South Gloucestershire Council

Published: 05/10/2016

South Gloucestershire, Bristol and Bath & North East Somerset councils have been invited to take part in the Government’s 100 per cent business rate retention pilot, starting 2017/18.

Central government is only making this 100 per cent pilot available to those areas which have a signed devolution deal.

The proposed pilot would see 100 per cent of any future growth in business rates kept locally without deduction. Future growth may be generated by more businesses opening locally, for example.

This has the potential to provide additional resources of over £1M in each of the next two financial years to help partially offset ongoing budget pressures.

It differs from the current arrangements where the Government takes a levy from any growth generated above an agreed baseline.

Crucially, the Government has proposed a “no detriment” provision for the 100 per cent pilot to ensure that, if business rate income is lower than expected, those involved in the pilot would be no worse off than had they been operating the existing 50 per cent rate-retention scheme.

The proposals were considered and agreed at South Gloucestershire Council’s Policy & Resources Committee on Wednesday 5 October. The same proposals were approved by Bristol City Council’s Cabinet on October 4 and are also being considered in an Executive decision by Bath & North East Somerset Council’s Cabinet Member for Finance & Efficiency.

If all three local councils each approve the proposal, participation would then be contingent on the proposed West of England devolution deal receiving final approval by the Secretary of State later this year.

Cllr Matthew Riddle, Leader of South Gloucestershire Council, said: “In light of the financial challenges faced by all councils, this pilot could provide a valuable opportunity for South Gloucestershire Council to secure more local control and potential income for the area and two of our neighbouring authorities.”

It is expected that 100 per cent business rate retention will be introduced nationally in 2020-21, and possibly as early as 2019-20. At that point, the pilot would end and the three councils would join the full national scheme.

The proposal for this pilot is not impacted by the national business rates revaluation announced last week.