Transcript Rutland

Localisation of
Business Rates
Cllr Terry King
Background
• Business Rates (NNDR) are currently collected by the Local
Authority (LA) as an agent of central government. The amount
collected, less some costs is paid over to central government ie it
is pooled.
• As part of the Local Government Settlement, NNDR is
redistributed to LAs to fund services. There is no direct link
between the NNDR collected locally and the amount of NNDR
‘grant’ an LA receives.
• From 1 April 2013 the above arrangements will cease and LAs will
retain the business rates they collect – subject to a number of
rules and conditions!
What we know
• For each LA a ‘needs’ baseline and a ‘business rates’ baseline will
be set
• The needs baseline will be set based on the 2012/13 Formula
Grant Allocation (subject to limited alterations)
• The business rates baseline will be set based on average business
rates income over a period of years (yet to be determined)
• If NNDR income exceeds the needs baseline then the LA will pay a
tariff to central government
• A top up will be received by a LA where the NNDR income is below
their needs baseline
What we know
• If a LA increases their business rate baseline they will be entitled
to keep a proportion of the extra NNDR income
• If an LA experiences a significant reduction in their business rate
baseline then they may be entitled to a safety net payment from
central government
• Details of the scheme released so far show that the impact of a
reduction in the baseline will be greater than the gain from an
increase in the baseline.
Uncertainties
• The needs baseline has not yet been set therefore we do not know
what the level of income from 1 April will be. This is expected in
the Autumn
• No decision has been made on how the average business rate
baseline will be calculated. This could make a significant
difference to Rutland due to recent closures such as HMP Ashwell
• There is no confirmation of how the safety net will work i.e. what
value or proportion of reduction business rates income triggers
assistance from central government