Local Government Finance Bill — New Clause 2 — Safety Net Payment to Local Authorities — Major Redevelopmnet Areas — 24 Jan 2012 at 20:48

The majority of MPs voted against requiring the Secretary of State to consider the proportion of business rate income lost and the potential future social and economic benefits relating to a development scheme which results in a loss of business rate income for over a year when deciding if to make a "safety net" payment in relation to it.

The provisions in the Local Government Finance Bill for local retention of business rates include a "safety net" scheme, funded by a levy on business rates, designed to smooth out year to year variations in local authorities' business rate income.

MPs were considering the Local Government Finance Bill^[1]. The proposed new clause which was rejected in this vote was:

• Major redevelopment schemes: non-domestic rate income
• ‘(1) In any case where a relevant authority proposes a major redevelopment scheme resulting in a substantial loss of non-domestic rate income for a period exceeding one year, the authority may make an application to the Secretary of State for a safety-net payment to be made to the authority each year for the period of the scheme. The Secretary of State must determine whether to make such a payment having regard to—
• (a) the proportion of non-domestic rate income which will be lost to the authority for the period of the scheme, and
• (b) the future social and economic benefits of the scheme.
• (2) The Secretary of State must notify the authority of his or her decision on whether or not to grant a safety-net payment and allow the authority 28 days to make representations about his or her decision before issuing a final determination.’.

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• [1] Parliament's webpage on the Local Government Finance Bill

Debate in Parliament | Source |