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Agenda item

100% Business Rates Retention Pilot 2018/19

Summary:

 

The Department for Communities and Local Government (DCLG) has invited local authorities to participate in a pilot of 100% Business Rates Retention in 2018/19. The local authorities in Kent have worked together to develop a Kent Pilot proposal. This report asks Members to note that this pilot proposal has now been submitted which includes Dartford Borough Council.

 

Recommendation:

 

That Members note that a proposal has been submitted to the Department for Communities and Local Government, to include Dartford Borough Council’s participation in the Kent wide 100% Business Rates Retention pilot for 2018/19.

Minutes:

The Department for Communities and Local Government (DCLG) has invited local authorities to participate in a pilot of 100% Business Rates Retention in 2018/19. The local authorities in Kent have worked together to develop a Kent Pilot proposal. This report asked Members to note that this pilot proposal has now been submitted which includes Dartford Borough Council.

 

  • The Strategic Director (Internal Services) explained how the Government wished to run the pilot in a two tier area and that Kent’s bid had also included Medway Council and so would also give the Government the opportunity to see how the scheme worked for a Unitary authority. She then said that if Kent’s bid was successful there would be minimal risk to the Council as, under the safety net mechanism, any potential losses caused by reduced business rate income would reduce from 7.5% of baseline business rates income to 3% under the pilot scheme. She also pointed out that the Kent authorities had seen strong business rate growth over the last few years and it would therefore require a significant setback to offset this growth. She then referred to the rewards that would be delivered by the pilot and said that, based on modelling, it would result in approximately £18m being kept for use in Kent rather than being passed to the Treasury. She said that 70% of this would put into a financial sustainability fund and shared between the local authorities in the pilot and that Dartford, where there is significant business and population growth, was predicted to receive £460,000 from this fund. The remaining 30% would be split between the Kent clusters with the North Kent cluster, which includes Dartford, receiving £3m to support housing and commercial growth. She then noted how Kent’s bid had been one of a number that had been submitted and said that they now had to wait to see if their bid had been successful.

 

  • Members asked whether benchmarks had been set to enable the Government to assess whether the pilot had been successful or not and whether the Council would be setting its own parameters to gauge the impact that the pilot was having on the area. The Strategic Director (Internal Services) replied that the Government had specified criteria that they were expecting to be met from the pilot and that the impact of the pilot could be fed back to Members. She said that the aim of the pilot was to encourage sustainability and economic growth and would initially be run for 1 year, with an option for it to be extended by the Government. She then noted how the Government’s original plans for business rate changes had been suspended following the General Election but said that the results from this pilot would feed in to future 100% business rate retention related decisions.

 

  • In response to a question the Strategic Director (Internal Services) confirmed that the ability to collect business rates in other parts of Kent was as good as that being achieved in Dartford and said that a Kent-wide Revenues and Benefits group met regularly to share and learn from each other’s experiences.

 

  • Members noted the financial benefits that this pilot would deliver but said that, if the bid was successful, the Council should treat the benefits that were being predicted as a one off, in case it was decided to discontinue the pilot until formal associated legislation could be introduced.

 

  • The Advisory Panel endorsed the report’s recommendations.

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