Agenda item

[Report of the Interim Chief Finance Officer. To be introduced by the Cabinet Member for Finance and Health.]

The proposal asks Haringey to join the GLA and all London boroughs to form a pilot pool of retained business rates during the 2018-19 financial year.

The Leader introduced the report which set out participation by the London Borough of Haringey in the London-wide Business Rates Retention Pilot for the financial year 2018/19. Participation in this Pilot, had been agreed by London’s Councils and similar reports were being considered by all London Boroughs.

RESOLVED

1.          To approve the designation of the London Borough of Haringey by the Secretary of State as an authority within the London Business Rates Pilot Pool pursuant to paragraph 34(7) of Schedule 7B Local Government Finance Act 1988 and;

2.          To agree that the London Borough of Haringey participate in the London Business Rates Pilot Pool with effect from 1 April 2018 (to 31 March 2019);

3.          To delegate the authority’s administrative functions as a billing authority pursuant to the Non-Domestic Rating (Rates Retention) Regulations 2013 to the City of London Corporation (“Colic”) acting as the Lead Authority;

4.          To authorise the Lead Authority to sub-contract certain ancillary administrative functions (regarding the financial transactions (payment of tariffs and top-ups) within the Pool to the GLA as it considers expedient;

5.          To delegate authority to the Chief Financial Officer, in consultation with the Cabinet Member for Finance & Health, to agree the operational details of the pooling arrangements with the participating authorities;

6.          To enter into such Memorandum of Understanding (MoU) with the participating authorities to implement and/or regulate the pool and delegate authority to the Chief Financial Officer (in consultation with the Assistant Director Corporate Governance) to negotiate, finalise and execute the same on behalf of the authority;

7.          To authorise the Leader of the Council to represent the authority in relation to consultations regarding the London Business Rates Pilot Pool as may be undertaken by the Lead Authority pursuant to the Memorandum of Understanding;

8.          To delegate to the Chief Financial Officer, the authority to consider such consultative reports as the Lead Authority may circulate and to respond on behalf of the authority with regard to any recommendations and in particular, proposals for projects to be approved for funding from the Strategic Investment Pot;

9.          To delegate to the Lead Authority the functions of assessment, due consultation and the approval of projects eligible for funding from the Pool’s Strategic Investment Pot following consultation with the participating authorities (provided that at least two thirds of such participating London Boroughs (including the city of London Corporation) and the Mayor of London are in favour of the relevant recommendation, and that no entire sub-region is in disagreement with the decision on such terms and conditions as shall ensure value for money and compliance with the law.

10.       To notify Full Council at its meeting on 26 February 2018 of Cabinet’s approval to the above resolutions.

Reasons for decision

The underlying drive to create a pool is to generate a net financial benefit for London which is not available under the current individual authority scheme.

As outlined in section 6 below, joining the Pilot for 2018/19 offers the potential to generate addition Business Rates income to Haringey above the level forecast if Haringey continued to operate as a single authority. It also offers Haringey the chance to propose strategic investment bids which would be funded from a top slice of any net benefit achieved across the whole pool. A clear guarantee on entry is that no Borough will suffer financial detriment as a result of participation in the Pool.

Furthermore, as a consequence of the establishment of the Pool, central Government will commit to exploring other funding changes which could be beneficial to Haringey and London as a whole.

Alternative options considered

The alternative option would be to formally opt out of participating in the pilot meaning that the Pan-London pilot would not go ahead as it requires all Boroughs listed in the agreement to participate.

As part of Central Government consultation on 100% business rates retention earlier in 2017, Haringey expressed a preference for the creation of a pilot scheme for London and would not consider opting out unless the proposed operation appeared detrimental to Haringey; this is not the case.