Localism and Local Tax: The Early Lessons in Revenues Simon Horsington

Overview Overall Funding Position, CTR and Rates CTR, Schemes & performance Approaches to Rates incentivisation Likely impacts from Autumn Conclusions

Overall Position….

Background to change The national savings agenda The biggest changes for Revenues and Benefits in 30 years? Welfare reform: a system grown over 60 years is reformed in 18 months And in Rates, 23 years, and overnight! Increased performance in a very tough business environment DCLG Manage CTR and BRR

Overall Funding Position: England & Wales CTB, 2011/12: £4,537m ◦ 10% cut applied; ◦ Grant is fixed, not demand led England Rates RV, 2013/14: £57,060m ◦ 30% RV is in London (i.e. £16,297) ◦ “Big Four” in London are half of this! ◦ Westminster alone £4,201m

Localism Means… The change to Council Tax Benefit; The changes to Rates; and The changes to Council Tax reliefs.

Council Tax Reduction…

Schemes: Overall Percentage Cut North Herts is the highest cut at 33.1%; 7 Councils at 30%- incl. Stoke & Peterborough; 30 Councils are between 21 and 29%; 55 Councils at 20%; 22 Councils between 10 and 19%; 101 at 8.5%; 13 at 1-8%; and 93 Councils fully absorbing the cut, i.e. maximum eligible amount remains 100%

Other Welfare Reform, & Impact Groups receiving “multiple hits”? Early Church of England claim- Single Parents Our research- people with disabilities? The collection challenge begins Overlay collection stats with schemes

Relationships with Preceptors Relationship is changing Not sure all of the preceptors get it yet But see: ◦ Kent in year 1 CTR; and ◦ “Pooled” Rates Authorities.

Business Rate Retention

Increase Yield List: What’s in the List What’s not Liability: Occupation Empty Rates, Completion notices etc. Exemptions Collection: Better performance Reduce Write-offs Insolvencies

Case Law: Occupation Rateable occupation is based upon caselaw Four principles: ◦ Actual, ◦ Beneficial ◦ Non too transient ◦ Exclusive The old case law; and Some new

And… Completion Notices Exemptions Properties at “higher risk” of omission from List Administrations, Insolvencies, “Pre-packs” Charities

The List: “Higher Risk” Premises Overall omissions Exemptions Extended planning permissions Advertising Rights ATM’s Enhancements- e.g. Petrol Station supermarkets Case law challenge- e.g. Farmers Markets etc. Air Conditioning “Tone” of List

Some Law which may re-emerge… Council Tax: ◦ Sole or Main ◦ Enforcement ◦ Liability Order ◦ Bailiff action ◦ Committal Rates: ◦ Rateable, i.e. should be in List ◦ Occupation ◦ Empty Rate, completion notices etc. ◦ Exemptions And the new Law!

Skills and Experience Case law and knowledge which returns Last used 1990/1993 Business Rates: ◦ An incentive to collect additional sums; ◦ In one of the toughest business environments in recent memory? Council Tax: ◦ The need to collect small sums of tax, ◦ From people not used to, or able to pay.

Financial planning and management New system: A more iterative and regular process? “Risk” factors to be managed: ◦ CTR: Increases in claims, Pensioners, costs of bad debt; ◦ Rates: The impact of appeals, financial impact of performance; Rates and CTR now Incentivised!

Conclusions… Financial Planning Cycle this year different Impacts of Rates, CTR Impacts upon smaller districts, and Councils outside London? Financial arrangements will drive greater collaborations, outsourcing, and rationalisation

Thank You