Agenda item

Gloucestershire Business Rate Pool

To receive an update report on the status of the Business Rate Pool (report to follow) and the latest expenditure proposals for the Strategic Economic Development Fund regarding Business Case development for J10 and economic intelligence commissioning.


David Stanley: Accountancy Manager at Stroud District Council updated members on the 2018/19 forecast of the 100% Business Rates Pilot and new proposals for a Pilot in 2019/20.


The Gloucestershire Business Rates Pool was set up in 2013/14 to maximise the business rate income retained within the County and to support economic growth within the project areas administered by the GFirst LEP. It was confirmed that the outturn for 2017/18 had been very positive, with £3.992m of additional business rates income retained. The additional income was allocated in accordance with the Pool Governance arrangements, with 20%, (£0.798m), of the surplus set aside for the Strategic Economic Development Fund (SEDF). The cumulative amount of funding generated by the Business Pool for the SEDF since 2013/14 totalled £1.134m.


The report confirmed that the Business Rates Pilot 2018/19, (involving all 7 Gloucestershire Councils), would end on 31 March 2019. Initial financial modelling undertaken as part of the application process over the summer suggested a potential benefit from the pilot of £10m, increasing to a forecast benefit of £14m. Members were advised that the forecasted benefit could reduce to take into account any prior-year adjustments.


A consultation paper issued in July 2018, (on the 2019/20 Local Government Finance Settlement), included information on the process for submitting bids for business rates pilot schemes in 2019/20. Gloucestershire, alongside other local authorities throughout England, will be eligible to submit an application to engage in the business rates retention pilot scheme 2019/20. Applications to be submitted by 25 September 2018.


Members were informed that the main change from the current (100%) scheme was a reduction in the local share from 100% to 75%. Another important change was that there would no longer be a ‘no detriment’ clause. Members expressed concern about the heightened level of risk from joining the new scheme and suggested a more in-depth discussion might be required for the committee to consider future options. To engage in the new pilot, a decision on the share of business rates the district authorities would be required to pay the County Council would need to be considered. 


Considering the recommendations proposed at the meeting, and noting the level of support from Business Pool members, it was agreed to support the proposal to join the 2019/20 pilot scheme as an ‘in principle’ decision only, pending the outcomes of the County Section 151 Officer meeting on 12 September 2018.


In considering the recommendation to release funds from the Strategic Economic Development Fund for the commissioning of countywide economic investments, (including proposals to develop Junction 10 on the M5 Motorway), several members expressed concerns about the risk involved in making a decision at this present time, particularly when the amount of reserve funding would not be known until January 2019.

To demonstrate to the LEP, (and to help secure Homes England Funding for the County), the Commissioning Director: Communities and Infrastructure advised that it would be useful to agree an ‘in principle’ decision for the transfer of reserves from the Strategic Economic Development Fund to support some of the proposals included within the current Strategic Economic Plan . 


Following a detailed and in-depth discussion, the committee agreed to defer the decision to allocate SEDF funding to i) support the M5 Junction 10 improvement scheme, and ii) support the work of the LEP and GCC Data and Analysis Team. A further discussion to be held at the 21 November 2018 committee meeting.


Furthermore, it was suggested that the Senior Officer Group (SOG) be requested to consider the eligibility criteria and project approval process for the assessment of future funding bids from the Strategic Economic Development Fund and to make recommendations to the Joint Committee at a future meeting.


The committee noted the report and: - 


1.    Note the forecast for 2018/19

2.    Consider the scope for a pilot bid for 2019/20

3.    Agree ‘in principle’ the allocation of £275,000 reserves currently held in the Strategic Economic Development Fund for the purposes of revenue funding contributions/providing support for the M5 Junction 10 improvement scheme (Reserve funding will be available from January 2019); and

4.    Defer the decision to allocate £50,000 of reserves currently held in the Strategic Economic Development Fund, (to be used for the purposes of commissioning additional economic intelligence to support the work of the LEP and GCC Data and  Analysis Team, and in refreshing the current Strategic Economic Plan and working towards the preparation of an Industrial Strategy for Gloucestershire). Reserve funding will be available from January 2019.






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