Piloting the 100% business rates retention scheme (E)

A prospectus inviting a second tranche of English local authorities to apply to pilot the 100% business rate retention scheme that will fulfil the government’s manifesto commitment to give local government greater control over the money it raises has been published by the Dept for Communities and Local Government.

The successful applicants will run their pilots in 2018/19 alongside the current pilots that commenced on 1 April 2017. They will, in particular, provide an opportunity for the DCLG to test more technical aspects of 100% business rates retention, including the splits that occur in two-tier areas, where district and county councils split any increase in business rates income, with the same split proportions applying to losses of income.

Apart from DCLG’s particular interest in two-tier areas, which are not covered in the current pilot, ‘100% business rates retention pilots 2018 to 2019: prospectus’ also includes in its selection criteria the proposed pooling arrangements across a functional economic area – ie the county council(s) and relevant district councils; groups of unitary authorities; groups of county councils.

It will also assess how the proposals would promote the financial sustainability of the authorities involved and evidence of how the pooled income from growth will be used across the pilot areas.