Overview

The Local Government Finance Bill aims to reform local government finance in England, primarily focusing on non-domestic rates (business rates) and introducing new powers for local authorities to raise revenue for infrastructure projects. Key changes include increased local retention of business rates, the creation of infrastructure supplements, and the introduction of a new property owner levy within business improvement districts.

Description

Non-Domestic Rates

The bill allows for 100% local retention of non-domestic rates in England, eliminating payments to the central government. It introduces mechanisms for loss payments to compensate authorities for income reductions resulting from list alterations. It also grants the Treasury power to specify indexation rates and reduce non-domestic rating multipliers. The bill provides for reliefs for rural shops, telecommunications infrastructure, and public toilets, and introduces new charitable and unoccupied hereditament reliefs. The bill also allows for electronic billing and introduces new powers for the Secretary of State to issue guidance about notices relating to non-domestic rates.

Infrastructure Supplements

The bill empowers the Greater London Authority and mayoral combined authorities to impose levies ("infrastructure supplements") on non-domestic ratepayers to fund economic development projects. Strict conditions apply, including the publication of prospectuses and consultation. The bill specifies how the funds can be used and prohibits their use for certain services. It outlines procedures for billing authorities, including notice requirements and expense allocation.

Council Tax

The bill amends the process for determining whether council tax increases are excessive, introducing more flexibility and consultation for the Secretary of State in setting principles.

Other Local Levies

The bill allows billing authorities to create property owner arrangements and impose levies within Business Improvement Districts. It also extends the power to impose business rate supplements to mayoral combined authorities.

Government Spending

The bill is projected to have a neutral impact on UK Government spending. While it eliminates central government revenue from non-domestic rates, it replaces this by creating loss payments (the exact figures for which are to be determined by future regulations) to compensate affected local authorities.

Groups Affected

• Local Authorities: Increased financial autonomy through 100% retention of business rates, but with potential for loss payments if business rates income decreases. New powers to raise funds for infrastructure projects and to impose property owner levies.
• Businesses: Potential for reduced business rates through multipliers and reliefs, but also potential for new levies (infrastructure supplements and property owner levies) depending on location and rateable value.
• Property Owners: Potential for a new levy in Business Improvement Districts (property owner levy).
• Central Government: Loss of revenue from business rates but the introduction of compensation schemes.
• Telecommunications Companies: Potential for rate relief for infrastructure.

Powered by nyModel