Business Rate Pilot - 75% retention
Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: No
The Assistant Director, Financial Services and Revenues, presented a report to agree to enter into a Business Rates Pilot for 75% business rates retention as part of the East Sussex Business Rates Pool.
The pilot will last a year and will involve joint working and pooling with East Sussex County, Borough, and District Councils and the East Sussex Fire Authority.
The government’s safety net for Pilot authorities at 95% provides a higher level of protection than the 92.5% that is available to authorities that are not in a pool or pilot.
Currently it is estimated that Hastings Borough Council will gain £40,000- £80,000 additional income from this scheme although the final calculation will be completed at the end of January.
Whilst the forecast gains are not as significant for Hastings BC as the other authorities in East Sussex they are much needed. The Council will also benefit with additional resources being available to neighbouring authorities, the County and the Fire authority.
Being part of the scheme would also give opportunity to supply feedback to the government.
Councillor Chowney proposed approval of the recommendations of the Assistant Director, Financial Services and Revenues report. This was seconded by Councillor Lee.
RESOLVED (unanimously) that:
1. The Cabinet confirm the Council will participate in the 75% business rates retention Pilot.
2. Agree that the finalisation of the Memorandum of Understanding and any other arrangements are delegated to the Chief Finance Officer.
The reason for this decision was:
Local authorities are free to come together to form pools for Business Rates purposes, as the Council has done for 2018/19. In this financial year the government asked for Pools to apply to be pilots of 75% rates retention (currently 50%). In such cases tariffs and top-ups are combined – and this should result in lower payments being made to the government.
Authorities within such arrangements need to agree how risks and benefits are shared. A pilot pooling arrangement could result in additional resources being retained within East Sussex. The estimates identify sums of £4.3m in 2018/19 which would be shared between authorities and used for financial stability and economic development purposes.
Report author: Peter Grace
Publication date: 10/04/2019
Date of decision: 07/01/2019
Decided at meeting: 07/01/2019 - Cabinet