Friday, April 11, 2014

News: Rotherham rewarded for business rates growth

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Rotherham has seen an increase in business rates income of £2m over the last financial year, an indication that the local economy has picked up.

Local councils collect Non Domestic Rates (business rates) from the owners and occupiers of commercial properties on behalf of central Government. Rotherham Council has reported a collection rate of 98.2 per cent for 2013/14 which resulted in £73.5m being collected compared with £71.5m the previous year.

The Government introduced a business rates retention scheme from April 2013 aimed at providing a direct link between business rates growth and the amount of money councils have to spend on local people and local services. Under the new scheme, Rotherham Council will be able to keep a proportion of the business rates revenue as well as a proportion of the £2m of revenue growth.

The Local Government Chronicle (LGC) has been analysing business rates estimates from local authorities which shows that they expect to bring in £26.79bn in 2014-15, a drop of £132m from the £26.92bn they forecast for the previous year. Actual figures for 2013-14 will not be known until later this year.

The LGC analysis shows a mixed picture with 158 authorities expecting an increase in income but 168 authorities are predicting a decline.

With a number of recent large scale lettings in the borough such as Parcelforce and KP Nuts, coupled with planned retail developments at Cortonwood and Parkgate, and the large Tesco store in Rotherham town centre, Rotherham may well see a further increase in 2014/15.

However, Enterprise Zone (EZ) status will have an impact on business rates given that some sites in Rotherham offer a business rate discount worth up to £275,000 per eligible business over a five year period. In addition, all business rates growth within the zone for a period of at least 25 years will be shared and retained by the local area, to support the Sheffield City Region Local Economic Partnership's economic priorities and ensure that EZ growth is reinvested locally.

The EZ already includes a number of key employment sites in Rotherham such as areas of the Advanced Manufacturing Park (AMP) and Templeborough and 15 hectares at Dinnington was recently given EZ status.

Rotherham Council said that the increase in business rates and improved collection figures for Council Tax meant that it had a total of £6m to spend on frontline services at a time when it is having to cut its budget.

Last month, the Government's current system of business rates was deemed not fit for purpose by a committee of MPs. A review of the system is underway focusing on: how property is valued; how often property is valued; how business rates bills are set; how business rates are collected and how information about ratepayers and business rates is used.

Images: Caddick Construction

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