Agenda item

The deadline for questions is noon on Wednesday 29th April 2020. 

A.        Councillor Draycott – Commercial Property Investment

“Revenue Budget 2020/21 – Commercial Property Investment and New Post

Would the Leader inform Cabinet of the progress on both these matters which were important factors in the Budget agreed by Councillors in February?

Also, does the review by MPs on councils using the public purse in this way change/affect this strategy?”

The following response had been published prior to the meeting:

The Council is committed to becoming a more commercial and entrepreneurial organisation – and this is probably now even more important given the economic conditions facing us. This will be achieved through a variety of means but a key factor will be the Strategic Director of Commercial Development role. The new postholder will provide leadership, commercial acumen and experience to the Council. The post has been appointed to and Justin Henry will be joining the Council on June 29th. 

Whilst the economic context has changed there will remain opportunities for commercial investment, and we need to be able to respond these effectively. Furthermore, the role will be essential in supporting the Councils efforts on economic, community and organisational recovery. A specific focus on our assets and buildings will be an early priority. 

The review by MPs will be interesting and its outcomes will be factored into our strategic approach to commercial investments.

In asking a supplementary question/making a statement, Councillor Draycott thanked the Leader and officer for the response.  She stated that the new post was critical to the Council in continuing to deliver services and maintain staff during this financial year.  The response provided indicated a change to the job description for the post towards leading in the coronavirus recovery programme and not as agreed by Council to find commercial opportunities to bring in vital income, that income now being needed even more.  The Government had helped the Council with funding over the period of Covid-19, but not sufficiently to cover total increased expenditure.  The Local Government Association considered that 3 to 4 times more would be needed by councils.  Therefore, when would councillors have full oversight of current budgets, noting that the first Cabinet report was not scheduled until July, could this be earlier and would the new job description for the new post and salary costs be made available to members?

The Leader asked the Chief Executive to respond, referencing in particular the report on coronavirus recovery due to be considered by Cabinet.  The Chief Executive stated that that report was scheduled for consideration by Cabinet on 4th June 2020, with the Scrutiny Commission having the opportunity to scrutinise that.  He added that the job description for the new post was as approved and was a matter for the Chief Executive rather than Council.  The commercial property investment focus of the post remained, but it was also hoped that the recovery agenda would also be assisted with.  Reports would be submitted to Cabinet and later Council setting out budgets and all of the implications associated with the coronavirus pandemic.

B.        Councillor Draycott – Business Rates Relief Educational Establishments

“Business Rates Relief (BRR)

Would the Leader inform Cabinet of the total value of mandatory charitable relief awarded in both 2018/19 and 2019/20 to educational establishments in the Borough and confirm that by far the biggest beneficiary under the current rules is the University, and that other educational establishments receive a significant amount of the rest?

Is the Leader aware that included in the Government’s budget in March this year is a review of BRR signalling that the loophole where certain educational businesses are able to claim to be charities and receive BRR of 80% is no longer acceptable?  BRR will cease in Scotland in September 2020 and other parts of the Uk and Councils are debating this now.”

The following response had been published prior to the meeting:

The total value of Charitable relief awarded amounted to £7.9m for 2019/20 (£7.5m in 2018/19).

The University is the largest single recipient of such relief which amounted to around £3.4m across the various University premises in 2019/20. 

We understood from the budget that the government is to publish the terms of reference for a fundamental review of business rates to report in the autumn.  We will await the outcome of this review with interest.

It is worth noting that under the current business rate retention rules it is unlikely that the Council could expect to see much benefit from a change in legislation that would require educational establishments to pay increased business rates.  This is as additional sums collected would be likely offset by an increase in the share of total collections that the Council would be required to remit to the Government.

In asking a supplementary question/making a statement, Councillor Draycott stated that private educational establishments having the ability to be charities had been the case for many years and, as a result, they could receive an 80% reduction of Business Rates, which most businesses could not do.  She stated that this loophole was finally being highlighted as earlier this year the Government had announced a full review of Business Rates Relief, including educational establishments.  Scotland would end Business Rate Relief for educational establishments in September 2020 and councils across the country were challenging the loophole.  Nearer to home, with the terrible time being faced with Covid-19 and the many challenges being met head on, including by this Council which was doing an excellent job, Councillor Draycott considered that the University and private schools were missing an opportunity for more goodwill in the Borough and had been rather silent in this time.  Rather than continuing to take the low cost option, they needed to show that we are all in this together as a Borough and consider forgoing in this financial year at least 10% of the £7.9m saved in 2018/19 so that services and jobs can be protected.  Therefore, would the Leader agree to start a dialogue with the University and other educational establishments along the lines suggested by Councillor Draycott in order to protect jobs and services?   

In response, the Leader stated that Business Rates policy was set by the Government, not borough councils, therefore this Council had no control over the matter, also that Business Rates retention predominantly went to the Government.  The Leader then asked Councillor Barkley, as Cabinet Lead Member, to respond.  Councillor Barkley reiterated that the matter was one of Government policy, also that the University was a separate organisation over which this Council had no jurisdiction.  He did not consider it to be the case that Scotland was abolishing Business Rates Relief for educational establishments.  Business Rates were a complex issue which was to be looked into by the Government.  Councillor Barkley added that education and particularly the education of our young people was critical to the development of this country.  The matters raised were not within this Council’s control.