Agenda item

This task group has been requested by the Scrutiny Members to ensure Brent council has the knowledge and understanding to respond to the devolution of business rates policy change; achieving the best financial outcomes for the borough.

As Chair of the Task Group, Councillor Davidson introduced the report which had been put forward to review the background to the Government’s planned devolution of business rates policy and consider how Brent was currently placed to respond to both the risks and opportunities arising from this. Councillor Davidson stated that the Task Group was very pleased with the outcome of the report, and thanked his fellow task group members for the cross-party effort to address this very important issue facing the Borough.

Councillor Davidson stated the review was effective in looking comprehensively at quite a vague policy concept, and that the Task Group had taken the view that this was a tremendous opportunity for the Council to be proactive in connecting to local businesses and joining up the array of skills which residents in the Borough possess to ensure economic prosperity in Brent for future years.   He explained that the review had considered questions on various broad themes, including: central government policy; financial risk; possible impact to Brent and growth in business rate income. From the research into these specific areas, five discovery themes were established and from this the Task Group was able to make eleven key recommendations on the steps Brent should be taking to prepare for this policy coming into effect. He noted that one of the most significant of these was recommendation one within the report which specified the Council developing a robust business rates growth strategy for the whole Borough. The Committee heard that a clear strategy would help act as an incentive to attract businesses to invest in the Borough.

A Member of the Committee asked whether the policy would have a significant impact on the planning developments in the Borough. Councillor Davidson commented that the policy would likely have an impact on the planning strategy but again that it was important to consider potential opportunities. He noted that in particular the Old Oak Common Development may provide opportunities of securing development funding for surrounding areas such as Harlesden. This investment in turn may boost business activity and thereby also boost the Council’s business rates tax base. Councillor Miller added that the Council would need to think about the future level footing of business rates and council tax rates relating to planning space within the Borough. He emphasised that the income generated from business rates being devolved was expected to be higher than the income generated from council tax collection when this policy took full effect. He noted that the recommendation of a business strategy being drawn up would include the full implications for planning in Brent.

There were wider discussions from Members at this point about working closely with the Mayor of London on the direction of the spending generated from the 2% Community Infrastructure Levy, and the role this could have in rejuvenating London’s high streets, such as ones in Brent. How the proceeds of the levy were spent was noted as potentially having a significant impact on business activity and could thereby have an effect on the business rate base. Members also agreed that Brent should seek closer ties with neighbouring boroughs and collaborative organisations such as the West London Alliance and London Economic Prosperity Board as developments of this policy took shape further.

A question was also raised from a Member on whether, in terms of staff resources, the Council was in position to ensure that business rates could be collected. Councillor Davidson stated that, as it stood, he would not say the Council was adequately prepared in terms of staffing resources. He continued that the report had identified this and that one of the five discovery themes outlined the need for this to be addressed and it was vital that the Council was adequately resourced internally for when this policy came into effect. The Committee heard that the Task Group believed that the income received from the full devolution of business rates would be as important as the income received from council tax from properties across the Borough. Especially as the Revenue Support Grant from central government was in the process of being phased out. Councillor Davidson proposed an idea, rather than a formal recommendation, that the Cabinet create a specific position for Business in order to oversee this process as it took place.

The Chair asked for additional detail on what would be deemed as ‘evidence based’ in the third recommendation of the report for any future increase or decrease in the business rate tax. Councillor Davidson outlined that the current proposal was that Councils could reduce the business rate multiplier by two pence in a pound, and it was suggested that if this were planned in future then Cabinet should be transparent and produce evidence based proposals on why this was being put forward. He noted that any changes of this kind would inevitably be very significant because of the effect on the Council’s revenue.

Councillor McLennan (Deputy Leader) offered her thoughts on the Task Group report’s findings, stating that she agreed with the content. She noted that many of the areas were already being embraced by the Council in preparation for the devolution of rates coming into effect.

RESOLVED thatthe Task Group’s 11 recommendations, contained within the report, be recommended to Cabinet at a future Cabinet meeting.