To consider Tewkesbury being part of a Gloucestershire-wide bid to become a pilot for 100% business rates retention subject to further evaluation and consideration of the pilot details 

That authority be delegated to the Chief Executive, in consultation with the Head of Finance and Asset Management, to agree Tewkesbury Borough Council’s involvement in the submission of a Countywide bid to become a 100% Business Rates Retention Pilot  in 2018/19 subject to:

1.    the satisfactory assessment, in the opinion of the Head of Finance and Asset Management, of the benefits and risks of the pilot bid prior to making an application; and

2.    a further report to Council for full consideration of the pilot if the bid is successful and before formal acceptance of the pilot takes place.

54.1           Attention was drawn to the urgent report of the Head of Finance and Asset Management which had been circulated separately at Pages No. 1-5. Members were advised that the item had been accepted as urgent due to the fact that, as a group of authorities, Gloucestershire was actively investigating the potential to bid to become a 100% retained business rate pilot for 2018/19. This bid needed to be submitted before the end of October and the report before the Committee requested delegation to the Chief Executive and the S151 Officer to complete the assessment process and to formally enter a bid on behalf of the Council before that deadline expired.

54.2           The Head of Finance and Asset Management explained that the government had issued a 100% business rates retention pilot prospectus and an invitation for bid applications. The pilot would provide an opportunity for both the government and local authorities to explore how 100% retention could operate across different economic and geographic areas and with different types of local authority. The government was particularly keen to gain a better understanding of how this could work in a two-tier local authority area such as Gloucestershire. The prospectus indicated that the 2018/19 pilots would last for one year only and that they would need to incorporate all local authorities within the natural geographical/economical area; for Gloucestershire, that would mean Tewkesbury would need to be included within any bid even though it was not currently a member of the Gloucestershire business rates pool. Under the pilot, local authorities would be expected to forego revenue support grant and rural services delivery grant as well as other grant funding streams. The Chief Finance Officers in Gloucestershire were working with Pixel (external advisors) on estimating the likely additional amount of funding that would be retained within Gloucestershire under the 100% pilot but initial estimates had suggested approximately £17.4 million. The modelling would take into account the current level of business rates income but would also assess the financial risk from appeals, losses and changes in reliefs. A key difference for the new pilots was that the government had asked authorities to include details of how they would work together to manage risk in line with their pooling arrangements in the event that the 2018/19 pilots programme did not include a ‘no detriment’ clause. Applicants would have to make it clear whether or not they would be willing to become a 100% business rates retention pilot if the 2018/19 pilots were expected to operate without the benefit of ‘no detriment’. This was an important issue to consider as proceeding without the clause introduced additional financial risks to pilot members. In offering reassurance to the Committee, the Head of Finance and Asset Management explained that the report before it was merely to gain approval to be part of the bid should the financial assessments prove to be acceptable; if the bid was successful, and Gloucestershire was chosen as a pilot, the Council would need to consider whether or not to join.

54.3           Members were generally happy that the bid should be submitted and accordingly it was