Issue - meetings

The Board considered a report of the Operational Director, Finance, which outlined the consultations on the recently published business rates reform and the 100% business rates retention proposal.

The Board was advised that on 5 July 2016, the Department for Communities and Local Government (DCLG) published a consultation paper regarding the implementation of a new system of 100% business rates retention for local government by 2020. It was noted that Halton was working with the other Liverpool City Region (LCR) Councils, to prepare a combined LCR response to the consultation, as the implications for each of the six Councils were very similar. Alongside the consultation, the Government also announced a Fair Funding Review of Councils’ relative needs and resources, the outcome of which would establish the funding baseline for each Council and the level of top-up grant that would be received.

It was reported that the LCR had already agreed to be a pilot area for 100% Business Rates Retention, as approved by the Board on 16 June 2016. Following discussions with DCLG, and as a result of being a member of the pilot area, it was noted that the Council would not be required to sign up to the four year grant settlement offer, as during this pilot period, DCLG guaranteed that no Council would be financially worse off as a result. However, since then, DCLG had published a paper titled “Calculating No Detriment”, which outlined the principles of Councils within pilot areas being without detriment to the resources that would have been available to them under the current local government finance regime. The Board noted that although this guaranteed the Council would be no worse off as a result of being a pilot area, it did not provide absolute certainty of the Council being no worse off if it had signed up to the four year settlement or if it had not. It was therefore considered prudent for the Council to sign up to the four year offer and to publish an efficiency report by 14 October 2016.

The report set out the key proposals from the consultation and the Fair Funding Review for Members’ information. Technical work groups, set up by Government, had considered the following themes:-

·       Devolution of responsibilities;

·       Operation of the system, including how growth was rewarded and risk was shared;

·       Local Tax Flexibilities;

·       Accountability and accounting in a reformed system; and

·       Assessment of Council’s needs and redistribution of resources.

RESOLVED: That

1)    the Operational Director, Finance, in consultation with the Resources Portfolio holder, take the necessary steps to accept the four-year funding settlement offer by 14 October 2016; and

2)    the Operational Director, Finance, in liaison with the Resources Portfolio holder, contribute and agree to the Liverpool City Region response on the consultation titled “Self-Sufficient Local Government: 100% Business Rate Retention”, and the call for evidence titled “ Fair Funding Review: Call For Evidence on Needs and Distribution”.