(Time: 3.20pm to 3.28pm)
The Executive received and considered report 138/07 of the Strategic Director and Chief Finance Officer, which reviewed the criteria for granting discretionary rate relief on any non-domestic property. The report sought agreement to a new simplified process for awarding National Non-Domestic Rate discretionary relief (business rates relief) that supported delivery of the Council’s Corporate Plan and Community Strategy.
The Local Government Finance Act 1988, as amended, set out the general categories of organisations and properties eligible for relief. Certain types of organisations such as charities, some sports clubs and certain rural businesses, were entitled to mandatory relief from rates on any non-domestic property providing certain criteria were met. Local councils had discretion to grant further top-up relief on the remaining bill. Councils also had discretion to grant relief on all or part of any rate bill for property that was occupied by certain non-profit making bodies and business in rural areas. The report set out the existing criteria and suggested changes to the scheme.
The suggested changes were:
· there would no longer be a differentiation between sports clubs with or without licensed bars. Instead, clubs would be encouraged to register with HM Revenue and Customs as Community Amateur Sports Clubs
· sports clubs that registered would be entitled to 80% mandatory rate relief and this could be topped-up at the Council's discretion, effectively granting the same rights to rate relief as registered charities
· the criteria for discretionary rate relief should be changed to make it clear that any sports club that had not applied for registration would normally have its discretionary rate relief reduced, initially receiving 50% discretionary relief which would then be reduced to 30% over a three year period. However, if a sports club proved it was not eligible to register, it would continue to receive 50% discretionary relief
· a further incentive to encourage registration would be the offer of 5% discretionary top-up rate relief in addition to the 80% mandatory relief
· businesses that occupied premises with a rateable value of less than £15,000 were entitled to Small Business Rate Relief, subject to conditions, which was awarded at no cost to the Council. Potentially eligible clubs should be encouraged to apply for relief. Failure to apply would result in any award of discretionary rate relief being based on what their rate liability would be if Small Business Rate Relief had been applied. Officers would encourage these organisations to appeal, as any reduction in the rate liability would also reduce the Council’s rate relief burden
· the non-domestic rating legislation made provision for 50% mandatory rural rate relief for certain general stores, post offices, general food stores, petrol filling stations and public houses. Councils could also top-up the relief to 100%. Councils could also award discretionary rural rate relief for rural premises used for local community benefit. It was proposed that discretionary rural rate relief was awarded to all eligible rural post offices and general stores at 50% across the District
· with regard to village halls run by a registered charity, it was proposed that they would receive 20% discretionary top-up rate relief in addition to the 80% mandatory rate relief. The majority of village halls were already receiving 100% relief. Where village halls were not run by a registered charity it was proposed that they would receive 90% discretionary rate relief, reduced to 70% over a three year period. This would encourage adoption of charitable status
· organisations applying for discretionary rate relief would need to satisfy the Council that they supported its aims and objectives and did not discriminate against any sectors of the community
· it was recommended that a cap was placed on the amount of discretionary rate relief that any organisation could receive for individual premises. At present, the Council was potentially vulnerable if an organisation enlarged its premises and attracted a higher level of non-domestic rates as a result. A cap of £8,000 discretionary rate relief was proposed and £4,000 for top-up relief to charities or Community Amateur Sports Clubs. The limits should be reviewed on an annual basis and raised in line with inflation and the non-domestic rates multiplier
· it was proposed that a degree of flexibility was included where the financial interests of the Council could be helped. SOLL had a contract to manage several of the Council’s leisure facilities. By awarding 20% top-up relief to SOLL and negotiating a reduction in the contract fee by the amount, it would provide savings for the Council. The same option could not be applied to CLS, which managed the White Horse Leisure and Tennis Centre, because it did not receive a management fee
· it was proposed that the decision to award discretionary rate relief, based on the categories agreed by the Executive, should be delegated to the Chief Finance Officer
· the targeting of discretionary rate relief in line with Council objectives promoted a strong and sustainable local economy and helped provide access to services and facilities. Other benefits included encouraging participation and local action and the protection and improvement of the local natural and rural environment
· the introduction of a new process based on categories of organisation that were eligible for discretionary rate relief ensured fair and equal treatment
· all potentially eligible categories of organisation had been compared with the Council’s Community Strategy and Corporate Plan to determine priorities. Appended to the report was an assessment showing links to the Community Strategy and/or Corporate Plan priorities
· by awarding discretionary rate relief the Council would be providing significant financial support to the Vale’s voluntary and community sector and some small, important rural businesses. This should be publicised
Members recalled that the full cost of mandatory rate relief was borne by the national non-domestic rate pool. The cost of discretionary rate relief was shared between the Council and the national non-domestic rate pool. The current budget for discretionary rate relief for 151 organisations was £58,870. The costs resulting from these changes were unknown as this was dependent on the number of applicants for charitable or Community Amateur Sports Club status. However, the more take-up that could be encouraged the better it would be for the Council financially. The officers estimated that in 2008/09 costs would not exceed the current budget based on the proposed changes. The annual cost should also reduce in the following two financial years when the incentives took effect. However, if relief was awarded to SOLL, there would be an overall saving to the Council of £10,173.
Members considered that the proposals were sound and approved them with effect from 1 April 2008. However, the Executive asked that the officers publicised as much of the schedule of rate relief as possible. It was considered that the public should be made aware of the organisations that received discretionary relief from the Council. In future, letters and application forms on this subject should advise organisations that the Council would publish this information. Members noted that where an individual recipient was concerned, the Council could be challenged under the Data Protection Act if this was to be published without the agreement of the individual.
Members asked that in Appendix B, reference to 'schools' should be preceded by 'independent'.
RESOLVED (by seven votes to nil)
(a) that the categories of organisation eligible for National Non-Domestic Rates discretionary rate relief from 1 April 2008, as set out in Appendix A of report 138/07, be approved;
(b) that the level of award to different types of organisation from 1 April 2008, as set out in Appendix B of the report, be approved subject to any over-riding considerations that mitigate against making an award to a particular organisation and subject to Appendix B be amended to refer to 'independent schools';
(c) that a cap of £8,000 be approved on the amount of discretionary rate relief and £4,000 be approved on the amount of discretionary top-up rate relief that any organisation can receive in respect of any particular premises in any one financial year, unless it is in the financial interests of the Council to facilitate a larger amount being awarded. The cap limits be reviewed each financial year and rise in line with inflation and the non-domestic rates multiplier;
(d) that authority be delegated to the Chief Finance Officer to award discretionary relief on the categories agreed by the Executive;
(e) that a review be undertaken of the eligibility of the organisations that are currently being granted rate relief;
(f) that the criteria for discretionary relief be reviewed at least every three years in line with the changing priorities of the Council commencing from year 2010/11; and
(g) that the officers be requested to publish as much of the discretionary grant information as possible, subject to data protection constraints, and they be requested to change correspondence and application forms to make it clear that such discretionary rate relief awards will be publicised with effect from 2008/09.