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Business Rate Supplements Bill

The Bill was amended in the other place on Report, so a ballot is required before any business rate supplement can be levied or any existing business rate supplement can be varied. Due to amendments 8 and 9, which we will come on to, a ballot will not be required for the BRS that will form part of the Crossrail funding package. The Government recognise that the BRS will not work unless there is a strong and effective partnership between the levying authority and local businesses. Throughout the passage of the Bill, we have made it clear that we expect levying authorities to engage with local businesses in the development of the BRS and to continue engaging with business once the project is under way. To provide further reassurance on this point, we committed on Report to the statutory guidance making it clear that levying authorities must consider how they will engage with businesses over and above the statutory consultation. The appropriate approach to engagement, however, will depend on the nature of the project that BRS will be funding and the partnership arrangements that already exist between levying authorities and their local businesses. For that reason, we should leave levying authorities to work responsibly with their local businesses in developing BRS projects, rather than prescribing from Westminster how this should be done. We should trust our local authorities. During the Public Bill Committee evidence sessions, Councillor Knight, speaking on behalf of the Local Government Association, said:""The guarantee to local businesses that this power will not be abused is the guarantee that we are accountable to local communities. We have a direct interest in ensuring that local economies are maintained and sustained...No authority will make a decision that has a detrimental effect on its local business community."––[Official Report, Business Rate Supplements Public Bill Committee, 20 January 2009; c. 65-75. Q250]" The Government's position is that a ballot should be held in those cases where the supplement will fund more than one third of the estimated total cost of a project and it ensures that where businesses will be contributing a relatively large proportion of that project, they will have the power vote on whether they make that contribution. If business votes against, the BRS will not happen. However, when businesses will contribute a smaller, although important, element towards the costs of a project, a judgment should be made locally on whether a ballot is appropriate. That is proportionate and reasonable, given that BRS revenues will contribute the lion's share of a project's funding in some cases, but a relatively small proportion in others. Requiring a ballot, even in cases in which the supplement is funding a relatively small proportion of a project, potentially places undue emphasis on one aspect of a project. For example, a levying authority might propose to fund 10 per cent. of a project through a BRS. If the authority engaged with businesses at an early stage about the proposed project and business rate supplement and secured their support, and if that was then borne out through consultation, it would make no logical sense to require the authority to go through the process of holding a ballot. It should be made clear that a ballot will not be a quick or cheap process. There should be no need for a ballot on a short-term business rate supplement that will fund a relatively small proportion of a project supported by business. The expense would be disproportionate, and in some cases simply could not be justified. That could result in a totally artificial discouragement to levying authorities to use BRSs in cases in which doing so would make a real and positive difference to an area.