Draft Non-Domestic Rating (Rates Retention: Miscellaneous Amendments) Regulations 2023

Nick Smith Excerpts

Monday 27th February 2023 General Committees

[Lee Rowley]

It is an accommodation within the existing regulations, as I understand it, given that the City of London is incredibly atypical in having large service requirements but a very low residential population. There has to be an accommodation somewhere in the processes for the realities in the City of London to ensure that it can still support the services it needs to provide for those visiting, living and working within the City.

[Nick Smith (Blaenau Gwent) (Lab)]

Does the Minister have an estimate of the benefit to the City of London of the particular opt-out that it enjoys?

[Lee Rowley]

I do not have an estimate, but I am happy to write to the hon. Gentleman with it. The principle behind the change has been in place for a number of years. As a result of freezing the multiplier, we are simply seeking to ensure the continuation of the situation that would otherwise occur had we changed the multiplier.

The regulations make changes to the non-domestic rating regulations on the basis of distribution of the levy account. I said a moment ago that safety net payments made to authorities whose business rates income has declined are paid for in part by a levy on those who have experienced growth. All levy and safety net payments are made to or from a levy account. Any surplus on that account can at year end be repaid to local government or carried forward against future deficits. If it is repaid, it is distributed to authorities as set out in the basis of distribution regulations. The changes we are making to those regulations pick up the changes to the structure of local government. They also ensure that those authorities will receive a share of the £100 million surplus held in the levy account that the Government announced in the local government finance settlement that it would be redistributing back to local authorities this year.

Although the changes are relatively technical in intent, they make a number of critical changes to the administration of the business rates retention scheme. Without them, authorities would find themselves without the income from the rates retention scheme that they anticipate and according to which they have budgeted. I commend the regulations to the Committee.