Not ever, I would say. As the Minister said, these are quite complex technical amendments, which, in the circumstances, I particularly welcome. Obviously, as he has indicated, they are to enable the so-called 100% business rates retention pilot authorities to come into existence next week.
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I do not think that the Minister referred to the fact that the pilots lasted for only two years, as I understand it. That comes up against the deadline for the loss of government revenue support grant, and I would like to comment on that. First, the Minister described this as a very technical document, which it is. On other occasions I have referred to the opaque way in which these changes are referenced, and perhaps the Minister will be able to explain what they all mean. For instance, one of the formulae that amends Schedule 4 reads, in Regulation 9(4):
“(A-(B+C-D-E)) x 33%”.
It would be great if those of us involved in local authority finance were able to fathom what that means, because nowhere in the document is there any reference to what any of those letters refer to. One thing that we should do in these technical documents is to make it clear what the letters in the formulae refer to. I know
that the regulations refer back to the original Act but I do not think that that is helpful for anybody who just looks at the amendments.
Secondly, the headline reference to 100% retention of business rates is misleading. It would help understanding and discussion at the end of the pilot period if that phrase were not used to describe what actually happens, which is that 100% goes out but then you have tariffs, top-ups, levies and safety nets to take into account. Certainly in some areas, those tariffs and top-ups are significant, and they change the way that we look at the delegation of business rates. Therefore, in my view we are looking not at genuine fiscal devolution but at changes in the way that business rates are redistributed. I support what is happening but we need to recognise that we are not talking about 100% due to the way that the money is divvied up.
Can the Minister provide us with some reassurance as to the progress of the fair funding review? How will the business rates retention scheme fit with that model, and how will an ever-diverging local government tax base be addressed to provide for equalisation of the funding system? This will be a challenge for government but it will be a very big headache for local authorities unless what the funding looks like and how the business rates retention scheme fits with that are made much clearer and more transparent.
Any business needs to plan two or three years ahead. We are facing 2020—which is 18 months away—when local authorities will be making decisions about their budgets, but those of us in local authorities have no idea what the funding system will look like. Will there be more—we optimists live in hope—or less, which is more likely? Where will the money come from and what will the requirements be from government for spending the ever-decreasing fund that we have?
I appreciate that these are very technical regulations and I broadly support the move towards giving local government greater control and responsibility over the funds that it has, but I look forward to the Minister’s response to some of my queries.