Council Tax Setting Committee Minutes

Wednesday, 13th January, 2016
Committee Room 3, Council Offices, Gernon Road, Letchworth Garden City

Attendance Details

Councillor Mrs L.A. Needham (Chairman), Councillor Mrs A.G. Ashley (substitute), Councillor Tony Hunter, Councillor Ian Mantle and Councillor R.A.C. Thake.
In attendance:
Strategic Director of Finance, Policy & Governance, Head of Revenues, Benefits & IT, Systems & Technical Manager, Revenues Manager and Committee & Member Services Manager.
Also Present:
1 member of the public.
Item Description/Decision
In the absence of the Committee Chairman, and upon being moved and seconded, it was

RESOLVED: That Councillor Mrs L.A. Needham be elected as Chairman for the meeting.
Apologies for absence were submitted on behalf of Councillor T.W. Hone (Chairman). Councillor Allison Ashley was substituting for Councillor Hone.
RESOLVED: That the Minutes of the meeting of the Committee held on 26 February 2015 be approved as a true record of the proceedings and signed by the Chairman.
There was no notification of other business.
The Chairman reminded Members that, in line with the Code of Conduct, any Declarations of Interest needed to be declared immediately prior to the item in question.
There was no public participation.
The Committee considered a report of the Head of Revenues, Benefits and Information Technology seeking approval of the Council Tax Base for 2016/2017. The report contained the following appendices:

Appendix A - Council Tax Base by Parish 2016/17;
Appendix B - Variations in Council Tax levels by Parish; and
Appendix C - Example of Council Tax Base calculation for Letchworth Garden City.

The Committee noted that, on 31 December 2015, Hertfordshire County Council (HCC) had advised of the possibility that they would be recommending to their Members that their Council Tax be increased by the 2% allowed by the Government to be ring-fenced for Adult Social care and a further 1.99%, giving a total of 3.99%. It was not expected that there would be any change to the Council Tax Precept by the Police and Crime Commissioner for Hertfordshire. NHDC was considering whether to increase Council Tax levels in 2016/2017 by 1.9%. The increases in Council Tax detailed above, if approved, would see the overall Band D Council Tax increase by £49.48 (or 3.31%) for Band D.

The Head of Revenues, Benefits and Information Technology advised that the proposed Council Tax Base for 2016/17 of £47,989.60 was produced before NHDC had been notified by HCC of the possibility of them increasing their Council Tax for 2016/17 by 3.99%. If this increase was approved by HCC it would have a knock-on effect on the amount of Council Tax Reduction that NHDC would be likely to be paying out in 2016/17. This, in turn, would have a knock-on effect on the Council Tax Base.

The Head of Revenues, Benefits and Information Technology stated that some modelling had been carried out, and he confirmed that there was likely to be an affect due to the increased amount of Council Tax likely to be charged in 2016/17, which meant that the recommended Council Tax Base of £47,989.60 was probably going to be slightly too high. The reason was that the more Council Tax Reduction paid out by NHDC would reduce the Council Tax Base.

The Head of Revenues, Benefits and Information Technology believed that the shortfall that was likely to occur would be absorbable through the 1% non-collection rate that the Council set each year. However, even though the Council Tax Base for 2016/17 was an increase of 1.3% above the 2015/16 level, for 2017/18 it would be likely that the Tax Base would be more significantly affected, as the effect of the Council Tax Reduction Scheme in 2016/17 would filter through to when Members would be setting the Council Tax Base for 2017/18.

The Strategic Director of Finance, Policy and Governance added that, in terms of the Council’s Medium Term Financial Strategy (MTFS), an assumption was made each year of a 0.5% increase in the Council Tax Base. So whilst there may not be a significant Council Tax Base increase for 2017/18, she felt that it was likely that it would be broadly in conformity with the MTFS projections.

It was noted that, due to the potential impact of the above matter on the Council Tax Reduction Scheme for 2016/17, which was to be considered by the Council at its meeting to be held on 21 January 2016, an addendum report would be submitted to that meeting.

The Strategic Director of Finance, Policy and Governance and Head of Revenues, Benefits and Information Technology answered a number of Members’ questions regarding the Council Tax Base report.

In accordance with Standing Order 4.8.16(h), the Chairman requested that a Recorded Vote be taken on the Council Tax Base 2016/17.

For: Councillors Allison Ashley, Tony Hunter, Ian Mantle, Mrs L.A. Needham and R.A.C. Thake - 5
Against: 0
Abstentions: 0)

It was therefore


(1) That a non-collection rate of 1% for 2016/2017 be approved; and

(2) That the amount calculated by this Council as its Council Tax Base for 2016/2017 shall be £47,989.60 in total, and that the individual sums shown for each Parish, as set out in Appendix A to the report, be agreed.

REASON FOR DECISION: To fulfil the statutory requirement to set a Council Tax Base for the District and to enable Major and Local Precepting Authorities to set their levels of Council Tax for 2016/2017.
The Committee considered the report of the Head of Revenues, Benefits and Information Technology in respect of the National Non-Domestic Rate Return 1 (NNDR1). The following appendix was submitted with the report:

Appendix 1 - Draft NNDR 1 Return.

The Systems and Technical Manager advised that the NNDR1 required the Council to calculate what it estimated to be the net payment by Non-Domestic Ratepayers of Business Rates for 2016/17. It informed the Department of Communities and Local Government (DCLG) and the Council’s major preceptors of what the Council expected to receive in terms of Business Rates income. The NNDR1 form had to be completed and returned by 31 January 2016.

The Systems and Technical Manager explained that the NNDR1 form comprised four parts:

• Part 1 - no input was required from NHDC. Part 1 reported on data recorded elsewhere on the form;
• Part 2 - this was baseline data on expected gross collectable debit, with deductions for mandatory and discretionary adjustments;
• Part 3 - this included further adjustments, such as write offs. Line 5 contained the first renewable energy amount, which was disregarded for the purposes of the calculations; and
• Part 4 - this detailed inputs and outputs on the NHDC Collection Fund, arriving at a surplus or deficit figure.

The Systems and Technical Manager commented that the NNDR1 also took into account measures announced by the Chancellor of the Exchequer as part of the Autumn Statement. For 2016/17, the only measure announced was a further extension of the doubling of the Small Business Rate Relief (SBBR) to April 2017. This would be refunded to the Council as part of a Section 31 grant.

The Committee was informed that the NNDR1 suggested that the total net amount of Non-Domestic Rates to be collected in 2016/17 would be £39,300,688. The NNDR 1 then indicated that the Council’s share of the total Non-Domestic Rates to be collected in 2016/17, after deducting the share of the deficit position, should be £15,732,348. This represented 80% of the 50% of total business rates that were kept locally. The other 50% was paid over to the Government. The Government had chosen to then apply a tariff and levy within the system. The 2016/17 provisional settlement announced that the Council’s tariff was £12,849,781 and this would have to be paid over to Central Government regardless of the amount of business rates collected. The Council had chosen to participate in a pool with other Hertfordshire Authorities in 2016/17. This would have the effect of reducing the levy to a negligible amount that the Council would need to pay Central Government for growth above the baseline need. Based on the NNDR1, it was estimated the Council would collect around £700,000 more than the baseline need in 2016/17.

The Systems and Technical Manager advised that there were a number of variables surrounding the completion of the NNDR1 form, including the number of Business Rates appeals. There were currently 560 appeals outstanding (although many of these we potentially spurious). Therefore, as it was unknown how many of these appeals would be successful, estimates were made based on national statistics.

The Systems and Technical Manager stated that a further potential area of concern would be lack of growth in the number of rateable premises. However, over the past year there had been growth in North Hertfordshire, although this had been partly offset by the success of a national appeal by purpose-built Doctors’ Surgeries (a reduction in NHDC’s gross collectable debit by £90,000).

The Committee noted that another variable was the state of the economy and the number of businesses that ceased trading during the year. However, officers always endeavoured to build this into the scheme, with various adjustments being made throughout the year.

The Systems and Technical Manager answered a number of Members’ questions regarding the NNDR1 report.

It was agreed that any necessary changes to the final version of the NNDR1 be delegated to the Strategic Director of Finance, Policy and Governance, in consultation with the Executive Member for Finance and IT.


(1) That the Draft National Non-Domestic Rate (NNDR) 1 Return 2016/17, as detailed at Appendix 1 to the report, be approved; and

(2) That any amendments required on the Return resulting from changes to the form and the publication of additional guidance be delegated to the Strategic Director of Finance, Policy and Governance, in consultation with the Executive Member for Finance and IT.

REASON FOR DECISION: To comply with statutory requirements.
Published on Monday, 1st February, 2016