Agenda item

With reference to article 20 of the minute of the previous meeting of 9 March 2017, the Committee had before it a report by the Interim Director of Communities, Housing and Infrastructure which provided an update on the response of the Scottish Government to the Chief Executive’s written request calling upon the Scottish Government to further use its legislative powers to introduce a rate relief scheme which would ensure that all businesses located within Aberdeen are paying business rates no higher than their current levels.

The report recommended:-

that the Committee note the letter from the Chief Executive and the response contained within the appendices to this report.

The Convener advised the Committee to note the impact of financing a Non Domestic Rates Local Transitional Scheme with respect to the Council’s expenditure and income and the interests of persons liable to pay council tax set by the Council, as evidenced in terms of the funding required to implement the Scheme which funding he confirmed, was outlined in terms of his amendments (see below) to the recommendation.

The Committee resolved:-

(i)         to approve the recommendation;

(ii)        to note the scheme introduced by the Scottish Government regulations under section 153(3) of the Local Government etc. (Scotland) Act 1994 provides Aberdeen Businesses with business rate relief of £7.5m. Instructs the Chief Executive to write to the Cabinet Secretary asking him (1) to confirm his acceptance to allow Aberdeen City Council to receive any remaining balance of the £7.5m allocated by the Scottish Government for business Rates Relief taking into account current uptake in the scheme, and (2) to make reasonable effort to encourage take up of said business rate relief scheme;

(iii)       to note the Scottish Government set up the Barclay review group to make recommendations that seek to enhance and reform the business rates system in Scotland to better support business growth and long term investment and reflect changing marketplaces which is due to report to Ministers in July 2017 and to instruct the Chief Executive to bring forward that report once published thereafter to the first available Finance Policy and Resources Committee;

(iv)       to note that as part of the 2017/18 budget a sum of £3.1 million was set aside for a local non domestic rates relief scheme - That the committee notes that this sum was set aside within contingencies pending a response from the Scottish Government. The level of contingencies currently contained within the revenue budget is £5.1 million; and

(v)        to instruct the Head of Finance to set aside up to £4.2 million within the Council’s 2017/18 budget (being met from contingency), to be utilised for a non-domestic rates local transitional scheme(“scheme”) and to implement such a scheme that meets the criteria and terms and conditions specified below -

The scheme would give relief for the period 01/04/2017 to 31/03/2018 on increases above 14.75% (in line with the Scottish Government increase) up to a maximum award per business property, as detailed below, and provided any such award complies with state aid rules, but the scheme would not apply respect of the following properties:

(1)       Properties whose RV is less than £15,000 who qualify for 100% relief;

(2)       Properties that are already eligible for relief in the existing Scottish Government Transitional Relief package introduced on 1 April 2017;

(3)       Empty unoccupied properties;

(4)       Aberdeen and Aberdeenshire Council Properties;

(5)       Other public sector properties;

(6)       Identified properties which are exempt due to other reliefs e.g. churches or those with charitable status; and

(7)       Properties that would qualify for any other relief or relief scheme.

The total level of award will be calculated as follows:-

·                     Any relief will only be applicable on the amount payable after applying an increase above 14.75%  to the property’s rateable value in 2016/17 as notified by Grampian Joint Assessors;

·                     Full relief on any real increase will be applied on rateable values below £60,001;

·                     Relief on rateable values above £60,000 will receive up to a maximum of £3,500 relief;

·                     All relief must be applied for by 30 September 2017 as it cannot be awarded automatically.

The Scheme will be subject to such standard terms and conditions as the Head of Finance may prescribe, following consultation with the Convener and Vice-Convener of Finance, Policy and Resources Committee.