District's financial settlement
More revenue from business rates will be retained in the St Albans District to support essential services such as waste recycling, parks and environmental protection.
The Government has admitted Hertfordshire to a pilot scheme that allows local authorities to keep more of the business rates they collect.
St Albans City and District Council (SADC) is one of 11 councils in the County that will benefit during the next financial year.
It will be able to retain 75% of the expected growth in local business rates in 2019/20 compared to 2018/19.
Usually, councils keep only 50% of the growth with the rest going to central government.
It is estimated that the change will be worth £11.3 million to Hertfordshire with SADC’s share being around £100,000.
If the Business Rates Retention Pilots are successful, the scheme is expected to be applied to all English councils from April 2020.
Hertfordshire’s inclusion was announced last week as part of the provisional Local Government Finance Settlement.
The 2019/20 settlement details the financial support local authorities can expect from central government. It is decided by the Ministry of Housing, Communities and Local Government.
Next year, a feature called “negative revenue support grant (RSG)” will be removed, providing SADC with a £900,000 boost to its finances.
RSG is a sum of money a council receives directly from central government in accordance with a complex funding formula.
In the case of St Albans – and some other councils – the planned reduction in RSG was actually greater than the RSG itself.
This is known as negative RSG and would have required the Council to hand over more business rates revenues to central government. It will not now need to do so.
The New Homes Bonus given to the District by central government was also confirmed to be £1.1 million.
This is a grant to encourage housing growth in their areas. It is based on the amount of extra Council Tax revenue raised from new homes and long-term empty homes brought back into use.
Earlier this month, SADC approved its Corporate Plan and Budget for the five years from 2019 to 2024. This included an average 2.39% rise in the District Council’s element of Council Tax for next year.
Councillor Alec Campbell, the Council’s Leader and Portfolio Holder for Resources, said:
There was much welcome news in the finance settlement, although the budgetary decisions we have already made do not need to be changed.
Negative RSG seemed an unfair burden that we along with some other local authorities had to carry. I had lobbied ministers through our MPs and directly and I am very pleased that it has been removed.
This, together with the New Homes Bonus and admission to the Business Rates Retention Pilot, means our finances will be given a significant boost.
It means we can maintain services and protect our reserves while balancing the books. This helps provide a platform for improving services for the future while providing value for money for our residents.
Councillor contact:
Cllr Alec Campbell,
Leader of St Albans City and District Council.
Tel: 07793 550200
Email: cllr.a.campbell@stalbans.gov.uk
Contact for the media:
John McJannet,
Principal Communications Officer,
St Albans City & District Council.
Tel: 01727 296130
Email: john.mcjannet@stalbans.gov.uk