Agenda item

Joint Report of the Chamberlain and the Remembrancer.

To Follow.

Members received a Joint Report of the Chamberlain and the Remembrancer regarding Business Rates devolution in London.

The Chamberlain outlined that this was a pilot scheme, with the City as the lead authority. The scheme would have a financially neutral starting-point but enable any year-on-year growth in rates revenue to be retained in London—a dividend projected to be worth £240 million in 2018–19. Some of this would be used to establish a new strategic investment fund and the rest would be shared among the participating authorities (with the City of London’s projected share £8.2 million).

The Chairman suggested that the case for a Memorandum of Understanding was solid, however, in time, a firm contract would be desirable.

Furthermore, the Chairman and other Members stressed that officers should be vigilant about how the scheme developed if the pilot proved a success. There was caution about the assumption that London’s economy (and consequently its business rates coffers) would continue to grow unabated. When a downturn did occur, it was vital that the City was not left exposed.

RESOLVED – that Members approved the following:

1) the Common Council should participate, as a pilot scheme for the 2018-19 financial year, in a business rates pool with the Greater London Authority and the London borough councils;

2) the arrangements for the distribution of revenue within the pool should, subject to recommendation (3), be as described in the body of this report;

3) the Chairman of the Policy and Resources Committee should be authorised, in consultation with the Chairman of the Finance Committee, to agree to minor variations in the arrangements, if agreed by the other participants in the pool;

4) the Common Council should agree to act as the lead authority for the pool and for the strategic investment fund to be established under the pooling arrangements;

5) the Town Clerk, the Chamberlain or the Comptroller & City Solicitor (as appropriate) should be authorised, in consultation with the Remembrancer on matters of constitutional or legislative relevance, to take all necessary legal and practical steps for the establishment and administration of the pool and the strategic investment fund, in accordance with the preceding recommendations;

6) the Chamberlain should be authorised to draw upon the City Fund reserve to meet the additional costs incurred in the administration of the pool and the strategic investment fund, including those arising from the Common Council’s role as lead authority, up to one full-time equivalent post, with the amounts drawn down being refunded, and any future costs met, from additional revenue retained under the scheme as it becomes available;

7) oversight of the City Corporation’s work in connection with the pool and the strategic investment fund should be referred to the Policy and Resources Committee so far as concerns governance and the distribution and deployment of resources, and to the Finance Committee so far as concerns financial administration;