services pressures also needed to be reflected. Clarity from Government needed to be sought on both.

·         The LGA needed to continue to lobby for a fairer funding model for councils. Within this context, there was a brief discussion on disparity in council tax levels, which it was felt, were too low in some areas.

·         Members highlighted that they would welcome historic supported capital borrowing being factored into the figures. The data put forward needed to be fair and evidence based.

·         It was also important that additional capital spending pressure on the schools expansion programme and the reductions in RSG (with more than 150 councils in negative RSG in the 2019/2020 financial year) were highlighted.

·         Consensual agreement needed to be reached on the Review as far as possible, although there would be diversity of opinion on what was fair.

·         A point was made about reviewing council tax discounts across the country.

·         Members thanked the BRR Task and Finish group for their work on this area.

·         It was emphasised that the LGA should consult widely with membership on this issue.

·         Members highlighted that the LGA needed to continue to push for 100% business rates retention for councils. There also needed to be clarity on timings.

·         There was a brief discussion on the council tax collected which went straight to internal drainage boards in some areas.

Decision:

1.    The Executive noted the report, and provide comments on the paragraphs highlighted in Appendices A and B.

Action:

1.    Officers to proceed with work on the Fair Funding Review and Business Rates Retention in line with the comments made above.