Malvern Hills to leave Business Rates Pool

Malvern Hills District Council has voted to leave the Worcestershire Business Rates Pool (WBRP) from April 1 next year.

The council's Executive Committee approved the decision at a meeting on 27 October, as remaining in the pool was deemed to pose too much of a risk to the council's finances.

Four of Worcestershire's six district councils and the county council agreed to form a Business Rates Pool in April 2013, following the Government's decision to allow local authorities to keep a portion of the Business Rates they collected locally.

The Government set a minimum amount of money councils could expect to receive each year, known as the baseline, which for MHDC is about £1.6million. A safety net system is also in place meaning if MHDC's share of Business Rates falls below a certain level, the Government will top it up to about £1.5million.

However the safety net payment is not available to MHDC while it remains in the WBRP.

In the last two years the WBRP has been able to make up the shortfall,  but the recent decision to recalculate the amount purpose built GP surgeries pay in Business Rates has had a huge impact.

Following the ruling a number of GP surgeries made successful appeals to the Valuation Office Agency against the value given to their property in 2005 and 2010, which has cost MHDC a one-off payment of £1.2million and £160,000 a year ongoing.

Other councils across Worcestershire have also been affected and as a result the WBRP does not have the money to cover any future losses.

Figures show if MHDC remained in the pool during 2016/17 it could lose as much as £212,000.

Cllr Paul Cumming, portfolio holder for finance on Malvern Hills District Council, said: "We're disappointed we have had to make this decision but remaining in the pool poses an unacceptable level of risk to our finances at a time when we are already facing cuts to our government funding.

"We will keep this decision under review and as Business Rates income improves over the next few years hopefully we will be in a position to rejoin the pool at a later date."