Agenda item

Councillor Negus was invited to join the table

The Interim Service Manager for Corporate Finance briefly introduced the report which sets out details of business rates both under the existing rates retention scheme and the 100% rates retention pilot starting on 1 April 2017. Also included was information around reliefs, Section31 grant, losses on appeals and the mechanics behind how the multiplier and tariff operate.

The following is a summary of the key discussion points and comments made:

·       The Chair asked for clarification of how the new multiplier works. Officers responded that this is the increase year on year that BCC can apply to business rates, this is capped by the Government to a 2% increase and is now based on CPI rather than RPI.

·       A Member asked about the rateable values which have previously been set by Government and which can now be set lower by BCC.  An example given was a cash machine installed in a community shop has meant that the owners business rates have apparently almost doubled.  It was suggested that small business are being penalised.

·       Officers advised that any changes to business rates policy would require Full Council approval

·       Members asked for clarification on whether the RSG / Rate Support Grant had now gone.  Officers confirmed that the grant has now gone and the council gets what it collects instead.  BCC will now collect approx. £200M and will keep £150M.  There will be new money but there is also more risk attached to this process, such as appeals and enforcement.  The council must therefore maximise what it collects.

·       A Member asked about definitions of charitable status for bodies such as hospitals, schools and care homes and if there is scope for the council to review this.  Officers advised that other councils have challenged businesses attempting to use charitable status/arms inappropriately to offset business rates. Charitable rate relief is mandatory (80% reduction) for example if the hospital trusts applied for charitable status would see a reduction of £30M to the council. There is a mandatory requirement if the criteria is met (80% is repaid by the government, 20% is at our discretion and done at the cost to the council).

·       A Member enquired about BCC’s discretionary rate relief and if it would be possible to look geographically at small businesses and assist them to help regenerate areas.  The Cabinet Member responded that it would require a policy change at Full Council to do this and how the council decided to utilise the 20% discretion that it has.  It was suggested by the same Member that the council could concentrate more on landlords of HMOs who are claiming business rate relief when they perhaps shouldn’t be.  Officers will take this away and examine enforcement activity and data analysis to generate opportunities for greater collection rates and who determines the criteria for a business rates.

The Cabinet Member said that he was taking this issue to the relevant Minister.

ACTION - Officers to report back to Members on increased enforcement activity and who determines the business rate criteria for small businesses

·       A Member requested if in future a report of this complex nature could have some graphs etc to visually demonstrate positions. Officers agreed to bare this in mind.

·       A Member asked for clarification of the risks involved and it was explained that a safety net of 97% existed that income wouldn’t fall below and that if any increases occurred, the council will automatically keep them.

·       Members asked about ‘empty property relief’ and whether BCC had to offer it.  Officers said that lasted for 3 months only but that BCC policy is being reviewed with a view to making it more complex to be eligible for empty property relief.

·       A Member asked about small business rate relief and the recent changes.  Officers said that more business are now able to claim this but that the council claims the money back via S181 so there is no loss to the council.

Councillor Kent declared an interest as the Chair of Hartcliffe Community Farm – which receives 100% business rate relief.

·       A Member asked about some businesses which may now get 100% rate relief or a discretionary rate relief.  Officers advised that they are conducting a review of discretionary rate relief – small properties might be covered under small business rate relief and may be continuing under the old system - officers advised that they will ensure that this is fed into the team leading on the review and they would ‘join the dots up’ when they completing the review.

·       A Member commented that the £300M discretionary fund seemed low.  Officers said they are currently querying this figure with central Government.

RESOLVED:

That the report be noted