3. The new funding system
• Part (A) is RSG (still a complex formula)
• Part (B) is retained rates income
• The total (A+B) is scaled down to
national control totals in the national
budget and it drives savings targets at
the local level
4. Business Rates Retention
Total shares Local Shares
% %
Central 50
share
Local share:
Lewes DC 40 80
County 9 18
Fire 1 2
Total 100 100
5. Initial estimate of retained rate
The 2013/2014 Estimate of retained rate income income
National Local 2013/14
% % £m
Shares of retained Business Rates:
HM Treasury (central share) 50 11.623
LDC share of the retained business rates (local share) 40 80 9.298
ESCC share of the retained business rates (local share) 9 18 2.092
Fire share of the retained business rates (local share) 1 2 0.232
Total retained business rates 100 100 23.245
6. Targets, Tariffs, Levies, Top Ups
Safety Nets & Pooling
• Target Business rates income £9.50m A
• Baseline Funding £2.06m B
• Tariff = A-B £7.44m
Levies are payable by Billing Authorities
The Counties receive a top up
7. The levy calculation
Baseline funding £2.06m
1-
Target rates income £9.5m
= 78% of everything collected above £9.5m
Levies are paid to the Government
8. Lewes DC collects above target
Let us say a new assessment raises £1m
50% goes as the Central Share (£500,000)
9% goes to the County (£90,000)
1% goes to the Fire Authority (£10,000)
40% less a 78% levy is kept by Lewes District Council
i.e. £400,000 less £312,000 = £88,000 (8.8%)
On the additional £1m collected 18.8% is kept locally
and 81.2% is retained nationally
9. Snakes and ladders Start here For every £1 real terms growth above the target,
LDC keeps 8 pence, gives 10 pence to other major
preceptors and 82 pence to HM Treasury.
The target reflects rateable
value history over the last 5 Target
years relative to all councils.
Does this help or hinder?
Anything under the radar
since 31 March 2012? Start
above target if your overall
RV and amount to be
For every £1 below the target lose collected are likely to exceed
or gain £1 of your resources until a target.
safety net kicks in when you have
lost 10% of your target or you
reach the target and the levy starts
Lots of successful appeals coming your
way? Start the new system well below
target if your RV history has been one of
growth but you are hit with several of
them.
Safety net kicks in at 10% loss on the baseline funding target
% of target
11. Taxbase Implications for preceptors
Unknowns:
• New discount and exemption freedoms
• Shape of local support scheme
• How the 10% funding cut affects Towns and Parishes
• Impact on collection rate
Knowns:
• Taxbase calculation starts 30 November
• Taxbase must be ready by 31 January
12. Discounts and exemptions
Discount/Exemption £ Tax
Base
Second Homes Discount - reduced to 0% 80,910 49
Class A - exemption reduced to 6 months 31,618 10
(Uninhabitable or under repair)
Class C - exemption reduced to 42 days 336,834 205
(empty properties up to six months))
Class L - exemption reduced to 0% 12,245 7
(Mortgagee in Possession)
Total 461,607 271
13. Council Tax Benefit
£m
Old scheme:
• Paid out in 2011/2012 8.078
• Grant received (8.078)
New scheme:
• Paid out in discounts 8.078
• Grant received 0.000
14. Convert payments into discounts
£8.078m
Average band D tax £1,644.88
= 4,911 band D discounts
Note: detailed calculations by parish produce 4,893.64 Band D discounts
15. Taxbase changes
Band D
• Existing band D 38,671.31
• Discounts & exemptions 271.00
• Council Tax Support Scheme (4,893.64)
• Estimated band D 34,048.67
16. Current Consultation
£ £
District requirement 7,443,275 7,443,275
Parish requirement 2,855,048 2,855,048
Less new grant - District -834,000
Less new grant - Parishes -320,000
All district requirement 10,298,323 9,144,323
District 'Band D Tax p.a. £192.48 £194.11
Parish Band D £73.83 £74.45
All district total £266.30 £268.57
Current/new taxbase 38,671 34,049
17. Local Support for Council tax – New Scheme
• Partners – major preceptors + BA
• No cash involved, just discounts
• Converting discounts to the taxbase
• Cash limited reimbursement – new
distribution
• Partners reap rewards and take all of the risk
18. Who does it affect?
• Pensioners
• Working Age
• Existing Claimants
• All Council Tax payers
• Precepting bodies
19. The Consultation Process
• Launched 13 August
• Scrutiny Committee 6 September
• Cabinet 1 October
• Consultation closes 29 October
• Cabinet 20 November
• Council 5 December
20. Local Scheme
• £20 per week maximum (saves £0.327m)
• Increase non dependant deductions
(saves £0.152m)
• Reduce capital savings limit to £6,000
(saves £0.047m)
• £5 per week minimum (saves £0.020m)
• Remove 2nd Adult Rebate (saves £0.008m)
22. Resources from April 2013
National
deficit
reduction
plan
£0.808m
10%
Working Age Pensioners
3,918 48.5% 4,157 51.5%
£3.005m £4.265m
37.2% 52.8%
The working poor will be disproportionately affected
23. Working Age Analysis
In work and out of work
Income
Working
Support
1,700 43.4%
1,322 33.7%
£1.4m
£1.423m
Job
Seekers
Emp
528 13.5%
Support
£0.582m
368 9.4%
£0.4m
