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Agenda item

Business Rates Retention Pilot 2018/19

Minutes:

Mr Mark Green, the Director of Finance and Business Improvement, presented a report to the Committee on the outcome of Maidstone Borough Council’s application to become part of the Kent Business Rates Retention Pilot in 2018/19. The Committee noted that:

 

·  Kent District Councils, Medway Council and Kent County Council had submitted a successful joint bid to Central Government to retain 100% of the growth of the Business Rates pool in Kent for 2018/19.

·  The retained Business Rates growth for each authority would be split into two funding pots. 70% of the funding would be distributed to precepting authorities in the form of a Financial Sustainability Fund (FSF). The remaining 30% would be assigned to a Housing and Commercial Growth Fund.

·  Maidstone Borough Council was projected to receive £640,000 under the FSF for 2018/19 only, with no guarantee of the pilot being extended for future years.

·  The report proposed that as the FSF was a one off sum, the funding be used to support one off projects that would provide longer term benefits. For example investing in capital items as well as revenue projects that had the potential to leverage in funding from other sources.

·  As well as the £640,000 FSF payment, Maidstone Borough Council would have an opportunity to secure local investments from the Housing and Commercial Growth Fund for the North Kent Cluster which was worth a projected £3.2 million.

 

In response to questions from the Committee, Mr Green confirmed the following:

 

·  The general principles of the types of projects under consideration for funding were what was being agreed at this stage, and that a list of specific projects was due to be considered at a future Policy and Resources Committee meeting.

·  The principles around the distribution of the Housing and Commercial Growth Fund had not yet been agreed by the North Kent Cluster as the governance arrangements of this element of the scheme were not part of the bid to Central Government.

·  The funding provided by the 100% Business Rates growth retention pilot bid was intended to be used to mitigate the effect of economic growth in the borough, therefore to use this funding to limit Council Tax increases would be contrary to the bid that had been submitted to Central Government.

 

RESOLVED:

 

1.  The Committee notes that Kent and Medway have been selected to carry out a 100% business rates retention pilot in 2018/19.

2.  Preliminary estimates indicating that Maidstone Borough Council may receive an additional £640,000 in Business Rates income in 2018/19 as a consequence is noted.

3.  The following parameters for the allocation of the additional Business Rates income in the 2018/19 budget are agreed:

 

  Optimising impact of FSF expenditure

 

In order to achieve maximum impact from the FSF, it is proposed that it is focused on a small number of discrete projects, distinct from existing agreed revenue and capital expenditure.  A greater number of projects would risk spreading management input into individual projects too thinly, and would lead to relatively small budgets for each project, thus limiting their potential to make an impact.

 

  Alignment with strategic objectives

 

The projects will respond to the Council’s corporate priorities.  In general, therefore, they will promote social, economic and environmental wellbeing. They are likely to relate to one or more of the three action areas – A Home for Everyone, Town Centre Regeneration and Clean and Safe.  They must also be consistent with relevant Council strategies such as the Economic Development Strategy.  Performance against corporate priorities is evaluated regularly through public engagement, eg through Resident Surveys, so it would be appropriate to consider projects that residents are likely to see as improving their quality of life.

 

  Leveraging benefit of expenditure

 

The FSF provides a relatively limited sum of money, and is only available on a one-off basis.  Accordingly, it is important that any investment of the FSF exploits the opportunities for leveraging additional income, either by creating a future income stream or by attracting a matching contribution in cash or through partnership working, eg with external organisations like central government or Kent County Council.

 

  Identification and sign-off of projects

 

Officers will develop more detailed proposals for investment of the FSF.  Further information will be contained in the budget proposals for consideration by this Committee at its meeting on 14 February.  A process will be set out in this report for project approval.

 

Voting: Unanimous.

 

Supporting documents:

 

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