Agenda item

            The Director of Corporate Services reminded the Committee that, at its meeting on 22nd August, it had been informed that the rates finalisation for the financial year 2007/08 had resulted in the Council owing the Land and Property Services agency £4,128,553.40.  A letter had been forwarded to the Chief Executive of the Land and Property Services expressing disappointment at the actual rates figure and requesting a detailed explanation for the scale of the clawback and a re-assessment of the estimate which had been provided to the Council for 2008/09.  A detailed response had been received from the Agency providing an explanation of the factors which had led to the 2007/08 clawback position.  These had included:

·         the losses arising from domestic vacant properties which had increased from £3.6 million to £6.1 million;

·         the losses from non-domestic vacant properties had increased from £10.6 million to £14.1 million;

·         the introduction of the £500,000 cap on rates payable had led to a loss of £1.2 million; and

·         there had been valuation reductions of £7.5 million on the non?domestic side.

            He reminded the Committee also that the projected rates finalisation for 2008/09 would result in a clawback of £700,000.  However, that projection did not include additional rate income which would accrue from Victoria Square and vacant property inspections.

            The Director explained that, since Members were about to embark on the rate setting process for 2009/10 in the context of a turbulent economic outlook, it was essential that they be provided with accurate and timely information about the rate base and had confidence that Land and Property Services would ensure that the collectable rate return was maximised in order to ensure that the burden on the ratepayer was minimised.  He stated that the Institute of Revenue, Rating and Valuation, the leading experts in that field, had been engaged to provide the Council with a detailed technical report on rating issues and the reports which had been submitted for the Committee’s consideration for the remainder of the meeting had been based mainly on their findings.  In addition, a representative of the Institute, Mr. P. Doherty, was in attendance to provide a short presentation and he was welcomed to the meeting by the Chairman.

            Mr. Doherty indicated that there were a number of issues in the report which he wished to highlight.  He referred to the estimated Penny Rate Product and expressed the view that it was not a true estimate but simply a figure based on the valuation list at a point in time which took no account of potential changes to the tax base in the year for which the estimate was provided.  This was a major shortfall and a significant barrier in the financial planning process and he expressed the need for a new estimating model to be introduced.

            Mr. Doherty referred to the liaison arrangements which existed between the Council and the Land and Property Services agency and expressed the importance of developing this on a more formal basis and incorporating it into a Service Level Agreement to enable both parties to have a clear understanding of each other’s responsibilities, needs and expectations.  He referred also to the cost of collecting rates and the rating of vacant properties and indicated that these would be dealt with in more detail later in the meeting.

Noted.