Agenda item

Report of the Executive Director of Resources

(NOTE: Pursuant to Part 3e, Paragraph 19, of the City Council's Constitution, Councillor Lancaster, the Chair of the Scrutiny Co-ordination Committee, has been invited to attend for the consideration of this matter and to agree the need for urgency such that call-in arrangements will not apply. The reason for urgency being, the need to submit the City Council’s response to Central Government at the earliest opportunity, given their 31^st October 2016 deadline.)

The Cabinet considered a report of the Executive Director of Resources, which sought approval of proposals to participate in 100% business rates retention pilot.

The Government announced that it intended to introduce a national scheme for the full local retention of all business rates, probably from 2020/21 financial year onwards.

Areas that had agreed a Devolution Deal had the opportunity to be involved in a 100% business rate retention pilot, which would begin from 1^st April 2017.  This would provide the opportunity to shape national thinking about the eventual scheme and to take forward further devolution.  Conversations about the potential for a West Midlands pilot had taken place in parallel with discussions about a Devolution 2 Deal.  Each pilot would incorporate some core design principles, but there would be some flexibility around what else was included.

The Department for Communities and Local Government (DCLG) had clarified that the pilot would only be open to constituent member authorities of combined authorities.  Subject to the approval of each local authority and by Ministers, the West Midlands metropolitan authorities could be involved in a pilot should they wish.  It was noted that each of the authorities would need to agree to participate for the pilot to go ahead.

It was proposed that the pilots would operate on a no financial detriment principle, meaning that authorities could not be worse off financially than they would otherwise have been had they not participated in the pilot.  It was noted that, following detailed scrutiny of the way in which the pilot would operate, it had become clear that there may be a windfall benefit to authorities as a result of being part of the a pilot.

As there were still some matters that were the subject of ongoing dialogue with DCLG, it was being recommended for Coventry that authority to finalise detailed terms and arrangements for the pilot be delegated to the Executive Director of Resources following consultation with the Leader of the Council and the Cabinet Member for Strategic Finance and Resources.

The report indicated that, should the individual authorities and ministers wish to proceed, there was a need for the Government to commence the necessary legal process very shortly.  Councils had therefore been asked to approve their participation formally during October, although in Coventry’s case, the decision was being considered on 1^st November as the soonest available meeting.

Due to the timescale for this matter, in accordance with Part 3e, Paragraph 19 of the City Council’s Constitution, Councillor Lancaster, Chair of the Scrutiny Co-ordination Committee, attended the meeting for the consideration of this matter and agreed the need for urgency such that call-in arrangements would not apply.

RESOLVED that the Cabinet approve:-

1.  Coventry City Council’s participation in a West Midlands business rate retention pilot from April 2017, on a no detriment basis and in accordance with the terms outlined in the report submitted.

2.  Delegation of the authority for final sign-up to the pilot to the Executive Director for Resources, following consultation with the Leader of the Council and the Cabinet Member for Strategic Finance and Resources.