Agenda item

To consider the report of the Executive Director (Finance and Corporate Resources) setting out options for pooling Business Rates.

The report sets out the background to this item and further details will be sent to the Council as soon as they are available.

The Council considered a report in respect of proposals for the local retention of Business Rates growth from April 2013 and the options for pooling or remaining independent. Given the recent amendment of a central Government deadline for a decision on the choice of pools and the late provision of information from both prospective Business Rates Pools, Officers tabled additional information on the night.

Officers explained that Redditch sat in the Local Enterprise Partnership (LEP) areas of both the Worcestershire LEP and the Greater Birmingham and Solihull LEP (GBSLEP) and the Council had expressed an interest in participating in the Business Rates Pools of both. The Council was advised of the potential financial outcomes should it decide to follow each of the three possible courses of action, these being joining either the Worcestershire Pool or the GBSLEP Pool or remaining independent of either pool for the purpose of retention of Business Rates. The potential income from being the member of a pool was greater than would be anticipated from remaining independent.

Members were concerned at the limited time during which they had had the opportunity to consider the appraisals but fully appreciated the circumstances that had led to this situation. They were in clear agreement that the Council should follow the course of action that would allow the local economy to grow and prosper. Questions were asked around the risk reserves proposed by both pools, how and why they might be called upon and the use to which unallocated reserves would subsequently be put. The governance arrangements were also discussed, with Members seeking a degree of assurance that the Council’s interest would be adequately represented in each of the pools. It was also confirmed that the representation on either pool would be by a Member rather than an Officer.

The Council favoured the option of joining the GBSLEP Pool as it appeared to offer the greatest potential benefits to the Borough. Members were content at the proposed mechanism for unlocking any funds that were generated through growth on Business Rates, understanding that this would be reliant on the submission of compelling business cases by any of the partners. Officer explained that there was not considered to be a difficulty in the Council partnering with Birmingham, Solihull and others whilst at the same time maintaining a shared economic development function with both Bromsgrove and Wyre Forest District Councils.

RESOLVED that

1)         the Council participate in the Greater Birmingham and Solihull LEP pool; and

2)         the dependence of the detailed impact of the pooling arrangements on the Local Government Finance Settlement for Redditch which will not be available until December 2012 or January 2013 be noted and that, until this information is received, a final decision will not be made. Recognising this, Members task Officers to work through the detailed financial impact of the pooling arrangements in the context of the financial settlement, when received, and that the final decision in relation to the pooling arrangements be delegated to the Chief Executive and Section 151 Officer, in consultation with Group Leaders.