An initial £17.5m relief has been applied to rates bills which arrive with York businesses this week.
Having joined local and regional partners in making the case to central government for further business rates relief, City of York council delayed issuing rates bills until after the budget announcement on Wednesday 3 March.
The Chancellor announced that eligible retail, hospitality, leisure and nursery business will receive a rates discount of:
100% for the first three months, totalling £17.5m for eligible York businesses
Up to 66% for the remainder of the 2020/21 financial year
The total value of the rates relief will depend on how many businesses reach the discount cap set by the government:
For eligible retail, hospitality, leisure properties the £2m for businesses that were required to close as at 5 January 2021, and up to £105,000 for business permitted to open at that date.
For eligible nursery properties the relief will be capped at £105,000 per business, regardless of the open or closed status.
Following government guidance, eligible businesses will receive two bills. The first will show a 100% discount from April 2021. The council will then issue an adjusted bill from 1st July 2021 showing 66% discount for the period from 1st July 2021 to 31st March 2022.
Businesses which do not have access to their registered premises to collect their bill can contact the rates team by e-mail at email@example.com.
Businesses that wish to opt out of the Retail, Hospitality & Leisure Rate discount scheme, or Nursery discount scheme may do so by contacting firstname.lastname@example.org before 30th April 2022. Please note that any business opting out of this scheme cannot withdraw their refusal for either all or part of the financial year.
Papers published today by the York Council confirm that a 4.99% increase in Council Tax levels will be implemented on 1st April.
Most of the increase is being ringfenced and will be spent on social care.
£4.4m will be spent on the costs supporting adult social care staff and enabling residents to remain in their homes for longer.
£1.4m will go to support children and young people across the city, including further funding for social care staff.
£2.5m will go on creating a “Covid-19 Recovery Fund” (see above) while £1/2 million will bolster waste and street environment services (to include additional staffing on waste rounds, improved city centre cleaning and effective weed control).
There are no proposals to increase the amount invested in improving key public services like road and footpath maintenance.
£200,000 however be spent developing a new transport plan for the City.
A report on the Castle Gateway regeneration project published today says that the scheme should go ahead but it says, “there are no plans to close Castle Car Park until suitable replacement parking is available”.
However, the construction of a multi-story alternative on the St George site will be shelved.
The Council’s Executive are being recommended to agree to the “recommencement of the paused procurement of a construction contractor to undertake the design and subsequent construction of the proposed apartments, pedestrian/cycle bridge and riverside park at Castle Mills”
They’re also being asked to approve the design and submission of planning applications for a “high quality public realm scheme on Castle Car Park and Eye of York” while a decision on the future of the site at 17-21 Piccadilly – currently the home of the Spark container village – will be delayed until next summer.
The immediate additional financial commitment for the Council will be £1.5 million. In total the project cost – which was to be funded by borrowing – was £46 million. This would generate additional interest payments of around £1 million per year which would have to come out of what is now an overcommitted revenue budget.
In effect, there will be further cuts in public service standards across the City.
It was hoped that the borrowing would be paid off through the sale of flats which would be built on the former Castle Mills car park site. However, there was still a funding deficit of £4.7 million and no resources were allocated for turning the Castle car park into “a world class open space”.
The Castle car park provides over £1 million a year in income for the Council.
The Council has already spent £2.2 million on consultation and design activities for the project.
The report fails to put the scheme costs into the context of the overall Council capital and revenue budget position.
An oddly detached from reality section of the report claims that the “Castle Gateway masterplan is a “significant opportunity to drive the city’s response to Covid-19 due to the:
Focus on sustainable transport to create new key pedestrian and cycle routes
Reduction of vehicle journeys inside the inner ring road through the closure of Castle car park
Creation of significant new public realm
Enhanced cultural and heritage offer and the creation of a new major event space – building on the city’s unique selling points and expanding the capacity to attract responsible tourism to support the city’s economy
Regeneration and investment in rundown parts of the city Development of new city centre homes, including new affordable and council housing
Capacity to reinvigorate the economy by supporting jobs in the construction sector”
So we have the Benito Mussolini solution to unemployment emerging. Borrowing to fund massive public works contracts which – in the case of the bridge and park – will have no short-term economic benefits (other than perhaps for a handful of the green socialist, city centre dwelling, elite).
Businesses dependent on those who choose to use, because of the health crisis, personal transport when they visit the City, will lose out.
We need to be careful with our commentary.
“El Duce” gained a reputation for having errant stationmasters shot if trains didn’t run on time.
The lowest risk part of the scheme maybe the construction of the blocks of flats. Maybe that could continue, even though rising unemployment, and reducing business rate income, could compromise the Council’s ability to service the planned borrowing.
On balance, the Council really should decide to pause the project for 18 months and review it when the health crisis is over.
The grant totals over £950,000, with £868,000 already being allocated. The remaining money will be availablefor new customers until 31 March 2021.
Executive Member for Finance and Performance, Cllr Nigel Ayre, said:
“The coronavirus pandemic has posed significant financial challenges for many residents and that is why we are investing further funding to help support those who need it the most during this difficult time
This council tax support grants will help people who may be worrying about their financial situation. It is also another way in which we are helping the most vulnerable people in York, which has been one of our key priorities throughout the pandemic.
I would encourage anyone facing financial difficulties to access the help and support that is on offer by calling 01904 551550 or emailing COVID19help@york.gov.uk.”
Help is available if you are struggling to pay Council Tax, due to Covid-19 or other reasons
You can ask for any payments missed since April 2020 to be spread across the rest of the year up to March 2021 by e-mailing email@example.com or calling 01904 551556
Post coronavirus strategy confirms major financial issues.
The Council has published areview of its response to the Coronavirus crisis. It will be discussed at a “virtual” Executive meeting next week.
The review mostly looks backwards and therefore contains little that is new.
The report does, however, say, “Further work is needed to accurately assess the impact, then to identify and plan the city’s response. It should be noted that, based on the financial information in this report, and the expected increase in demand for services as we start to move out of lockdown, this work will involve reprioritising council budgets, focussing resource on where there are greatest challenges and providing a new strategic plan for the council to work to over the coming months. It is quite possible that there will be some previous priorities that can’t be delivered in the same way in the light of our new operating context.
A Recovery Plan is being developed (aligning with regional recovery activity through the LRF) which will outline the risks and challenges of the emerging situation, with actions in response and opportunities based on lessons learned during the emergency response. Clearly, this plan will take into consideration and align with Government advice and national plans for recovery. It will be used to inform a review of the existing Council Plan in order to produce an Operational Recovery Plan to guide the council over the next 6 – 9 months”.
That is the right approach.
There needs to be an immediate moratorium on taking on new expenditure. An “approvals committee” should be set up which can publicly test any new expenditure proposals.
The Councils initial assessment of its financial position may produce accusations that it is very much a “worst case” scenario. The government has today confirmed that in total it will grant £10.5 million to help the Council offset its estimated £35 million exposure. Much of the defict assumes a high level of non payment of Council Tax and business rent.
There is a stark warning of cash flow problems later in the year “the Council would have to concentrate on providing statutory services only”. That would be bad news for services like leisure, with some facilities likely to close.
On its capital programme the Council promises a project by project review. “this will include considering the overall purpose of the scheme and whether they are still financially viable given the risk to the overall economy. This is particularly crucial for those schemes that assumed the generation of capital receipts to fund expenditure”.
The report is silent on the consequences of some schemes that area now past the point of no return.
Recent increases in the Council’s commercial portfolio are not analysed but there are fears of a forced “fire sale”.
Empty offices at the community stadium site (underwritten by the Council) could remain empty for years, while the pipeline sales of empty former social care buildings could also fall through. Options for cutting back on the £20 million Guildhall refurbishment project will need to be considered.
The Community Stadium itself, although outsourced, is dependent on other activities on the site to cover its running costs.
It seems certain that there will be delays on the York Central regeneration project while the £14 million new multi storey car park on St Georges Field will no doubt be shelved together with the rest of the Castle Gateway project.
Other cherished capital investment projects, which involved increased debt, and therefore increase the day to day running costs of the Council, will have to go “on hold”.
No new contracts should be let unless they direct address the adverse consequences of the health crisis.
Much more on this and the implications for other public services in the City will become apparent over the next few weeks.
Council reveals who pays the most and least in rates
Tesco has largest rates bill in York
The Government scheme to reduce business rates by 33% for medium sized retailers has been approved. New bills are expected to be sent out shortly.
The decision comes as the Council lifts the veil on business rates (NNDR) in York. A report to a meeting next week says that 2000 local businesses are entirely exempt from paying rates. (Businesses with a rateable value of less than £12,000 are exempt from paying rates).
The bottom 50% of businesses pay an average of less than £1000 per annum.
The biggest bill is paid by Tesco which alone has a bill in York of over £3 million.
7 of the top 10 charges are for superstores, including those at Vangarde.
The top 3 non-retail rates bills are for Nestle (£1.4m), Defra (£930k) and CYC’s West Offices (£730k).
Hotels are large contributors, The Grand having a net charge of £680k, The Principal paying £547k and the StayCity Aparthotel on Paragon Street contributing £343k.
Within the city centre, the highest charges are paid by Marks and Spencer for their Parliament Street store (£527k), Primark (£366k) and Boots (£355k).
The highest rateable value of £7m is for the University of York, although the University is a charity and receives 80% relief on its liability.
Coney Street and Parliament Street still have the highest rateable values. Click here to see a list of the values in each City Centre street.
The York Council is increasingly dependant on business rate income to fund public services.
The report reveals that, although rates are payable on empty properties (after 3 months), the BHS store on Coney Street has been exempted from the charge by the Valuation Office. There are other exemptions mainly for charities and amateur sports clubs.
Business rate levels are set by central government. Income is shared between the local authority and central government.
28% of the York Council’s budget is now funded from business rates .
The Council is expected to submit an expression of interest in the new “Future High Street Fund” at a meeting being held on 22nd March.
Rates, rent and profit share payments due in the next few days.
Spark April 2018
The valuation office has completed its assessment of the rateable value of the Spark container village on Piccadilly.
Figures published on their web site suggest a total valuation of £138,730.
In the normal course of events this would bring around £65,000 into the City’s coffers helping to offset the additional costs of street cleaning, refuse collection, policing etc. associated with developments of this sort.
Increases in rateable value these days bring an immediate boost for Council finances under rate retention schemes (The Council’s rate support grant has consequently been reduced to zero this year).
But will there be a boost in this case?
Valuations were apparently requested on a per container basis. This means that none of the 25 units has a rateable value of more than £12,000.
Government regulations on rate relief for small businesses say “You will not pay business rates on a property with a rateable value of £12,000 or less”.
So, unless an occupier has a second business property elsewhere, then they may not pay any rates at all.
Empty properties are exempt from Business Rates for 3 months.
Some of the alcohol selling units on the site are said to be highly profitable. No doubt other traders operating nearby will question whether this is fair competition.
York Council officials are staying tight lipped about whether they anticipated this development.
The original Spark business pitchto the Council talked about a £71,000 profit each year. Part of this was to be used to repay the Council’s initial investment in new utility infrastructure. The first payment toward paying off this debt is due in a little over 6 weeks’ time, together with the Council’s share of what Spark claim is a “£1.5 million profit”
NB In August 2018 the Council refused a planning application from Spark to omit the wooden cladding for the containers which they had suggested as part of the original application.
Spark is currently closed on Mondays and Tuesdays. Sparklistonly 4 retailers who currently operate from the containers. There are also 7 food and drink outlets