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Localism and Local Tax: The Early Lessons in Revenues Simon Horsington
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Overview Overall Funding Position, CTR and Rates CTR, Schemes & performance Approaches to Rates incentivisation Likely impacts from Autumn Conclusions
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Overall Position….
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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
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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
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Localism Means… The change to Council Tax Benefit; The changes to Rates; and The changes to Council Tax reliefs.
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Council Tax Reduction…
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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%
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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
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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.
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Business Rate Retention
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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
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Case Law: Occupation Rateable occupation is based upon caselaw Four principles: ◦ Actual, ◦ Beneficial ◦ Non too transient ◦ Exclusive The old case law; and Some new
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And… Completion Notices Exemptions Properties at “higher risk” of omission from List Administrations, Insolvencies, “Pre-packs” Charities
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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
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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!
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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.
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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!
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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
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Thank You simon.horsington@btinternet.com 07990 552929 simon.horsington@btinternet.com
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