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I am trying not to become the grumpy old man of local government, but a number of new initiatives are not helping. The CLG recently announced that 60% of the increase in national non-domestic rates (NNDR) bills for 2009/2010 could be spread over the next three years. This has been introduced to soften the effect of the increase in the NNDR multiplier – 5%, and well above inflation – and the fact that transitional rate relief has finished, meaning some businesses have had much larger bills. This could not have been more badly timed. It will take a while for the new legislation to become law and, once it does, councils will have to change their systems to calculate the new payments. We can't wait for this. We need to offer businesses the chance to register to be part of this new payment plan now. This could be another drain on our resources. To illustrate this, a business paying £50,000 in 2008/2009, will pay £52,500 in 2009/2010. This new scheme means it can defer payment of just £1,500 of its bill over the next three years. It still has £51,000 to pay this year. I don't really think this is really going to help local business struggling through the recession. Another potential issue is some businesses will start reducing their payments straight away. This could mean collection rates will suffer, with businesses having no legal right to do this, and the council being asked to take it to court for non-payment. Businesses losing their rate relief this year are likely to benefit more from this option, but again, this may not be to their benefit. Under the new scheme, a business losing rate relief, with an increase in business rates from £10,622 to £16,967, will still have to pay £13,160, which is 40% of the increase. The remaining 60% (£3,807) has to be spread over the following two years, together with the next year's liability and subsequent increases. This show the whole scheme is likely to result in large debts being put off, and then becoming unmanageable. In addition, there will be possible confusion with the new rating list valuations and any new transitional release scheme. The CLG has said it will meet costs of the notification of the scheme and extra administration. However we have no details yet, and what is on offer may not cover the true costs. Would it not have been better to improve and continue with the small business rate relief scheme? Ask yourself, does this initiative assist the efficiency agenda, does it have a significant positive impact on businesses, and is it good value for money? I know what I think. Stephen Weigel is chief executive of Tandridge DC

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FINANCE

District View

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