Agenda item

Business Rate Localisation and Rate Relief

13.1

It was moved by Councillor Colin Ross, seconded by Councillor Ian Auckland, that this Council:-

(a)      welcomes the news in the budget that small businesses will be exempt from paying business rates, which had been called for before the budget by Liberal Democrat leader, Tim Farron MP;

(b)      believes that small businesses are at the heart of every local economy and by taking them out of paying business rates, they will have more time and money to invest in growing their businesses and employing more local people;

(c)      however, is concerned with the impact this will have on local government finance, when retention of business rates replaces the Local Government Finance Settlement local government is set to lose nearly £2 billion in 2020;

(d)      notes the Chancellor made no commitment to making up the shortfall from business rates to councils in the future;

(e)      believes the tax rate relief for small businesses needs to be funded sustainably and there must be measures introduced to redistribute business rate income so areas with low business rates are not penalised; and

(f)       therefore, calls on the Administration to pull together a cross-party delegation to go and speak to the Treasury to voice our concerns about these potential hidden cuts to local government funding.

13.2

Whereupon, it was moved by Councillor Julie Dore, seconded by Councillor Leigh Bramall, as an amendment, that the Motion now submitted be amended by the deletion of all the words after the words “That this Council” and the addition of the following words:-

(a)       believes small businesses to be the backbone of the economy, and believes the Government should be doing more to create a supportive environment in which small businesses can grow and create jobs;

(b)       however, is concerned that the changes made to Business Rate thresholds in the Budget has the potential to restrict the financial capacity of local authorities to invest in public services once Business Rate income is fully devolved;

(c)       welcomes Business Rate localisation, but calls on the Government to develop a model for Business Rates that ensures that local authorities have appropriate funding capacity to deliver local public services;

(d)       is concerned that the transition from the current grant funding model to full Business Rate localisation will create significant risk for local financing and notes the Administration’s commitment to work with Government to ensure Sheffield does not suffer a ‘cliff-edge’ effect between 2019 and 2020 which could have major implications for local services;

(e)       believes there must be a redistributive mechanism built into the new model to ensure that all places have the necessary funding to deliver services; and

(f)        notes that the Administration is in dialogue with the Treasury through the Core Cities group to better understand the implications of full localisation of Business Rates.

13.3

On being put to the vote, the amendment was carried.

13.4

The original Motion, as amended, was then put as a Substantive Motion in the following form and carried:-

RESOLVED: That this Council:-

(a)      believes small businesses to be the backbone of the economy, and believes the Government should be doing more to create a supportive environment in which small businesses can grow and create jobs;

(b)      however, is concerned that the changes made to Business Rate thresholds in the Budget has the potential to restrict the financial capacity of local authorities to invest in public services once Business Rate income is fully devolved;

(c)      welcomes Business Rate localisation, but calls on the Government to develop a model for Business Rates that ensures that local authorities have appropriate funding capacity to deliver local public services;

(d)      is concerned that the transition from the current grant funding model to full Business Rate localisation will create significant risk for local financing and notes the Administration’s commitment to work with Government to ensure Sheffield does not suffer a ‘cliff-edge’ effect between 2019 and 2020 which could have major implications for local services;

(e)      believes there must be a redistributive mechanism built into the new model to ensure that all places have the necessary funding to deliver services; and

(f)       notes that the Administration is in dialogue with the Treasury through the Core Cities group to better understand the implications of full localisation of Business Rates.