Agenda item

Briefing Note of the Executive Director of Resources

The Committee considered a briefing note and received a presentation of the Executive Director of Resources on the national changes to Business Rates (BR) that were expected to be introduced from 2020 including 100% local retention of Business Rates. Information was provided on the potential impact on Coventry as well as key issues relating to students and the university sector. Councillor Duggins, Cabinet Member for Policy and Leadership attended the meeting for the consideration of this item along with Alan Markey, Director of Coventry Independent Advice Service. 

The briefing note indicated that the fundamental change proposed by the Government related to local councils retaining 100% of BR income compared to the 49% retained currently. The Government was currently consulting on changes and had invited views on the future running on the BR scheme. This covered a number of aspects that would influence the financial impact on local government as a whole as well as the allocation of funding between individual authorities. The outcome would dictate whether the early years of the changes would result in a positive, negative or broadly neutral impact on Coventry’s financial position.

Information was provided on the key financial aspects likely to be determined. The briefing note highlighted a 20/21 model which showed some of the factors involved and how these could affect Coventry’s position including the current system position with 49% retained BR and grants, the new system ‘optimistic’ position with 100% retained BR and grants the new system ‘pessimistic’ position with 100% retained BR and no grants.

The presentation referred to the current position, the headline changes and to the consultation responses which were still being developed and were to be submitted as a Combined Authority response. 

In relation to the university/ student sector, the Board were informed that any properties providing student accommodation were not liable for a business rate charge and that Council tax legislation allowed for full time students to be exempt for Council Tax purposes. This affected approximately 3,800 properties in the city. Further information was provided on the mandatory (charitable) relief on the non-dwelling properties owned by the city’s two universities. 

Alan Markey provided an explanation about the current position relating to Attendance Allowance that was paid at two rates and was used to improve an individual’s quality of life. There was a possibility that the responsibility for payment could transfer from the Department of Work and Pensions to Local Authority control. 

Members questioned the officers and the Cabinet Member on a number of issues and responses were provided, matters raised included:

·  A concern about the lack of information relating to the 36 consultation questions and proposed responses with a request for an additional meeting to provide the opportunity to consider these

·  A concern about the inclusion of the reference to the two universities and their students, with an acknowledgement of the partnership relationship with the Council and the major economic impact they bring to the city

·  Clarification about how the revenue support grant was assessed, including the compensation element for students

·  A detailed explanation about the financial model set out in the briefing note

·  An acknowledgement of the importance of getting the right consultation responses back to the Government and the potential of the new system to bring further cuts to the Council’s finances

·  Details about the possible impact of Attendance Allowance, including the current number of claimants in the city and the associated costs

·  The potential financial impact of having a directly elected mayor for the Combined Authority area

·  A request for further information about the potential for BR pooling within the Combined Authority area and what the Council was doing to maximise BR growth. 

RESOLVED that:

(1) The content of the briefing note and presentation be noted.

(2) An additional meeting of Scrutiny Co-ordination Committee be held in the week commencing 19^th September, 2016 to allow members the opportunity to consider the Government consultation questions and the relevant responses.

(3) A further report with the consultation questions and any available responses as well as the potential for the pooling of business rates within the West Midlands Combined Authority and the Council’s strategy for maximising business rates income be submitted to the additional meeting.