Agenda item

To consider a proposal relating to the City Corporation’s participation in a pilot scheme for business rates devolution in London.

POLICY AND RESOURCES COMMITTEE

(Catherine McGuinness, Deputy)

FINANCE COMMITTEE

(Jeremy Paul Mayhew)

12 December 2017

14 December 2017

Pilot Scheme for Business Rates Devolution in London

The Government, the Greater London Authority (GLA) and London Councils had negotiated a pilot scheme for business rates devolution in London for the financial year 2018–19, involving the establishment of a business rates pool.

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 Common Council’s projected share £8.2 million). If these projections were not to materialise, the Government would guarantee that no individual authority would be worse off as a result of participating in the pool. The Common Council would therefore not face any risk to its current allocations, including the City Premium and the City Offset. The scheme would carry no commitment beyond 2018–19 but could offer a platform for a further-reaching devolution settlement.

In addition to this the City Corporation had been invited to act as lead authority under the scheme and undertake the main administrative responsibility for operating the pool and the strategic investment fund.

The proposal required the unanimous agreement of the borough councils and the Court of Common Council to proceed and it was recommended that the Court grant its approval.

Resolved – That:-

i)      approval be granted for the City Corporation to participate in business rates pool pilot scheme for the 2018-19 financial year, together with the Greater London Authority and the London borough councils;

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

iii)   the Chairman of the Policy and Resources Committee 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;

iv)   the City of London Corporation act as the lead authority for the pool and for the strategic investment fund to be established under the pooling arrangements;

v)    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;

vi)   the Chamberlain 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; and

vii)  oversight of the City Corporation’s work in connection with the pool and the strategic investment fund 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.