Agenda item

To consider the attached report.

The Assistant Director Revenues introduced the report explaining the background to our business rates collections and how this translated into the funding of local services.

The Council itself does not have control over the amount of rates payable as the rateable value was set by the Valuation Office Agency (HMRC) and the multiplier used to calculate the bill was set by central government. For 2017/18 the Council collected around £36m in Business Rates. Ratepayers paid that money to Epping Forest District Council but there can be a misconception of who retains this money to spend. Currently the Council retains less than 10% of this income to fund local services.

It should be noted that 50% of the rates collected was transferred to central government whilst 50% was retained as what is termed the ‘local share’. The ‘local share’ was split with 40% belonging to Epping Forest DC; Essex CC receives 9% and Essex Fire Authority 1%. So in cash terms this means that of the £36m collected, this authority retained around £14m. However the 40% EFDC share is further reduced by the ‘tariff’ applied of over £10m as the Government has set a business rates income baseline of a little over £3.1m as this is the governments assessment on how much EFDC actually needs.

There was one further adjustment to be made as this authority belongs to a Business Rates pool with other Essex authorities which means it would receive more of the increases in Business Rates income than not being part of a pool. The actual retained income increased to £3.7m for 2017/18. Therefore it could be seen that the final retained income was only around 10% of the Business Rates collected.

It was noted that the Council had a statutory duty to collect Business Rates and must act diligently in doing so. Officers would however seek to help struggling businesses within the parameters of this duty by ensuring that they were receiving all reliefs eligible to them and making payment arrangements to manage their debt.

This was the first of a series of reports that would be brought to the Resources Select Committee. The Government was expected to issue a series of consultation papers in the coming months, ahead of local rates retention moving from 50% to 75%. It was hoped that the release dates and response deadlines to these consultation papers would coincide with future meetings.

Councillor Whitehouse noted that this was a helpful starting point. He added that there was an economic development side to this, the difference between large and small businesses. Mr Pavey replied that most of our businesses were small businesses. Councillor Whitehouse added that business relief was mentioned; it would be helpful to have a note on discretionary and statutory reliefs. Mr Pavey agreed that this could be supplied.

Councillor Stalker wanted to know how rateable values were calculated. He was told that there were different valuation methods for different types of businesses, some also being zonal.

Councillor Patel asked the committee if they wanted to look at anything specifically they should the officers know.

RESOLVED:

That the Committee noted the report on Business Rates.