Thirty Third Report Contents

Appendix 3: Draft Cambridgeshire and Peterborough Combined Authority (Business Rate Supplements Functions) Order 2018 and three related instruments

Additional Information from the Ministry of Housing, Communities and Local Government

Q1: In the Explanatory Memorandum (EM) you say: “7.2 Devolution Deals made with Cambridgeshire and Peterborough, Liverpool City Region and West of England contained a mayoral infrastructure supplement, which has similar aims to the BRS [business rate supplement]. The Local Government Finance (LGF) Bill that was lost with interruption of business, as a result of the 2017 election, included provisions for a mayoral infrastructure supplement and for mayoral combined authorities to levy a BRS. The Government subsequently offered the BRS power to those mayoral combined authorities, which they have accepted, with the consent of the authorities in the area of the combined authority and subject to the agreement of Parliament.” If the LGF Bill that was lost had in fact proceeded to Royal Assent, when would the provisions for a mayoral infrastructure supplement and for mayoral combined authorities to levy a BRS have come into effect? How much time has been “lost” to these CAs as a result of the loss of the LGF Bill?

A1: It is not possible to say. This would have depended on the parliamentary progress of the Bill. Secondary legislation would also have been needed before an infrastructure supplement could be levied. In the absence of the LGF Bill, however, the Government has moved quickly to give combined authority mayors BRS powers, demonstrating our commitment to ensuring that they have the appropriate powers available to help strengthen their local economies.

Q2: In section 8 of the EM you say, in the case of the Liverpool CA consultation, that there were “5 comments related to business rates proposals including business rates retention and BRS, 2 were found to be positive, 2 to be negative and 1 was out of scope of the consultation”. This does not indicate strong support for the BRS power in the case of the Liverpool CA. Is MHCLG not concerned about local resistance to this power?

A2: The Department is not concerned about local resistance to this power, not least because in each case its conferral has been consented to by the elected mayor and by all the constituent authorities whose members comprise the democratically elected representatives of the area. As to the consultation responses: there were four responses properly within scope of LCRCA’s consultation regarding the BRS proposals out of a total 930 responses to the consultation as a whole. These four represent a balance between support and opposition, although for such a small sample the extent to which a firm conclusion can be drawn is questionable. Most importantly, the mayor must consult on any proposal to apply a business rate supplement, and following that consultation, must hold a ballot of business affected, which must yield a result in favour of the proposal both in terms of numbers of businesses affected, and in terms of their aggregate rateable value. This will help ensure that mayors invest time to get business support for their proposals. It also ensures that no business rate supplement can be applied without significant support among those from whom the supplement is to be collected.

Q3: What has happened about BRS powers and the other CAs?

A3: BRS powers are being conferred on those mayoral combined authorities who want them … Tees Valley and Greater Manchester have confirmed to us they do not want these powers; we will consider the newly mayoral Sheffield City Region in due course.

Q4: In the EM to the draft West Midlands Combined Authority (Business Rate Supplements Functions and Amendment) Order 2018, you state that the amendments to the list of roads proposed in that Order were sought by the West Midlands Combined Authority (WMCA) so that the definition covers all strategic network roads. What has happened to make the WMCA realise that these amendments are now needed?

A4: MHCLG officials here have put this question to the WMCA, who understood that their response would be shared with members of the Secondary Legislation Scrutiny Committee and would be included in the subsequent report of that Committee. Their response is as follows: “The establishment of WMCA and definition of the KRN [Key Route Network] by local authorities was done at a rapid pace in order to satisfy the legislative timetable. Some errors and omissions in KRN descriptions have subsequently come to light and these were down to both the speed at which the work was done and some uncertainty on the part of our constituents, regarding what the new powers would mean which led to joint errors in the initial submission. We acknowledge that there is a need to ensure that this work is done meticulously the first time, and we apologise for taking further legislative time with this however, these further changes would ensure that the KRN powers are available to use as originally envisaged”.

7 and 12 June 2018

© Parliamentary copyright 2018