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Local Government Resource Review Budget & Finance Overview & Scrutiny Committee 13 th September 2011

Local Government Resource Review Budget & Finance Overview & Scrutiny Committee 13 th September 2011. Initial consultation paper issued on 18 July Incentive to promote local growth Reduce dependency on central govt Maintain degree of distribution of resources Protection for businesses

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Local Government Resource Review Budget & Finance Overview & Scrutiny Committee 13 th September 2011

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  1. Local Government Resource ReviewBudget & Finance Overview & Scrutiny Committee13th September 2011

  2. Initial consultation paper issued on 18 July • Incentive to promote local growth • Reduce dependency on central govt • Maintain degree of distribution of resources • Protection for businesses • Eight technical papers to follow……. Background

  3. Local authorities retain share of business rate growth as a replacement for current formula grant system. Either Keep existing rates plus a top-up Or Keep existing rates less a tariff Scheme outline

  4. Indicative Brent figures (based on 2011/12): Formula Grant £165.9m Business Rates £ 97.5m Top-up amount £ 68.4m Scheme outline

  5. Issued on 19 August and include: • Establishing the baseline • Tariffs and top ups • Levies and safety nets • Revaluation and transition • Resetting the system • Renewable energy • Pooling TECHNICAL PAPERS

  6. National Baseline • Keep within SR2010 figures (business rates more than formula grant in 2014/15) • An estimate will be made of national business rate levels for 2013-14 and 2014-15 - authorities will only benefit to the extent that business rates exceed those forecasts • Amounts above SR2010 levels will be "set aside" Establishing the baseline

  7. Authority Baseline • Update existing formula grant settlement • Either - base on average national increase • Or - update the formula (eg population data) Establishing the baseline

  8. Authority Baseline • How to estimate individual authorities business rates? • Either - a "snapshot" assessment • Or - average over 2 or 3 years Establishing the baseline

  9. Either  - Fixed in cash terms • Better for tariff authorities • Or - Increased by inflation • Better for top-up authorities Tariffs and top-ups

  10. Levy - used to recover "disproportionate growth“ • Principally used to fund a “safety net” to deal with downturns in rates for individual authorities • No specific amounts proposed for what the levy might be (eg x pence in the pound) • Safety net could relate to annual reductions in income or reduction from starting point Levy and safety net

  11. No change to the current arrangements for revaluation of rateable values every five years • Transitional protection for business ratepayers to phase in revaluations would remain • The system would be adjusted to take account of the redistribution of business rates income between authorities Revaluation AND TRANSITION

  12. Option to reset the system: • Enables reallocation if resources no longer reflected changing service pressures for individual authorities • Balance to be struck with ensuring scheme provides incentives for growth and stability RESETTING THE SYSTEM

  13. Business rates collected from renewable energy projects will be retained in full by the relevant local authorities • Applies to projects after 1 April 2013 Renewable energy

  14. Business rates collected from renewable energy projects will be retained in full by the relevant local authorities • Applies to projects after 1 April 2013 Renewable energy

  15. Local authorities could choose to form voluntary pools • Would share benefit of growth and smooth impact of volatility over a wider area • A London wide scheme would change Brent’s position within the scheme pooling

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