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Decision details
Business Rates Pooling
Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
Purpose:
The Council to consider a pooled arrangement for accounting for business rates. A joint pool with other East Sussex local authorities has the potential for retaining a greater percentage of business rates collected within East Sussex.
Decisions:
The Head of Finance presented a report which sought Cabinet agreement to the principle of entering into a Business Rates Pool.
In April 2013, a new funding regime had been introduced whereby local authorities retain a proportion of any additional business rate income collected, or conversely experience a reduction in resources if the business rate base declines.
Consideration had been given to pooling business rates between East Sussex authorities, which may help to mitigate the impact of any changes to the business rate baseline by supporting economic development and investment across the county, which may lead to a growth in business rate base. The report included a recommendation that no authority would receive a lower level of funding than they would have received without the pool.
The Leaders, Chief Executives and Directors of each of the respective councils had unanimously recommended that an application be submitted to the DCLG by 31 October 2014, to take up the next opportunity for pooling in 2015/16.
As part of the application process, a detailed proposal would need to be submitted and governance arrangements finalised for the scheme. The report recommended that Wealden District Council be nominated as lead authority. Authorisation to finalise the submission, agree the memorandum of understanding, and the final decision on whether to join the pool was delegated to the Chief Finance Officers of each authority. Membership of the pool would then be reviewed on an annual basis.
The Head of Finance submitted an amended recommendation at the meeting, as set out in the resolution below.
Councillor Birch moved approval of the amended recommendations which was seconded by Councillor Hodges.
RESOLVED (unanimously) - that Cabinet agrees in principle to enter a business rate pool with other East Sussex authorities and agrees the following conditions that are being put before each authority:
1) Wealden District Council be nominated as the lead authority
2) the basic principle be agreed that no authority will receive a lower level of funding than they would have received without the pool.
3) to split resources gained on the basis of the levy amount that was saved by individual authorities. The basis of the split being 40% to ESCC, 10% to the Fire authority and the remaining 50% split amongst the District/Borough Councils.
4) the finalisation of the submission, agreement of the memorandum of understanding, and the final decision on whether to partake in the pool, along with the annual review, is delegated to respective Chief Finance Officers for the reasons outlined in the report.
5) Chief Finance Officers to review membership of the Pool on an annual basis. Should an authority decide to withdraw membership, notification of intent to do so to be given to the remaining authorities at the earliest opportunity.
The reason for this decision was:
Local authorities are free to come together to form pools for NDR purposes. In such cases tariffs and top-ups can be combined – and this can result in lower payments being made to the government. Authorities within such arrangements need to agree how risks and benefits are shared. A pooling arrangement could result in additional resources being retained within East Sussex. The estimates identify sums of £1.8m in 2015/16, £2m in 2016/17 and £2.2m in 2017/18 which would be shared between authorities and used for economic development purposes.
Report author: Peter Grace
Publication date: 03/09/2014
Date of decision: 01/09/2014
Decided at meeting: 01/09/2014 - Cabinet
Effective from: 09/09/2014
Accompanying Documents:
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