Memorandum by Maidstone Borough Council
(SBR 10)
1. ABOUT MAIDSTONE,
THE PLACE
1.1 The Borough of Maidstone covers 40,000
hectares located at the heart of Kent. It includes a large urban
area and substantial villages. Its countryside, set within the
"Garden of England", includes the Kent Downs area of
Outstanding Beauty with a population of approximately 140,000,
living in nearly 57,000 households, the Borough is home to 8.8%
of the Kent and Medway population (2001 census) and borders Swale,
Ashford, Tunbridge Wells, Tonbridge and Malling Borough Councils
and Medway Unitary Authority. It is strategically situated between
London and the Channel ports and is serviced by two trans-European
motorway networks—the M20 and M2—and rail connections
to central London.
1.2 78% of Maidstone's population are owner/occupier
households. Although the population of Kent has increased, Maidstone's
population has remained relatively static over the past 10 years.
Many areas of Maidstone are relatively affluent (for example 42%
of households have two or more cars or vans), it also has pockets
of deprivation, such as Parkwood, Coombe Farm and High Street
Wards. Previously in 2000, Shepway Ward ranked in the top 10%
of most deprived Wards in England (and ranked eighth most deprived
in Kent).
1.3 The Borough is home to a number of industries,
both old and new. This includes paper, packaging and technology
companies and a thriving media industry. The main employment sectors
within the Borough are distribution, hotels and restaurants, public
administration, education and health and banking, finance and
insurance. The total non-domestic Rateable Value is in the region
of £125 million.
2. THE COUNCIL
2.1 Maidstone Borough Council is one of
twelve Kent District Councils. Following the Local Government
Act 2000, the Council adopted a "Leader and Cabinet"
political model in June 2001.
2.2 The Council has 55 Councillors and has
been in "No Overall Control" for some years. There are
26 Conservative, 21 Liberal Democrat, four Labour and 4 Independent
Councillors. The Cabinet consists of five Liberal Democrats and
one Independent Councillors.
2.3 Each Cabinet Portfolio cuts across more
than one service function to help make sure that the Council's
approach to issues is joined up.
2.4 The Cabinet are held to account by four
Overview and Scrutiny Committees, an Audit Committee and there
is a Standards Committee. The Council also has a Licensing Committee
and a Planning Committee which take decisions on applications
submitted to the Council.
2.5 Maidstone Borough Council is an "Excellent"
Authority awarded this status in 2004 through the CPA process.
Since then it has had good Use of Resources scores and very positive
Direction of Travel comments from the External Auditors.
2.6 The Council has clear aims and aspirations
detailed in its Maidstone 20/20 Vision, has a Strategic Plan for
the period 2007-10 and a Medium Term Financial Strategy covering
the next five financial years.
2.7 The Council is well advanced in terms
of addressing the requirements of the Local Development Framework
and was the first Authority to receive approval to its Affordable
Housing and Open Space Development Plan documents. It has achieved
Growth Point Status and has been awarded £1.5 million 2007-08
with a aspiration for significantly greater sums in the future.
As part of this overall assessment of the Council's current position
and its future aims and aspirations, it is well aware of the infrastructure
investment deficit in the area and the need for this to be rectified
to meet the needs of the people and businesses of Maidstone.
2.8 The Council has worked hard with all
its partners, particularly the Highways Authority, KCC, but is
also aware of the severe financial constraints facing those partners
and Local Government in particular. These constraints include
very tight grant settlements from Central Government and the effective
reimposition of universal capping on potential Council Tax increases.
To address this financial problem and in an attempt to meet the
aspirations for Service Development of the Council, it has embraced
many initiatives for the achievement of efficiency savings. It
embraced new ways of working, investment in IT, business transformation
processes, invest to save resources, joint working with partners
and the reallocation of resources from low priority services to
objectives.
2.9 The Council endorses the general analysis
of the problems of Local Government as set out in the Lyons Report
and the Direction of Travel described in that report. The Council
is particularly enthusiastic regarding the emphasis on place shaping,
local choice and greater financial flexibility to address problems.
3. BIDS
3.1 The Council was keen to embrace the
concept of BIDs and over the past three years has endorsed two
unsuccessful BID programmes.
3.2 Maidstone Town Centre Management has
twice examined the introduction of a Business Improvement District
and was seeking a levy of 1% on every business where rateable
value was in excess of £5,000. This would have generated
an income of £335,000 a year for 10 years. This income would
have provided for:
— better transport and access;
— a cleaner environment; and
3.3 Surveys were carried out at the time
of the BID process by the Town Centre Management which showed
that 80% of individuals and 57% of companies supported the principle
of establishing a BID in Maidstone. However, when it came to the
actual vote as to whether to declare the BID the decision went
against the proposal but only by a small number. The issues appear
to have been one of trust, as to whether the money would have
been spent appropriately, and a view that the existing rate system
should be providing for these items.
4. INFRASTRUCTURE
DEFICIT
4.1 As a part of a recent employment study
the Council surveyed a range of businesses in relation to their
location requirements and what came from that, was that their
priorities are:
— high quality environment;
— fast access to the motorway;
— recruitment of staff; and
— public transport links.
The view of the respondents was that the public
sector should address these issues.
4.2 The issues of concern to the Business
Community are clear from both surveys, what is absent however
is the financial resource to address them. Maidstone has recently
been identified as a Growth Point, and one of the key issues is
to deliver a sustainable community ie balancing housing provision,
employment, environment and infrastructure. Government is clearly
placing great emphasis on the role for Local Authorities of "place
shaping". Whilst the infrastructure for new development can
be funded through Development Agreements (S106 of the Planning
Act), this does not deal with the issue of the infrastructure
deficit that exists within the existing urban, rural and social
fabric.
4.3 A supplementary business rate applied
over a 20 year period would enable the provision of the necessary
infrastructure to deal with existing deficiencies in transportation,
the environment, and training of people. However, in order to
have the trust of the business community it is critical that they
are engaged in this process and can see the tangible effect in
terms of delivery of service by the public sector. It may be that
the money should be channelled through the Local Strategic Partnership
which may encourage businesses to participate fully in the LSP.
However, the final decision on the allocation of resources should
remain with the Council.
5. SUPPLEMENTARY
BUSINESS RATES
(SBR)
5.1 Using the knowledge and experience of
problems facing the Council and the conclusions from the BID process,
the Council would like to put forward the following comments on
the six issues identified in your request for a Memorandum:
(a) The Rationale for Introduction of a Supplementary
Business Rate.
The Council would endorse the rationale as set
out in the Lyons Report.
(b) Accountability and Approval Mechanisms
for the Introduction of a Supplementary Business Rate at a Local
Level—the Role of Business and the Wider Community.
The Council is of the view that, in Shire areas,
the responsibility for levying and controlling the Supplementary
Business Rate should be with the District Council. The District
Council has primary responsibility for local economic development
as evidenced by the LABGI awards and wider responsibility for
place shaping.
Consultation with local business would be necessary
and a compact with the Highways Authority on a programme of work
to be funded by the levy would be necessary. Consultation could
well involve the Local Strategic Partnership (LSP) which involves
the Highway Authority and the local business community and could
be managed through the Local Area Agreement (LAA).
The impact assessment necessary to justify the
proposed works would evolve through the Local Economic Development
Strategy and the Local Development Framework processes.
(c) Consideration of Implementation Issues,
including the Impact on Local Authorities' Tax Bill and Decision
Making in Two Tier Local Authority Areas.
The Supplementary Business Rate will allow infrastructure
problems to be addressed and will, in reality, in the short to
medium term, have little or no impact on the level of Council
Tax. It will, however, give the Local Authority greater flexibility
to address significant issues which currently are not being addressed.
The Supplementary Business Rate will need to
be guaranteed over the medium to long term as it is likely that
larger infrastructure schemes will be funded, possibly by borrowing,
which require surety of funding. Without this surety, the risk
to longer term financial viability will rest with the District
Council.
(d) The Impact of a Supplementary Business
Rate on Equalisation.
The Supplementary Business Rate should be levied,
collected and accounted for by the District Council, but be outside
of the current arrangements for the Collection Fund and National
Pooling. In the short term this should have no impact on equalisation.
The question of equalisation should be only further considered
as a consequence of the potential relocalisation of the business
rate.
(e) The Appropriate Scale of the Supplement.
To boost confidence, the levels of the supplement
should follow the pattern of BID's and build up over a period
to minimise the impact on the business community. This will also
reflect the fact that the investment needed to be covered would
be likely to build up in terms of financial commitment over a
medium term period.
(f) The Threshold for Payments and Whether
Small Businesses should be required to pay.
It would appear to be appropriate for relief
from the supplement to follow the Small Business Rate Relief Scheme,
although it is accepted that it may be appropriate for the legislation
to allow the Council to consider wider exclusions or exemptions,
if necessary to deliver a Local Economic Development Outcome.
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