Decisions

This report gives details of performance against the Council’s Treasury Management Strategy and Annual Investment Plan 2019/20 for the first nine months of 2019/20.

This report presents the financial monitoring information for the Authority as a whole for the financial year 2019/20 to the end of December 2019.

The authority is required under paragraph 40 of schedule 1 to the Local Government finance Act 2012 to make calculations, and supply information on their anticipated collectable business rate income for the following year. This report sets out the calculations and seeks approval by the Council’s Chief Financial Officer. These figures will form part of the funding in relation to the Council’s 2020/21 budget.

The Local Government Finance Act 2012 amended the 1988 Local Government Finance Act to give local authorities the power to retain a proportion of funds obtained from business rates collected in their area.

The Department for Housing, Communities and Local Government guidance requires each billing authority should formally set a Business Rate baseline each year. This baseline will be the authority’s estimate of the business rates it forecasts to collect in the following financial year, net of any reductions such as reliefs and the estimated cost of appeals.

The Government introduced pilot schemes in 2017/18 in advance of permanent reforms to business rate retention later in the parliament. Initially only authorities with signed devolution deals were eligible to participate in a pilot in 2017/2018. The pilot for the West of England (WoE) commenced in 2017/2018 and includes Bath & North East Somerset Council, Bristol City Council, South Gloucestershire Council and the West of England Combined Authority.

The 100% pilot gives the WoE the opportunity to retain 100% of any business rates growth over the next year, with no downside financial risk when compared to remaining in the national system. It also gives the WoE the opportunity to help shape the national scheme.

In line with the Government’s stated intention for the reforms to the Business Rate Retention system, authorities participating in a pilot will not have to pay a Levy on growth above their Retained Income target and will retain an increased Local Share of Non-Domestic Rating Income and sums due from Government paid via Section 31 grant. The Pilot includes the rolling in of the Revenue Support Grant with the WECA receiving a small share of the business rates to reflect the rolling in of the DfT Integrated Transport Block and Highways Maintenance Capital Grants; this is shown in Table 1 below.

In line with the approval process for the Council Tax Base, the decision on the Business Rate forecast is delegated to the Council’s Chief Financial Officer. The Ministry of Housing, Communities & Local Government requires the council to submit details of its forecast through a statutory return called the NNDR1. This return must be submitted by 31st January 2020.

The estimated business rate income for 2020/21 is £66.834m; of this the Council retains £23.209m after the tariff payment to the Government is taken into account. A breakdown is shown in Table 1 below.

Table 1 Business Rate Distribution

Anticipated Business Rate Distribution 2020/21
£m
Bath & North East Somerset Council Business Rate Income (Total business rates collected after deductions) 66.834
Central Share to Government 0.000
5% Share to WoE Combined Authority (3.342)
1% Share to Avon Fire Authority (0.668)
Deductions for Tariff (39.615)
Bath & North East Somerset Council estimated retained Business Rates 23.209

In past years, the Government has announced a series of measures that continue to affect the business rates income of Local Authorities in 2020/21. These changes were:

i. Capping the increase in the business rates multiplier at CPI instead of RPI with effect from 1 April 2018.

ii. A discretionary relief scheme that will last four years to provide relief to the ratepayers facing significant increase in their bills following revaluation.

iii. Capping the increase in the business rates multiplier at 2% in both 2014/15 and 2015/16 (rather than it increasing in line with September RPI increases of 3.2% and 2.3%).

iv. A Supporting small business rates relief scheme to support those rate payers who lost all or some of their small business or rural rate relief due to revaluation.

v. The doubling of Small Business Rate Relief made permanent from 1st April 2017 with changes to eligibility thresholds.

vi. The doubling of rural rate relief to be awarded through discretionary relief until such time as the Government can make the necessary changes to primary legislation.

vii. Bills were cut by one-third for retailers, retailers including shops, cafes and restaurants in England properties with a rateable value below £51,000, benefiting up to 90% of retail properties, for 2 years from April 2019 subject to state aid limits.


All the above measures will be compensated through payment of a section 31 grant. The Council has estimated the impacts of these reliefs and has included the estimate of grant income in its 2020/21 budget.

The Council’s budget for 2020/21 also reflects transactions relating to the business rate pooling arrangements within the West of England City Region Deal agreement. These arrangements have been set out in previous budget reports.

The Section 151 Officer is required to estimate the amount of any surplus or deficit on the Collection Fund relating to Business Rates as at 31st March 2020. This must be done by the 31st January 2020, and this report also asks the Director of Finance to approve the balance projected related to Business Rates.

After calculations of current year collection and adjustments to the business rate base in 2019/20, including making provision for appeals, it is estimated that the 2019/20 collection fund account position relating to business rates will be in surplus by £1.615m. The surplus will be shared between the Council, WECA and Avon Fire Authority in line the 100% pilot shares. The Council’s total share of the projected surplus is £1.518m.

The overall position of the forecast 2020/21 business rate income and the forecast 2019/20 surplus on the collection fund have been taken into account in the overall Council’s budget proposal which will be presented to Council on the 25th February 2020.

That the calculation of the Council’s business rate forecast for the year 2020/21 as set out in this report be approved. The total forecast Business Rate income for 2020/21 is £66.834m, of which the Council will retain £23.209m after allowing for the required tariff payment of £39.615m and the WoE Combined Authority and Fire Authority shares as shown in Table 1 of the report.

That the projected surplus on the collection fund as at the end of 2019/20 related to Business Rates is declared at £1.615m. The Council’s share of the deficit is £1.518m.

The original Contract with GLL (Sport operator) required them to design and deliver a new build Leisure Centre at Keynsham (originally considered to be on Ashton Way Car Park). This new facility would not have included a Sports Hall or Squash Courts. During the latter stages of the procurement process it became apparent that the Ashton Way site presented numerous challenges, therefore a mandatory variant was built into the contract to all GLL to operate the existing leisure facility for 5 years. Consultation in September 2015 indicated a strong preference for the leisure centre to be developed on the Riverside site. Progression of wider options for the Riverside site have meant that the Council is currently leading on the design and construction of a refurbished facility in consultation with GLL (which aims to provide Sports Hall and Squash facilities). The current DBOM contract with GLL is being amended to 1) implement mandatory variant for GLL to manage existing Keynsham Leisure Centre until July 2021 (long stop date) 2) For the Council to design and deliver the refurbished centre 3) for a planned shut down of the existing centre (which will result in some loss of income) 4) Following completion of works transfer the operation of the centre to GLL (via negotiation). The project is already well underway and this request is to fully approve £250k of CiL funding that has been provisionally approved to help meet the additional costs of the enlarged facility that is being built following public and Cllr consutation.

To fully approve capital amounting to £250k from the provisional capital programme item CiL of £250k.