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Business Rate Supplements Bill

My Lords, I am grateful to both noble Lords for moving and speaking to their amendments. The noble Lord, Lord Bates, indicated how strongly he feels by suggesting a possible Division of the House on his amendment and I hope that I can assuage his anxieties on that score. We have considerable sympathy with the sentiments of both noble Lords. The issue is whether the Bill needs to be amended to give effect to their points. The Government have thought seriously about these issues and the way in which we envisage the legislation being enacted meets noble Lords’ points. Of course levying authorities will need a wide range of information in the economic assessment of their proposals to be included in their BRS prospectuses. I am happy to put it on record that we expect that assessment to include consideration of the long-term viability of projects—something that businesses will be and should be only too ready to press authorities on. It cannot be expected that businesses conduct themselves without being reassured about the viability of the project and its longevity. I can also reassure noble Lords that ongoing running costs will, under the guidance which we have issued, be included in the assessment of total project costs for the purposes of determining whether a ballot is required. Business will be fully informed on that front. I want to provide reassurance on Amendment 15 in those terms. Amendment 16A, to which the noble Lord spoke, and Amendments 17 and 18, which revolve around the same areas, require the levying authority to set out in the BRS prospectus the proposed management arrangements for a project’s lifetime, and for when it has been completed. It is crucial that businesses feel that they can have confidence in the running of the project, but I do not consider the amendments to be necessary to provide this assurance. In fact, the amendments are overly restrictive and do not reflect the fact that each BRS is likely to be unique. After all, we considered an amendment a moment ago which sought to restrict the BRS to London and Crossrail. The noble Lord thinks that the BRS has unique factors. In fact, he would have restricted it to one feature. No, we want the BRS to be more available than in that example, as I indicated in my response to the proposal at that time. However, we recognise that each BRS is likely to be unique and, therefore, it is difficult to be prescriptive about what information is required in quite the way that the noble Lord and the noble Baroness suggest. The use of the BRS is likely to vary in terms of the type of project that the supplement will fund and the proportion that the BRS will contribute towards the total cost of the project. Requiring levying authorities to set out the proposed governance arrangements, once a project is completed, appears to assume that the BRS will always be used to fund, or part fund, infrastructure projects. However, in some cases, it is important that infrastructure built by use of the BRS be maintained. There is no point in building the infrastructure in the first place if there is no maintenance in the long run. That is the burden of the noble Lord’s anxiety. However, we envisage that the BRS may be used for entirely different projects, including revenue projects and for training. They may not necessarily have a legacy that involves ongoing project management and governance arrangements. Why should we be so prescriptive that local authorities can undertake with business partners only a narrow range of projects? Surely we want to make this Bill succeed and to give some flexibility on that front. Therefore, determining what, if anything, will be the ongoing needs for the management of the project can be decided only on a case-by-case basis. We need to provide levying authorities with the ability to respond flexibly to the needs of individual projects and that is why we have eschewed the concept of being overly prescriptive in the legislation. I hope that noble Lords opposite who have moved and spoken to their amendments in good faith—I respect their concerns about these issues—will also respect the Government’s position and why we need to preserve flexibility. The BRS prospectus will make it clear how those paying the supplement can expect to be kept informed about how much revenue has been raised in the BRS and how it has been spent. Paragraph 11 of Schedule 1 requires levying authorities to make it clear in their prospectus how those liable for the supplement will be informed about the expenditure incurred on a BRS project. The obligations on the levying authorities are quite clear, therefore, and we have them in the legislation. Local businesses will also understand how they will be kept abreast of the progress being made. We intend to ensure that, which is what the amendments seek. We are fully seized of the necessities that the noble Lords have suggested. The fact that the arrangements will be set out in the prospectus provides local businesses with an opportunity to give feedback on the proposed arrangements for sharing information about the progress of the project. We expect that successful BRS projects will be developed in partnerships. That is the best guarantee of the flow of information between the partners and that all those who are playing their part are fully apprised of what is involved. The appropriate level of managerial involvement with any project will depend on the specific circumstances of each individual project. To attempt to control the Government’s arrangements could lead to an overemphasis on the BRS aspects of a project. This could result in other aspects of project government related to other funding streams not being as good as they might be. I understand the concerns. It is not that the Government have not thought about these issues very seriously indeed. We want, however, to avoid overprescription and, although I cannot agree with the amendments because I believe that the Bill makes adequate provision, I agree with the logic and principles underpinning them. The Government intend to signal in guidance that levying authorities should clearly share their information in an open, timely and clear manner throughout the project and consider the right role for business in the delivery of the project. These, after all, are based upon partnership and business will in many instances have a crucial role in governance. I do not think, however, that in legislation which covers a range of projects which we cannot foresee in detail and which might embrace a range of concepts, we can or ought to be prescriptive. I hope that the noble Baroness will therefore consider that she can safely withdraw her amendment.