Agenda item

A report presenting the Council Tax Base and provisional Non-Domestic Rates (NDR) Tax Base forecast for 2024/25.

The Cabinet considered a report of the Director of Finance which presented the Council Tax Base and provisional Non-Domestic Rates (NDR) Tax Base forecast for 2024/25 which would underpin the forthcoming Council Budget and Medium-Term Financial Strategy scheduled for consideration at the Budget Council on 28^th February 2024.

The report also Sought delegated authority to finalise the 2024/25 Non-Domestic Rates (Business Rates) forecast to reflect up to date Non-Domestic Rates details to be submitted to Central Government via the annual NNDR 1 return by the statutory deadline of 31^st January 2024.

The submitted report set out information on the Council Tax Base for 2024/25 using the most up to date valuation list and all other information and estimates available.

The total number of chargeable properties included in the Council Tax Base calculation in Oldham for 2024/25 was 98,628. This figure was reduced to 87,971.8 after allowing for discounts and exemptions and translated to the equivalent of 69,938.4 Band D properties. After applying adjustments for the Local Council Tax Support scheme offset by the additional charging for empty properties and an anticipated increase in the number of properties to be included in the valuation list over the forthcoming year, the number of Band D equivalent properties reduces to 61,374.7. The final Tax Base after the application of the anticipated collection rate of 96.75% was 59,830 which represented an increase of 880 when compared to the Council Tax Base for 2023/24 of 58,500.

The 2024/25 Tax Bases for Saddleworth and Shaw and Crompton Parish Councils of 9,150 and 5,724 respectively, had been calculated using the same methodology.

Statute requires local Billing Authorities to prepare and submit to the Department of Levelling Up, Housing and Communities (DLUHC) a locally determined and approved Business Rates forecast through the NNDR 1 return by 31^st January each year. This forecast will be used to determine the 2024/25 “demand” and payment schedule for Business Rates between Oldham Council and the Greater Manchester Combined Authority (GMCA). The Council remained a participant in the Greater Manchester 100% Rates Retention Pilot Scheme, which meant that the Council no longer paid a share of Business Rates to Central Government. Instead, Oldham currently retains 99% of the income with 1% being paid to the GMCA for Fire and Rescue services.

The estimated rating income for 2024/25 attributable to Oldham Council using the latest information is currently £51.644m. Delegation was being sought to enable the Business Rates income forecast to be updated to take account of up-to-date Non-Domestic Rates information, enabling the submission to Central Government of the annual NNDR 1 return by the statutory deadline of 31 January 2024.

As the 100% Business Rates retention regime is continuing, the Council had assumed a benefit of £4.083m from the pilot scheme for 2024/25. The current arrangement was that the Council could retain 75% of this benefit with the balance attributable to GMCA. The Council’s share, £3.062m was to be made available to support the 2024/25 budget whilst the GMCA share would be transferred to a reserve to be paid to the GMCA once the final position has been agreed. These figures will only be confirmed by the end of 2024/25.

It was emphasised that the preparation of Council Tax and Business Rates Tax Bases was being undertaken in a period of unprecedented uncertainty and volatility. The current economic climate included uncertain prospects for economic growth, Government changes in policy in year, the revaluation of Business Rates from 1^st April 2023 and the decoupling of business rates multipliers were amongst the issues which make forecasting challenging.

The Collection Fund (combined) had moved into a projected surplus position in 2023/24 providing the opportunity to use the surplus to support the 2024/25. This was the result of the continued recovery following the lifting of COVID-19 related restrictions and consequent improved collection rates. It also reflected the level of Government support provided via Business Rate reliefs which had reduced any losses in collection.

Options/alternatives considered:

Option 1 - The Council had little discretion in the calculation of the number of properties incorporated into the Council Tax Base given the legislative framework that is in place. However, there is some discretion in estimating the number of new properties that will be included on the Council Tax register during 2024/25 and the change to the number of claimants of Council Tax Reduction. A prudent view has been taken in this regard. The main area for an alternative approach is over the level of assumed collection rate. An increase in the collection rate would boost the anticipated Council Tax income and a decrease in the rate would decrease income. The Council has chosen to maintain its 2024/25 collection rate at 96.75%. This decision had been influenced by prevailing economic circumstances and current trends in collection rates.

Option 2 - The NNDR1 return generated the figures upon which the Business Rates Tax Base is prepared. It was not therefore appropriate to consider an alternative approach. However, as the figures included on the NNDR1 return on 31^st January 2024 may vary from the estimated level, delegation was sought to allow the opportunity to revise the Business Rates forecast and approve a revised and more accurate position for budget setting.

Resolved:

1.    Cabinet approves

a.    That the Council Tax Base for 2024/25 at 59,380 Band D equivalent properties.

b.    That the latest estimate for 2024/25 Business Rates revenue that is attributable to Oldham Council as being £51.644m.

c.    That the drawing down from the Collection Fund of £4.083m of Business Rates retention gains anticipated for 2024/25, of which the Council will utilise £3.062m (75%)

2.    Cabinet notes the Tax Bases for Saddleworth and Shaw and Crompton Parish Councils of 9,150 and 5,724 respectively.

3.    Cabinet delegates the decision to vary the final Business Rates forecast and hence the Business Rates Tax Base, if required, to the Cabinet Member for Finance and Corporate Resources in consultation with the Director of Finance.