Transcript BUDGET AND SERVICE PLANNING AWAY DAYS

Local Government Resource Review
Budget & Finance Overview & Scrutiny
Committee
13th September 2011
BACKGROUND
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…….
SCHEME OUTLINE
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
Indicative Brent figures (based on 2011/12):
Formula Grant
Business Rates
£165.9m
£ 97.5m
Top-up amount
£ 68.4m
TECHNICAL PAPERS
Issued on 19 August and include:
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Establishing the baseline
Tariffs and top ups
Levies and safety nets
Revaluation and transition
Resetting the system
Renewable energy
Pooling
ESTABLISHING THE BASELINE
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
Authority Baseline
Update existing formula grant settlement
Either - base on average national increase
Or - update the formula (eg population data)
ESTABLISHING THE BASELINE
Authority Baseline
How to estimate individual authorities business
rates?
Either -
a "snapshot" assessment
Or -
average over 2 or 3 years
TARIFFS AND TOP-UPS
Either - Fixed in cash terms
Better for tariff authorities
Or -
Increased by inflation
Better for top-up authorities
LEVY AND SAFETY NET
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
REVALUATION AND TRANSITION
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
RESETTING THE SYSTEM
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
RENEWABLE ENERGY
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
Business rates collected from renewable
energy projects will be retained in full by the
relevant local authorities
Applies to projects after 1 April 2013
POOLING
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