To approve Herefordshire Council’s application to be a pilot area for 100% business rate retention in 2018/19 in a pooling arrangement with Shropshire Council and Telford and Wrekin Council.

The cabinet member for finance, housing and ICT introduced the report. He noted that an invitation had been published by the Department for Communities and Local Government at the beginning of September for councils to apply to be included in the next set of pilots for retention of business rates. The focus for this set of pilots was to be on two-tier areas and rural councils and to look at pooling. It had subsequently been confirmed that a no detriment clause would be included so that councils taking part in the pilot could be assured that they would not be in a worse financial position than if they had not been part of the pilot. It was anticipated that being part of the pilot could result in some additional resources for Herefordshire Council.

The leader of the its our county group asked if Herefordshire stood a realistic chance of being accepted for the pilot when the main focus was on two-tier local government areas. The head of corporate finance responded that the government was also looking at pilots in rural areas which was in Herefordshire’s favour. It was impossible to know how many applications the government would receive but the proposal to work in partnership with Shropshire and Telford and Wrekin councils was a unique arrangement which it was hoped would stand out.

With regard to scrutiny arrangements the head of corporate finance confirmed that the government had only published the call for applications on 1 September and that the deadline for applications was 27 October. Clarity on the no detriment clause had only been provided two weeks before the cabinet meeting. Subsequent to that each of the three partner councils had had to consider if they wished to proceed with a proposal application. Consequently it had not been possible to gather information and establish a proposed course of action in time to have the item considered by the general scrutiny committee before coming to cabinet. The deputy monitoring officer provided confirmation that the constitutional requirements for special urgency had been met and that, in coming to a judgement on this matter, weight had been given to the fact that the decision would not commit the council beyond the submission of an application.

The leader of the council stated that the role and importance of scrutiny was recognised and this was why the recommendation at this meeting was only to approve the expression of interest to DCLG. It was further recommended that the general scrutiny committee consider the arrangements for the pilot in the event that Herefordshire was successful in its application, before cabinet made a final decision on participation in the pilot.

The leader of the liberal democrat group expressed support for making the application.  He queried the figures in the table on pages 38 and 39 of the agenda pack (paragraph 24 of the report). It was confirmed that the forecast gain from full rate retention pilot was £2.7m as stated, being the difference between the forecast income total if not a pilot (£42.6m) and the total forecast income if a pilot (£45.2m).

Resolved that:

(a)  the chief financial officer be delegated authority to submit an application for Herefordshire Council, together with Shropshire and Telford and Wrekin councils, to be a 100% business rate pool pilot area for 2018/19; and

(b)  general scrutiny committee be requested, should the application be accepted, to consider the implications for Herefordshire of operating such a pool and to make any such recommendations as it feels appropriate to inform a further decision on participation.