• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • Inflation ‘biggest concern for LGPS professionals’

    May 20, 2022

  • LGA calls for government support as regulators face staffing issues

    May 19, 2022

  • WMCA signs £4bn investment agreement with L&G

    May 18, 2022

  • Bill will give UK Infrastructure Bank power to lend directly to councils

    May 18, 2022

  • £400bn pension group collaborates on climate transition initiative

    May 17, 2022

  • CIPFA rejects proposal for vote on publication of fraud hub report

    May 17, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

LGA disappointed over government’s lack of direct measure of business rates appeals

0
  • by Colin Marrs
  • in 151 News · Technical
  • — 24 Jan, 2019

The Local Government Association has expressed disappointment that the government has not created a method of accurately compensating councils for losses resulting from business rate appeals.

In a consultation released before Christmas, the Ministry for Housing, Communities and Local Government proposed the use of a “proxy” mechanism to work out provisions against valuation changes.

In its response, the LGA said that it supported the government’s aim of removing the risk of appeals on local authorities by using a centrally managed appeal system.

However, it added: “It is disappointing that there is not a direct measure of losses due to appeal.

“We agree that, in the absence of a more direct measure, that a proxy (which assumes that valuation changes not backdated to the start of the list are classified as physical changes) may be the only viable option.

“We note with disappointment that MHCLG, and experts in the sector, have not been able to find a workable method to mitigate the impact of provisions on authorities’ day to day ability to spend.”

In its consultation, the MHCLG said that the proxy would top-slice business rates income in order to compensate all changes to an authority’s local list backdated to the beginning of the revaluation cycle, as a “valuation only change”.

Changes not backdated to the start of the list would be classified as physical changes and not compensated.

It said: “Although any proxy cannot be 100% accurate, in the absence of better information, the Government believes that this proxy represents the best way to ensure that authorities are fairly compensated for valuation change outside of their control.”

The LGA also gave cautious support to a proposal to reform the way the forthcoming business rates retention system is administered.

The reform would use local authorities’ own estimates of their income from business rates, after provisions, to set an accurate business rates baseline each year.

The government consultation said: “The result will be that each local authority will have certainty each year that their income net of provision will be equal to their needs assessment.

“Accordingly, provisions will no longer adversely impact on an authority’s income, and any perverse incentive to underestimate provisions in order to protect income levels in the short-term will be removed.”

In response, the LGA said: “The LGA notes that this appears to be the only method that can deal with the impact of appeals on local authorities under business rates retention.”

However, it said that the new system requires further exploration and modelling, and needs to be explained better and operated in a transparent way.

The LGA also called for more modelling of the impact of a proposal to introduce phased resets of business rates baselines used to calculate the amount of business rates growth councils can retain.

“The LGA can see the merits of phased resets as they would allow local authorities to keep the benefits of growth for a defined period, they would avoid cliff-edges and allow for planning,” the response said.

A blog post by the Institute for Fiscal Studies said that the principle of rolling resets was welcome.

It said: “The valuations are made by the Valuation Office Agency not councils,so risk associated with appeals is a risk outside of councils’ control.

“And our analysis has shown that these risks can be substantial.”

Commenting on the consultation, Paul Dossett, head of public sector assurance at accountancy firm Grant Thornton, said: “It is important that the government has recognised the volatility in the provisioning for appeals. 

“Some of the risk for councils would be further offset by the Valuation Office determining appeals in a more timely manner”.

Get the Room 151 Newsletter

Share

You may also like...

  • Stephen Sheen: Audit predictions 2021 27th Jan, 2021
  • CIPFA under pressure to publish fraud hub report 26th Apr, 2022
  • Audit improves but problems and uncertainties remain 4th Nov, 2021
  • Local authorities need to ‘invest in finance teams’ 27th May, 2021

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 1 day ago

    2022 LGPS valuations: difficult discussions in uncertain times: Michelle Doman looks at the impact of inflationary pressures, the war in Ukraine, climate risk and Covid-19 on employer contributions. At the start of 2022, for Local Government Pension… dlvr.it/SQlvy9 pic.twitter.com/Dd0lrHjWNb

    Room151 1 day ago

    Investing today: nowhere to hide: Partner Content: Alex Stanley from Ardea Investment Management suggests that investors have few places to hide amid a synchronised sell-off in both bonds and equities. However, there are catalysts that[...] dlvr.it/SQlNVC pic.twitter.com/KkGGnduzPL

    Room151 2 days ago

    Treasury to restrict PWLB loans to councils at risk of non-repayment: The Treasury has released new guidance that restricts local authorities’ access to Public Works Loan Board (PWLB) advances if there is a “more than negligible risk” of a council’s… dlvr.it/SQhLTV pic.twitter.com/vBsS7xMJdb

    Room151 2 days ago

    Mixed reaction to proposed government intervention powers: There has been a mixed reaction to the government’s legislative plans to strengthen its intervention powers over local authority finances. The Levelling Up and Regeneration Bill has proposed… dlvr.it/SQhLMB pic.twitter.com/50foWxpPGs

    Room151 2 days ago

    Post-Brexit struggles for national and local government regulators. @LGAcomms @NAOorguk Click the link below to read 🔻🔻 room151.co.uk/brief/lga-call… #Brexit #government pic.twitter.com/s3c8ySGy5G

    Room151 2 days ago

    CIPFA: a question of transparency: Roman Haluszczak’s campaign for publication of the independent report into the collapse of CIPFA’s London Counter Fraud Hub has been rejected again by the institute. He is now calling for[...] dlvr.it/SQgC5V pic.twitter.com/08fWsHFF4g

    Room151 3 days ago

    Back to the future for the PWLB: The Public Works Loan Board is tightening its lending criteria to ensure that loans will be repaid by local government borrowers. But, asks Peter Findlay, shouldn’t they have been doing[...] dlvr.it/SQcmmm pic.twitter.com/bVv4fe0Xlv

    Room151 3 days ago

    Great piece from Peter Findlay on the PWLB’s tightening of its lending criteria. He raises some pointed questions for the Treasury and explains why the ‘casino council’ characterisation was simplistic and inaccurate. #PWLB #localgov room151.co.uk/treasury/back-…

    Room151 3 days ago

    The Queen's speech highlighted the need for accelerating UK infrastructure investment into levelling up projects and cutting emissions. @UKInfraBank #QueensSpeech #ClimateAction #emissions Click the link below to read 🔻🔻 room151.co.uk/brief/bill-wil… pic.twitter.com/hFmF2veVIa

    Room151 3 days ago

    Huge funding heading to the @WestMids_CA from @landg. @andy4wm #LevellingUp #netzero #regeneration Click the link below to read 🔻🔻 room151.co.uk/brief/wmca-sig… pic.twitter.com/ajhZhia6mx

    Room151 3 days ago

    LGPS governance, Cagney and Lacey style: What regulatory response can be expected following the publication of the Good Governance project’s Phase 3 report and the closure of the Single Code of Practice consultation? Susan Black offers[...] dlvr.it/SQbfXf pic.twitter.com/xwqHOEu2AP

    Room151 4 days ago

    More evidence of the importance of emerging markets in the journey to net-zero. @BordertoCoast @BrunelPP @northernlgps @EAPensionFund @WYPF_LGPS Click the link below to read 🔻🔻 #LGPS #NetZero #NetZeroCarbon #EmergingMarkets room151.co.uk/brief/400bn-pe… pic.twitter.com/qCm0EGxzLn

  • Categories

    • 151 News
    • Agent 151
    • Audit
    • Blogs
    • Business rates
    • Chris Buss
    • Cllr John Clancy
    • Council tax
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Education
    • Forum
    • Funding
    • Governance
    • Graham Liddell
    • Housing
    • Ian O'Donnell
    • Infrastructure
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • Levelling up
    • LGPS
    • Mark Finnegan
    • Net Zero
    • Private markets
    • Recent Posts
    • Regulation
    • Resources
    • Responsible investing
    • Richard Harbord
    • Risk management
    • Social care
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Transport
    • Treasury
    • Uncategorized
    • William Bourne
  • Archives

    • 2022
    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Spelthorne rejects claims of auditor concerns about its investments
  • Next story Little time left for detail needed over funding

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares