05 Oct 2016

Finance and Corporate Services

B&NES, Bristol and South Gloucestershire to consider 100% business rate retention proposal

Bristol City Council and two of its neighbouring authorities have been invited to take part in the Government’s 100% business rate retention pilot, starting 2017/18.

The proposed pilot would see 100% of any future growth in business rates kept locally without penalty. Future growth may be generated by more businesses opening locally, for example.

This would be different from current arrangements where the Government deducts a levy from any growth generated above an agreed baseline.

In Bristol, it is estimated that over the first two years of the pilot, benefit from this business rate growth could be upwards of £1m.

Crucially, the Government has proposed a “no detriment” provision for the 100% pilot to ensure that, if business rate income is lower than expected, those involved in the pilot would be no worse off than had they been operating the existing 50% rate-retention scheme.

The proposals were approved by Bristol City Council's Cabinet last night (Tuesday 4 October)   Meetings of South Gloucestershire Council (Policy & Resources Committee) today, Wednesday 5 October, and an Executive decision by the Bath & North East Somerset Council’s Cabinet Member for Finance and Efficiency and will also consider the proposals. 

Pending approval by the three councils, participation would then be contingent on the proposed West of England devolution deal receiving final approval by the Secretary of State later this year. Central government is only making this 100% pilot available to those areas which have a signed devolution deal.

Mayor of Bristol, Marvin Rees says: “Given the financial challenges we face as a city, this pilot could be a valuable opportunity to secure more local control and potential income for Bristol and the wider region. I look forward to reviewing the proposals in full next week.”

It is expected that 100% business rate retention will be introduced nationally in 2020-21, and possibly as early as 2019-20.  At that point, the pilot would end and Bristol City Council, along with the other two councils in the pilot, would join the full national scheme. 

The Cabinet report can be read in full here