To receive an update report on the Business Rate Pool and potential expenditure options for the Strategic Economic Development Fund.
David Stanley, (Accountancy Manager and Section 151 Officer at Stroud District Council), gave an update on the Gloucestershire Business Rates Pool 2016/17, including an initial forecast for 2017/18.
Business Rates Pooling
In January 2016, following completion of the government returns and the setting of the business rates for 2016/17, initial forecasts estimated an additional £2.5m income would be retained in Gloucestershire as a result of business pooling.
Members recalled that the Joint Committee had received updates, indicating retentions of £1.9m in September 2016 and £2.3m in December 2016. The outturn position for 2016/17, (at the mid-point of these two forecasts), had been £2.1m retained income. This was considered a good position, with 20% of the surplus for Gloucestershire, (a contribution of 241k), set aside for the Strategic Economic Development Fund (SEDF).
It was reported that the initial forecast for the 2017/18 financial year, (forecast at an estimated £4.02m retained income for Gloucestershire), might have been a little optimistic and would be reviewed later in the year. It was anticipated that the estimation would reduce, with an update to the Joint Committee at the November meeting. Action by – David Stanley
100% Business Rates Retention
Members received an update on the 100% Business Rates Retention and noted that, in response to the initial consultation, the government had issued a further consultation on the design of the reformed business rates system. The consultation ended on 3 May 2017.
Prior to the general election, the government had indicated, (subject to parliamentary approval), that the intention would be to introduce the new system during the 2019/20 financial year. It was reported that this may now be subject to change and was likely to take some time to initiate, possibly up to 18 months.
100% Business Rates Pilots
At the committee meeting in March, members had been advised that the government would be inviting 2-tier authorities to make an application to become a Business Rates Pilot area for the roll out of the 100% Business Rates Retention initiative.
Members were informed Gloucestershire CFO’s (Chief Financial Officers) had written to central government offering to host a 2-tier pilot. An update to be presented to the Committee later in the year. Action by – David Stanley
David Hagg from Stroud District Council advised the committee that a ‘relief fund’ would be made available to local authorities and stressed the importance of making maximum use of this opportunity. Subject to publication of government guidelines, David Hagg agreed to circulate information on how to respond to the initiative, by email. Action by – David Hagg
LEP Core Funding Position
Updating members on the report to the committee at the March meeting, it was confirmed several meetings had been held to consider LEP Core Funding proposals, including discussions held between the 7 Gloucestershire Councils and GFirst LEP. The emerging consensus from the meetings provided the following outcomes: -
a) There is a need for the locality to continue to match the Government core funding and the funding should be diversified;
b) The Strategic Economic Development Fund (SEDF) of the Business Rate Pool provides the best route of achieving this, with sufficient funds available;
c) The locality fund to be agreed by the Joint Committee, on an annual basis;
d) A review of the need for on-going Core Funding during 2019/20 to coincide with the end of the Growth Deal period in 2021.
A number of key considerations continue for discussion, including the position of Tewkesbury Borough Council, who are currently not included in the Business Rate Pool.
A meeting of the 7 Councils and GFirst LEP will be held in July, the outcomes of which will be reported to this committee for a response. It was agreed a clear direction was needed from the Joint Committee before a decision could be made.
A detailed proposition to be presented to the Joint Committee at the next meeting. Action by – David Stanley