Issue - meetings

Report of the Cabinet Member Finance

The Cabinet Member Finance accepted that this was a complicated issue and attempted to explain it as clearly as possible.  The good news for local councils was that next year they could retain 50% of the business rates collected.  The bad news being that any council that collected above its baseline funding level may have to pay a levy and those councils that did not achieve their baseline funding level could be eligible for top-up funding from central government to protect them against significant reductions on their income.

The coming together of local authorities to pool business rates could put member authorities in a beneficial collective financial position and could also allow for the off-setting of tariffs against top-ups and reduction in levy.  Importantly no Council would be worse off as a result of business rate pooling but this matter would need to be considered further when the Local Government Financial Settlement was announced in November/December 2012.

Given the timescales it would not be possible to bring the matter back to Council but as per the new Executive arrangements the decision by Officers would be published. 

The Cabinet Member Finance gave the following responses to member questions;

• The monies would continue to form part of the Council’s income streams as they did at present and the surplus could be used for economic development but this would be a matter for consideration and determination by Council.
• The Business Rate Retention scheme would start in April 2013 but the submission deadline for proposals to the Government for a Gloucestershire Pool was the 19 October 2012.  Given that the exact impact of the business rate pooling would not be fully understood until the draft Local Government Finance Settlement was announced, a cooling-off period had been built into the Government’s timetable which offered an element of flexibility for councils to change their mind.  It was stressed however that such a decision would impact other authorities. 

The Mayor welcomed the principle of the Council being in control of monies collected locally. 

In closing, the Cabinet Member Finance acknowledged the huge amount of work undertaken thus far by Officers at this Council and across the County. 

Upon a vote it was unanimously

RESOLVED that

a)     The proposal to be part of a Gloucestershire Business Rates Pool, subject to a thorough assessment of risks/rewards and agreement on satisfactory governance arrangements be agreed in principle

b)     Subject to a) above, the submission of a proposal to the Government for a Gloucestershire Pool by the 19th October deadline be approved

c)     Authority to assess the risks/rewards and agree the business case for joining a Gloucestershire Business Rates Pool be delegated to the Section 151 Officer and Chief Executive

d)     Authority to agree the governance arrangements for the operation of a Gloucestershire Business Rates Pool be delegated to the Section 151 Officer and Chief Executive, in consultation with the Borough Solicitor, Leader of the Council and the Cabinet Member for Finance.

Report of the Cabinet Member Finance

RESOLVED that Council be recommended to:

1. Agree in principle to be part of a Gloucestershire Business Rates Pool, subject to a thorough assessment of risks/rewards and agreement on satisfactory governance arrangements
2. Subject to a) above, to approve the submission of a proposal to the Government for a Gloucestershire Pool by the 19th October deadline
3. Delegate authority to the Section 151 Officer and Chief Executive to assess the risks/rewards and agree the business case for joining a Gloucestershire Business Rates Pool
4. Delegate authority to the Section 151 Officer and Chief Executive, in consultation with the Borough Solicitor, Leader of the Council and the Cabinet Member for Finance, to agree the governance arrangements for the operation of a Gloucestershire Business Rates Pool.

The Cabinet Member Finance introduced the report which explained the Government’s proposals for Business Rates Pooling from April 2013. It also sought approval in principle to enter into a Pooling Agreement with all Gloucestershire district councils and the County Council subject to agreement on satisfactory governance arrangements and a full assessment of the risks and rewards.

The Cabinet Member highlighted that the impact of business rate pooling may not be fully known until late November/early December 2012 due to the timing of the draft Local Government finance settlement. The advantages of a pooling system would mean reduced risk to the council as it would be less vulnerable to fluctuations in business rate income and there would be benefits of sharing economic growth and business development across the county. However there would be uncertainty and impact on income streams resulting from the loss of major business and the constrained ability to increase the business rates in the town.

The Leader of the Council explained that Leadership Gloucestershire had added value in taking this issue forward and cross county working seemed a sensible approach.

RESOLVED that Council be recommended to:

1. Agree in principle to be part of a Gloucestershire Business Rates Pool, subject to a thorough assessment of risks/rewards and agreement on satisfactory governance arrangements
2. Subject to a) above, to approve the submission of a proposal to the Government for a Gloucestershire Pool by the 19th October deadline
3. Delegate authority to the Section 151 Officer and Chief Executive to assess the risks/rewards and agree the business case for joining a Gloucestershire Business Rates Pool
4. Delegate authority to the Section 151 Officer and Chief Executive, in consultation with the Borough Solicitor, Leader of the Council and the Cabinet Member for Finance, to agree the governance arrangements for the operation of a Gloucestershire Business Rates Pool.