Meeting documents

Councillor Mordue

Cabinet Member for Resources, Governance and Compliance

To consider the attached report.

Contact Officer:  Andrew Small (01296) 585507

(a)          Decision(s)

That, subject to the level of proposed awards being increased from 30% to 35%, the revised discretionary business rates scheme attached as an Appendix to the Cabinet report, amended as might be necessary to reflect local variations as specified in the Cabinet report, be approved as the mechanism for distributing the Revaluation support awarded by Government.

 (b)      Reason(s) for Decision(s)

The scheme provides a framework within which discretionary relief funding can be distributed in the most appropriate manner.

(c)        Alternative Options Considered

None as such.  The major preceptors have been involved in the design of the scheme.

(d)       Relevant Scrutiny Committee

Finance and Services.  That Committee received a similar report at its meeting held on 5 September.  The Chairman reported that the Scrutiny Committee was fully supportive of the proposal, including the increase in the percentage rate of awards.

(e)        Conflicts of Interest / Dispensation(s)

None.

In the Spring of this year the Chancellor of the Exchequer had announced three types of business rates relief to help businesses most affected by the revaluation that had taken effect on 1 April, 2017.  These were:-

·         Supporting small businesses – ensuring that no business losing small business rate relief or rural rate relief as a result of the revaluation, faced excessive increases in bills.

·         Local discretionary  fund – a £300 million pot to be distributed to the hardest hit businesses under locally designated criteria.

·         Relief for pubs – a £1,000 rebate for all pubs with a rateable value of under £100,000.

Under the second point, the Government had announced the establishment of a £300 million discretionary fund over four years from 2017/18 to support those businesses that faced the steepest increases in their business rates bills as a result of the 2017 revaluation.  The Cabinet report dealt mainly with this particular element.

Revaluations were a normal part of the business rates system and usually took place over five years.  The revaluation process was not designated to generate more tax revenue but was intended to take account of regional and sector variations in the value of rated property.  The revaluation had taken effect on 1 April, 2017 and had been the first for seven years, having been delayed by the introduction of Business Rates Retention into the Local Government Finance system.  As a consequence, many businesses had seen significant changes in the amount business rates they were required to pay.  To mitigate the most severe impacts the Government had committed to a transitional funding mechanism.

The relief scheme for pubs and small businesses had already been applied, but delays in Central Government caused by the General Election and the need to get software suppliers to effect the changes, had meant that it had not been possible, until now, to bring forward the design of the discretionary scheme element.  The Government’s intention was that every billing authority in England would be provided with a share of the £300, million made available nationally to support their local businesses.  Billing authorities would be expected to use their share of this funding to develop their own discretionary rate relief schemes in order to deliver targeted support to the most hard pressed ratepayers.

The £300 million would cover four years from 2017/18 and AVDC’s allocation was as follows:-

·         £431,000 in 2017/18

·         £209,000 in 2018/19

·         £86,000 in 2019/20

·         £209,000 in 2020/21

Officers of AVDC had been working with their counterparts in the other Districts in Bucks and the County Council to agree the basis of a common scheme within Buckinghamshire. The draft scheme was appended to the Cabinet report and would be adjusted as necessary to take account of the variations specific to Aylesbury Vale.  The scheme had been largely framed within the existing discretionary relief scheme, but had been amended to reflect the higher values available to the Council as awarded by the Government through the Spring Budget announcement.  The focus of the scheme was on supporting small and local businesses and not chains, multi-nationals or utility suppliers.  The following was a summary of the proposed eligibility criteria:-

·         Relief was aimed at local businesses.

·         The business must see a significant increase in business rates between 2016 and 2017.

·         Awards would be made as a 30% reduction.  It was however reported that subsequent to writing the report, it had been calculated that it would be possible to increase this percentage rate to 35% and still remain within the limit of the Government funding made available.  The Finance and Services Scrutiny Committee had asked specifically that the percentage rate be increased and Cabinet concurred with this view.

·         The scheme would normally apply to businesses with a rateable value below £200,000.

·         Awards in year two would be a proportion of the year one relief.

·         There would be a de-minimus award of £60 pa.

·         The following types of occupiers/properties would not qualify for relief:-

a.    Unoccupied properties.

b.    Ratepayers that occupied more than two properties.

c.    Government buildings.

d.    Betting and gambling premises.

e.    Financial institutions, including cash machies/ATMs.

f.     Pawnbrokers and pay day lenders.

g.    Sex shops.

h.    Education establishments.

i.      NHS premises.

j.      Premises occupied by a precepting authority (legislative restriction).

k.    Ratepayers already in receipt of mandatory/discretionary relief.

The Government had awarded Aylesbury Vale £431,000 in 2017/18 and had been explicit that if not allocated it could not be carried forward to future years.  As the funding reduced in future years, the relief awarded would need to reflect the funding available.  Even allocating full support, to offset the total impact of the 2017 revaluation to all those classes of businesses which qualified in the local area, it would mean that approximately only 0% of the sum available would be allocated in 2017/18.  It was therefore proposed, that in accordance with the existing scheme, decisions on allocating the remaining balance be delegated to officers.  These would be considered on a case by case basis.  Awards would be made to mitigate instances of hardship and consider the local impact.

The value of the awards would be up to the maximum level set by Government.  It was possible for the Council to grant more relief than that allocated by grant.  However, once the maximum grant level had been reached, any additional award would be borne 40% by the Council, 9% by the County Council, 1% by the Fire and Rescue Authority and 50% by Central Government.

In the intervening time between the Government’s announcement of its intention to provide this funding and the Council’s ability to produce and get the scheme approved, officers of the Council had exercised discretion and judgement on enforcement action where they believed businesses might be covered by the scope of the proposed policy.

As mentioned earlier in this Minute, the Finance and Services Scrutiny Committee had considered a similar report at its meeting on 5 September and the Chairman, who was present at the Cabinet meeting elaborated upon the Committee’s deliberations.  The Committee had been supportive of the proposal.

RESOLVED –

That subject to the level of the awards being increased from 30% to 35%, the revised discretionary business rate scheme appended to the Cabinet report (amended as necessary to reflect local variations as specifically set out in the Cabinet report), be approved and adopted as the mechanism for distributing the revaluation support awarded by Government.