Agenda and minutes

The Chair welcomed all present to the meeting and read out the Building Evacuation Procedure.

To receive any declarations of interest.

There were no declarations of interest received at this point in the meeting.

The minutes of the meeting of the Economic Development, Environment and Infrastructure Scrutiny Panel held on 8 December 2022 were taken as read and approved as a correct record.

The Head of Finance and Investment will be in attendance to provide the Panel with information in relation to Business Rates Pooling.

RECOMMENDATION: that the Panel determine whether further information is required.

The Head of Finance and Investment gave a presentation in relation to Business Rates Pooling.  Business rates were a key funding source for the Council and a complex topic.  Essentially business rates were an occupation tax on companies that occupied premises.  There had been different ways of collecting and distributing business rates and it was a source of Council funding.  Middlesbrough Council acted as the Billing Authority for the collecting income from all business properties in the Borough.

The basis of the business rate charge was the rateable value of the property based on a multiplier in the pound.  The Government’s Valuation Office determined and set a comparable rateable value for every property.  The Valuation Office had criteria including floor space, type of occupation, and age of the building to set the rateable value.  The multiplier was set by the Government each year in the Fiscal Statement.  The multiplier for a business was currently 49.9 pence in the pound and for a small business 48.5 pence in the pound.  

The national valuation was updated every 4 to 5 years and the Valuation Office would inspect certain properties and re-assess them.  For example, if the use of the property had changed.   Like for like uses might be inspected every few years.  The Council needed to keep track of properties that were empty or where business uses had changed.    Initially no business rates were payable on an empty property for the first twelve months but the charge then doubled.

The Government’s business rates multiplier usually increased by the rate of inflation each year.  However, since inflation was currently around 10%, the Government had frozen the multiplier to try and protect businesses.

Prior to 2013, every business premises had a rateable value and a national multiplier was used to calculate business rates.  The Council, as the Billing Authority, would collect that amount and give 100% to the Government.  The Government would then redistribute the money collected based on population.  This meant there was no relationship between business rates and growth in the local area. 

In 2013 the Government established Business Rates Retention; so if businesses grew in the area, the Local Authority could keep some of that growth.  The rateable value of Middlesbrough was about £95 million, so around £45 to £50 million was collected.  50% of the business rates collected was paid to the Government, 1% to the Fire Authority and 49% retained by Middlesbrough Council, which equated to around £24 million.  As part of the local government finance settlement, if Middlesbrough went below the safety net of £24 million the Government would provide a top up grant.  A levy charge would be made if that amount went higher.

In 2013 Middlesbrough Council was collecting around £40 million in business rates and was now collecting around £30 million.  The rateable value and the amount being collected was now significant lower and the Government protected the Council once the amount dropped below 10% of the original starting point. 

Payments collected on business rates  ...  view the full minutes text for item 22/54

The time and date of the next meeting of the Economic Development, Environment and Infrastructure Scrutiny Panel was confirmed as Wednesday 15 February 2023 at 10.30 am.

The Chair will provide a verbal update on matters considered at the meeting of the Overview and Scrutiny Board held on 12 January 2023.

Items considered at the meeting of the Overview and Scrutiny Board held on 12 January 2023 were:

·        Executive Forward Work Programme.

·        Executive Member Update – Neighbourhood Safety.

·        Scrutiny Chairs’ Updates.

Middlesbrough Council Motion No. 153 – Toxic Chemicals in the River Tees

The Department for Environment, Food and Rural Affairs had commissioned an independent expert assessment of the unusual crustacean mortality in the north east of England in 2021/2022.   A report from the Crustacean Mortality Expert Panel (CMEP) was currently awaited.

Members were extremely concerned in relation to the impact on both fishermens’ livelihoods and the damage caused to marine life, which was potentially linked to the dredging taking place in the River Tees for the provision of a deep water berth at Teesport. 

A further update would be provided at the next scrutiny panel meeting.