Agenda item

Councillor Roger Ramsey, Cabinet Member for Value, introduced the report.

The Cabinet report set out the overall position in respect of discretionary rate relief against the Non Domestic Rate and explained the current budgetary position.

In light of the Council’s savings strategy and future changes in the funding arrangements to authorities, the report made a number of recommendations to the current policy operative from 1 April 2013.

It was reported that the Localism Act had introduced a wider discretion to authorities that enables the rates payable to be reduced in accordance with rules determined by the Council. However, any relief granted would be funded fully by the Council and this option was being considered separately as part of the Business Growth Strategy and was therefore subject to a separate report.

Reasons for the decision:

The changes in funding to authorities from April 2013 would place an additional burden on the Council and therefore the budgetary provision and policy for the award of discretionary relief required urgent review.

The reasons for the proposed changes were as follows:

-       Exclusion of educational establishments from discretionary relief. To provide a fair system of relief and funding for the maintained educational sector and to ensure the efficient use of resources.

-       The requirement for small businesses to apply for small business relief before being eligible for discretionary relief. To ensure that the Authority maximises the use of government funding.

-       The requirement for sports clubs to be registered as Community Amateur Sports Clubs (CASC) with the HMRC. To remove an anomaly in the system of relief and to provide consistency with the entitlement to mandatory CASC relief.

Other options considered:

The recommendations, whilst mainly affecting Educational establishments, would have minimal effects on other groups in the borough and therefore these proposals were considered to be the least unpalatable.

The option to continue with the current arrangements was rejected as the financial effect would be too onerous.

Cabinet:

1.    Noted that decisions on the level of discretionary relief will continue to be made by the Group Director of Finance and Commerce under the arrangements set out in this report in Appendices A and B (appended to these minutes).

2. Authorised a change in the current policy so that educational establishments would no longer be eligible for Discretionary relief.

3.    Endorsed current practice and with the exception of educational establishments only award discretionary relief to charities or non-profit making organisations, which wholly or mainly benefit Havering residents.

4.    Endorsed the current basis of calculation of relief through the assessment sheet, attached at Appendix B (appended to these minutes).

5. Authorised an addition to the current policy to require businesses eligible for Small Business Rate Relief (SBRR) to apply for that relief before consideration of any  Discretionary relief 

6. Authorised a change to the current policy so that to be eligible for discretionary relief Sports Clubs must be registered with HMRC as Community Amateur Sports Clubs 

7. Agreed an allocation of £160k to the Collection fund for the financial year commencing 2013/14, in line with the funding for previous years for non-educational establishments.