§ The Minister for Local Government, Regional Governance and Fire (Mr. Nick Raynsford)
On Wednesday 19 November 2003, I presented the provisional local government finance settlement for 2004–05. Included in the announcement was the 7WS amount available of non-domestic rates in England for 2004–05 to be redistributed to local authorities. This statement details the calculation of the distributable amount and announces provisionally the non-domestic rate poundage (multiplier) for 2004–05 as 45.6 pence.
£million 2001–02 Outturn 2002–03 Outturn 2003–04
1. Income from local lists Multiplier (p) 43.0 43.7 44.4 45.6 Gross rate yield in respect of current year 16,952 17,195 17,200 17,400 (i)Reliefs (a) Net Transitional Relief -493 -182 -93 -110 (b) Empty or partly occupied properties -1,049 -1,144 -1,147 -1,160 (c) Charitable -583 -603. -616 -622 (d) Rural shops and post offices -5 -6 -6 -7 (e) Community amateur sports clubs - - - -8 (f) Discretionary -43 -42 -46 -49 Net rate yield in respect of current year after reliefs 14,778 15,219 15,292 15,444 (ii) Collection costs and other reductions to contributions (a) Costs of collection -84 -84 -84 -84 (b) Losses on collection -95 -106 -120 -121 (c) City of London offset -7 -7 -7 0 Total contribution in respect of current year 14,592 15,023 15,082 15,238 (iii) Prior year adjustments (a)Interest on repayments -70 -50 -42 -38 (b) Repayments -270 -479 -472 -429 Net rate yield from local lists 14,252 14,484 14,568 14,771 2. Income from Central list Net central list yield 1,049 l'O44 1,045 1,050 3. Income from the former Crown list Contributions in lieu of rates 12 8 9 9 Total yield 15,313 15,536 15,622 15,830 4. Exchequer Contributions Exchequer contribution towards transitional relief 262 41 0 77 Total NNDR pool payments (= 1+2 + 3+4) 15,575 15,577 15,622 15,907 5. Adjustments Surplus brought forward -305 134 -915 -893 Combined total 15,270 15,711 14,707 15,014 Distributable amount 15,136 16,626 15,600 15,000 Surplus carried forward 134 -915 -893
The above calculation involves estimating several figures that are inherently difficult to forecast accurately, such as the gross rate yield and the prior year adjustments. The resulting figure of £15.014 billion has therefore been rounded to £15 billion exactly to avoid spurious accuracy.
For 2001–02 and 2002–03 the amounts shown are those recorded in the outturn (NNDR3) returns. For 2003–04 the amounts shown are the provisional outturn for the year based mainly upon authorities' provisional contributions to the non-domestic rating pool. For 2004–05 the estimates are based on:
- 1. Item 1: The gross calculated rate yield represents the total value of non-domestic hereditaments on local rating lists adjusted in relation to previous years outturn information regarding the gross rate yield times the multiplier.
- 2. Item 1(i)(a): The transitional decrease adjustment includes the estimated amount of rates that will not be recouped from local list ratepayers under the transitional arrangements made by egulations under section 58 of the Local Government Finance Act 1988 and the transitional relief scheme, announced by written PQ on 25 November 1999, Official Report, column 770W.
- 3. Item 1(i)(b): The empty property relief adjustments include voids and partially occupied hereditaments. The 2004–05 figure includes an allowance for the increase in the gross rate yield.
- 4. Item 1(i)(c): Charitable rate relief. The 2004–05 figure includes an allowance for the increase in the gross rate yield.
- 5. Item 1(i)(d): Rural Shops and Post Office relief. Figures include mandatory relief for general stores and post offices under the Local Government and Rating Act 1997. Figures for 2001–02 onwards includes mandatory relief for petrol filing stations and public houses under the Non-Domestic Rating (Public Houses and Petrol Filling Stations) (England) Order 2001 (SI 2001/1345) and mandatory relief for new enterprises on former agricultural premises under the Rating (Former Agricultural Premises and Rural Shops) Act 2001. The 2004–05 figure includes an allowance for the increase in the gross rate yield.
- 6. Item 1(i)(e): Community Amateur Sports Clubs (CASCs). Mandatory rate relief for sports clubs registered with the Inland Revenue as Community Amateur Sports Clubs under the Section 64 of the Local Government Act 2003. This provision comes into effect on 1 April 2004. Sports Clubs that have not registered will still be eligible for discretionary relief allowed to non-profit making bodies.
- 7. Item 1(i)(f): Discretionary relief granted to charities, non-profit making organisations and for other reasons including discretionary relief for village shops and post offices under the Local Government and Rating Act 1997. Figures for 2001–02 onwards include discretionary relief for petrol filing stations and public houses under the Non-Domestic Rating (Public Houses and Petrol Filling Stations) (England) Order 2001 (SI 2001/1345) and discretionary relief for new enterprises on former agricultural premises under the Rating (Former Agricultural Premises and Rural Shops) Act 2001. The 2004–05 figure includes an allowance for the increase in the gross rate yield.
- 8. Item 1(ii)(a) and (b): The allowances for the costs and losses incurred by authorities in collecting non-domestic rates from ratepayers.
The amount of non-domestic rates in England for 2004–05 to be redistributed to local authorities will be £15 billion.
The calculation of the distributable amount for 2004–05 is set out in the table below.9WS
9. Item 1(ii)(c): City Offset—the amount which the City of London will not be required to pay into the non-domestic rating pool. It is the amount which will be retained by the City to meet its own expenditure. In 2004–05, City offset is to be set to zero.
10. Item 1(iii): net adjustment in respect of appeals and other amendments to the rating list affecting liability for previous years rates settled in that year: comprising repayments and associated interest payments.
11 Item 2: the rateable value of non-domestic hereditaments on the central rating list times the multiplier, less the net effect of transitional arrangements, and adjusted for appeals and other changes in respect of previous years.
12. Item 3: Almost all properties previously included in the Crown List are included in the local list figures at item 1.
13. Item 4: the contribution from central government to offset the amount of the Secretary of State's estimate of income foregone as a result of transitional arrangements established by regulations under section 58 of the Local Government Finance Act 1988 and the transitional relief scheme, announced by written PQ on 25 November 1999, Official Report, column 70W.