Upload
bertram-garrison
View
220
Download
0
Embed Size (px)
Citation preview
Financing Growth in Local Authorities
Alison ScottAssistant Director, Policy and TechnicalCIPFA
cipfa.org.ukwww.cipfa.org
Business Rates Retention
cipfa.org.ukwww.cipfa.org
Non-Domestic Rates - current
Ratepayers Collection Fund
Billing AuthorityGeneral Fund
Preceptors
CentralGovernment
cipfa.org.ukwww.cipfa.org
Non-Domestic Rates - current
Ratepayers Collection Fund
Billing AuthorityGeneral Fund
CentralGovernment
Preceptors
cipfa.org.ukwww.cipfa.org
Non-Domestic Rates - Proposed
Ratepayers Collection Fund
Billing AuthorityGeneral Fund
CentralGovernment
Preceptors
cipfa.org.ukwww.cipfa.org
Non-Domestic Rates - Proposed
Ratepayers Collection Fund
Billing AuthorityGeneral Fund
CentralGovernment
Preceptors
cipfa.org.ukwww.cipfa.org
Overview – Separate Fire Authority
Rates Distribution
Preceptor
Central
Billing
Fire
cipfa.org.ukwww.cipfa.org
Baselines, top-ups and tariffs
Non-Domestic Rates baseline Average of contribution to pool over five years
Compared to the spending baseline Top-up or tariff determined
Set out in LGF Report
cipfa.org.ukwww.cipfa.org
Safety Nets and Levies
Safety net payable if resources fall below 90% or 92.5% of baseline Threshold currently being consulted on Payable “on account” at start of the year
Levy net on “excessive growth” Individual rate for each authority so that 1%
growth in business rate = 1% growth in retained resources
Cash paid in the following financial year
cipfa.org.ukwww.cipfa.org
Budget Setting
Set at the beginning of the year Payments will not vary
Changes in collection will come through as deficit or surplus on the Collection Fund
As a result will require formal approval process similar to Council Tax Base
Levies and safety net adjustment made in following year, cash comes through in surplus/deficit in collection fund.
Accounting different and complicated.
cipfa.org.ukwww.cipfa.org
Put it all together...
Ratepayers Collection Fund
Billing AuthorityGeneral Fund
CentralGovernment
Preceptors
cipfa.org.ukwww.cipfa.org
TIF, New Homes Bonus, Community Infrastructure Levy
cipfa.org.ukwww.cipfa.org
Tax Increment Financing
Mechanism through which Councils borrow against predicted growth in their locally raised business rates and use that borrowing to fund key infrastructure and other capital projects.
Been used in the USA for decades
However…
For long term viability TIF works best in a growing national economy
Levy payments and short reset periods may restrict the usefulness of TIF arrangements
cipfa.org.ukwww.cipfa.org
New Homes Bonus Top sliced level of grant support to encourage the
building of homes NHB will be funded within the Spending Review
control totals Those who build above the national average will see
funding increased and those who build below will see funding reduced
The funding is not ring fenced and can be used for either revenue or capital purposes.
It includes an affordable Housing premium (£350 per unit in 2012-13) to encourage this type of Build
http://www.communities.gov.uk/housing/housingsupply/newhomesbonus/newhomesbonusquestions
/
cipfa.org.ukwww.cipfa.org
Community Infrastructure Levy New levy that local authorities in England and Wales
can choose to charge on new developments in their area.
The money can be used to support development by funding infrastructure - for example new or safer road schemes, park improvements or a new health centre.
It applies to most new buildings and charges are based on the size and type of the new development.
The Community Infrastructure Levy (Amendment) Regulations 2011 came into force on 6 April 2011.
The levy is normally collected for the charging authority by the authority that grants planning permission district and metropolitan councils; unitary
authorities;
cipfa.org.ukwww.cipfa.org
Community Infrastructure Levy
Charging schedule. Supported by evidence, such as the economic viability
of new development and the area’s infrastructure needs.
One standard rate or specific rates for different areas and types of development.
Differential rate must be justified by the economic viability of new development.
Charging authorities must consult. The charging schedule must also undergo a public
examination by an independent person before the charging authority can formally approve it
cipfa.org.ukwww.cipfa.org
Community Infrastructure Levy
Planning obligations will continue For example, new affordable housing will continue to
be delivered through planning obligations rather than the levy.
Reforms have been introduced to restrict the use of planning
obligations. Some of these have already come into effect and others will take effect from April 2014 – or as soon as a charging authority starts to charge the levy.
After April 2014, planning obligations can no longer be used as the basis for a tariff to fund infrastructure.
Any Questions?