§ Mr. Key
We have today issued a consultation paper on proposals which would mean that private sector companies winning contracts to carry out defined activities would, when the previous occupier of the premises was the local authority, be eligible for transitional relief under the new non-domestic rating system.
These proposals are intended to restore competitiveness for private sector companies bidding for local authority contracts under the terms of the Local Government Act 1988.
Under the present rules, transitional relief is generally lost when there is a change of occupier of a building. This means that private sector firms tendering to take over work previously done by a local authority would have to include the higher costs of the full rates bill in their bid. The new rules would put them on an equal footing.
It would not be necessary for an authority's direct services organisation to participate in the tendering process for a firm to qualify for relief, but relief would cease if there were any further change of occupation.
We would propose to introduce the necessary regulations as soon as possible after consultation. I have placed a copy of the consultation paper in the Library.
My right hon. Friend the Secretary of State for Wales is carrying out a similar exercise and a copy of his consultation paper has also been placed in the Library.