Business Rate Supplements Bill

Amendments 8 to 10 would allow all levying authorities to pass their BRS revenues on to any other body to spend on the BRS project. Amendment 32 would require a new levying authority to set out in the prospectus the governance structure. Both sets of amendments deal with accountability and openness, as well as with good project management. I know that the noble Baroness understands very well the arrangements that apply in London and underpin Amendments 8 to 10, so I can save at least three pages of speaking notes because I do not need to explain to her how London works. Suffice it to say, in moving swiftly to paragraph 7, that the same arrangements do not apply outside London. The levying authorities are obviously more constrained in how they deliver BRS-funded projects. The key thing—the noble Lord, Lord Bates, made this point—is that the provisions of the Bill are very much about reflecting local structures. They are not about stifling possibilities for joint working and collaboration. This is, after all, a partnership, and accountability is key. It is obviously essential to have a clear account of how money that is collected from ratepayers for a BRS project is spent, and we have had to make special arrangements in the Bill for the GLA because of the unique way in which the different functions operate in London. Obviously we do not need to make the same provision for local authorities outside the capital. Joint working in any local authority will depend on what body the levying authority wishes to work with, what the relationship is, whether that body has the capacity to hold funds in its own right and how its existing capabilities can be turned to the advantage of the BRS. We are not inventing anything new; we are simply maximising the possibilities presented by what is already there. Local authorities already have variable powers to enter into partnerships and to spend money on them. That includes providing financial assistance. Nothing is ruled out that I can see, as long as it is set out in the prospectus with a clear account of how the powers, functions and money will be used to secure the objects that everyone has signed up to. That really is a very flexible and pretty robust set of possibilities. Obviously the key to all this and to credibility will be accountability and people, particularly the business partners, being satisfied that the arrangements are robust. They are going to need to know that, and that will have to be demonstrated to them in a way that is both transparent and credible. As part of the accounting arrangements, the Bill requires all levying authorities that impose a BRS to keep a specific BRS revenue account for each BRS that they operate. That will ensure there is a clear means of identifying income and expenditure, and we will certainly make that clear in regulations. We will consult shortly on those regulations, which will set out what we propose for the whole set of accounting arrangements: what must be credited, what must be debited, and so on. Credits will include BRS revenues for the year, and debits will include expenditure on the project. I hope that that indicates the flexibility we are looking for and that will ensure that the project is constructed with the greatest possible chance of success and will fit in with the local arrangements and partnerships. Amendment 32 seeks to ensure that levying authorities include in the prospectus information on project management and governance. I entirely agree with what the noble Baroness said about the importance of good project management, because businesses need to have confidence in the way in which the project is managed. They need to be kept informed about the progress that is being made and the costs that are being incurred. I know that the amendment is probing, but it is overly restrictive and does not reflect the fact that each BRS will be different. Indeed, each BRS might be only a minor part of a much wider funding package. The same aim could be achieved through other more flexible means that would allow levying authorities to tailor the approach to the specific needs of the project and the local community. Importantly, the BRS prospectus will have to make it clear how those who are paying the supplement can expect to be kept informed about how much revenue has been raised through the BRS and how this money has been spent. Paragraph 11 of the current Schedule 1 requires levying authorities to make it clear in the prospectus how those liable for the supplement will be informed about the expenditure incurred on a BRS project, and about how they will provide updates on the work that has been completed. That will be a very clear indication of progress. Businesses will not be kept in the dark. The guidance that will accompany the Bill makes clear that it is right—it is fundamental; it is written into the basic assumptions of the White Paper—that businesses must be involved. They will not commit unless they clearly understand the nature and expectations of the project. That must mean that they understand the wider governance of any project. Local situations are very different, with different funding streams. We must leave it to local discretion how BRS will fit in to and be part of any governance structure. Surely noble Lords will agree that it is better for the accountability and management arrangements to be decided case by case. The levy authorities, in partnership with the key stakeholders, are best placed to decide what approach to governance is appropriate for each project, because they will truly understand their nature and scope. The noble Lord referred to the City Challenge project, which was hugely successful, but there are many different projects with different forms of governance. The New Deal for Communities is a more recent example of such local organisation. We cannot determine such things centrally; we should not try. I know that noble Lords would not want to be prescriptive. Transparency is crucial. That is why the Bill requires that the prospectus states how and when money will be spent. Any successful project involving local business will want to consider the skills and talents available, and we would expect all aspects of that to be developed, with local business being the key driver. I am happy to signal that appropriate involvement is vital and that any locally important project must demonstrate the involvement of local stakeholders. I would be very surprised if that was not part of a BRS prospectus. We do not need to lay down a model to be imposed on diverse local circumstances. I hope that the noble Baroness will feel that that answers most of her questions.