Leeds City Region Business Rates Pool

1 Title

1.1 The Leeds City Region Business Rates Pool.    

2 Membership

2.1 City of Bradford Metropolitan District Council, Calderdale Council, HarrogateBorough Council, Kirklees Council, Leeds City Council, Wakefield Council and City ofYork Council.    

3. Commencement

3.1 This governance agreement comes into force on 1st April 2018 and will continueuntil the Pool is dissolved, either by Government or because any one of themembers formally leaves the Pool (see “Dissolving the Pool”, below).     

4. Rationale and Objectives

4.1 The LCR Pool exists to benefit the individual members and to further the aims ofthe Leeds City Region as a whole. The Pool has two key objectives:    

• To support regional economic growth by providing support to and working incollaboration with regional partners;
• To support the financial stability of the member authorities, both at anindividual and a regional level.

4.2 The Pool will receive 50% of business rates income collected above the 100%business rates baseline income generated by the member authorities, the sharewhich would previously have been paid to Central Government.    

4.3 This Pool income will be shared out so that member authorities receive 50% of theadditional income generated through 100% business rate retention, 25% inproportion to growth achieved and 25% in proportion to population, with 50% ofthat income being retained by the Pool. The only exceptions to this are set out inSection 8, below.     

4.4 Any variation to the arrangements set out in 4.2 and 4.3, above, will require theformal agreement of the Leeds City Region Business Rates Pool Joint Committee.     

5. Leadership and Accountability

5.1 The Pool will be led by a joint committee. The joint committee will comprise of theleaders of the councils making up the Pool. The joint committee shall beresponsible for:     

• allocating any excess income arising from the 50% Pool share as set out in 4.3above;
• any changes to the purposes for which the income received by the poolshould be used, but the principle that no authority should receive less thanthey would if treated individually, shall be maintained;
• agreeing the expenses to be deducted by the lead authority administering thePool;
• considering any applications for other councils to join the Pool;
• any variations to the membership of the joint committee; and
• any other matters relating to the administration and governance of the Poolincluding replacement of the lead authority.

5.2 The members of the joint committee will elect a chairperson.    

5.3 The joint committee will meet as and when required but no less than twice eachyear.     

5.4 The quorum for the meetings will be no less than 5 members. Leaders will be ableto nominate substitutes.    

5.5 Members will have equal voting rights and voting will be by simple majority. In theevent of a tie, the chair of the meeting will have a casting vote.    

5.6 The joint committee will be supported by officers drawn from the lead authority.    

5.7 The joint committee may establish any sub-groups or any officer forums that theybelieve to be appropriate.     

5.8 Minutes of joint committee meetings will be published as required by law.    

6. Lead Authority

6.1 The initial lead authority responsible for the administration of the Pool shall beLeeds City Council.    

6.2 The lead authority will normally act as such for a full year and may only be replacedat the year end. A lead authority wishing to relinquish the role at the year end mustgive a minimum of four months’ notice.    

6.3 Each member of the Pool will be jointly and severally liable for any paymentsrequired to the Department for Communities and Local Government but,notwithstanding that, the lead authority will take responsibility for all matters inrelation to the administration of the Pool including (but not limited to):     

• all liaison with DCLG and other government departments including thecompletion of all forms and returns associated with the Pool;
• administration of payments to and from the Pool and all calculationsrelating to the collection fund for the Pool;
• producing an annual report showing how income has been distributed andpreparing periodic monitoring reports for Pool members;
• calculation of the costs of administering the Pool which are to be deductedfrom the rewards of the Pool. If the excess income generated by the Poolwas insufficient to cover the administrative costs of the Pool in any year,then the shortfall would be shared between the Pool members inproportion to their spending baselines;
• The lead authority will ensure that the pooling arrangements, annualreports and other financial information is published and is freely availableon the lead authority’s website or elsewhere as appropriate.

7. Dissolving the Pool

7.1 This Pool may be revoked by Government after one year.    

7.2 If any member decides to leave the Pool the regulations require that the Pool willbe dissolved.     

7.3 Any authority seeking to leave the Pool should inform DCLG and all other membersof the Pool as soon as possible. Once the Pool has been established, this must be by30th September in any year, to allow the remaining members time to seekdesignation of new pool for the following year (see 7.4, below).     

7.4 The lead authority will make the necessary calculations and submit the requiredreturns associated with the dissolving of the Pool.    

7.5 The remaining members of the Pool may choose to form a new Pool and, if they wish,include new members for the following year (subject to new designation by DCLG).    

8. Treatment of Potential Losses in Income and Residual Benefits or Liabilities

8.1 The Pool will have a single safety net threshold set at 97% of its baseline fundinglevel. Authorities not participating in pooling arrangements who suffer reductionsin business rates income exceeding the safety net threshold would be entitled tosafety net payments. If an authority is a member of a business rates pool, the safety net payment to that individual authority could be lost because the lossacross the pool may not be as much as the 3% required to reach the safety net threshold.     

8.2 Authority(s) that would otherwise have qualified for safety net(s) will have theirshare of pool proceeds calculated so as to include what they would have receivedas a safety net payment.    

8.3 There is also a risk that authority(s) participating in the Pool will be worse off as aresult of their participation when compared with what their financial positionwould have been under the 50% Business Rate Retention Scheme, including receiptof Revenue Support Grant and Rural Services Grant.    

8.4 Authority(s) that would have been better off under the 50% retention scheme willhave their share of pool proceeds calculated so as to include what they would havereceived in a ‘no detriment’ arrangement, i.e. under the 50% retention scheme.     

8.5 Loss in income to Pool members in the circumstances set out above will be metproportionately from the Pool’s 50% share of the additional income generated bythe authorities within the Pool and the member authorities’ 50% share of thatincome. If that income is insufficient then the net loss will be shared amongst allmembers of the Pool in proportion to their spending baselines for the year to whichthe safety net(s) would have applied.     

8.6 Should losses incurred by the pool as a whole be sufficient to bring theGovernment’s ‘no detriment’ guarantee into effect, any funds received fromGovernment will be distributed to the member authorities in proportion to theextent of each authority’s losses when compared with what their financial positionwould have been under the 50% Business Rate Retention Scheme.     

8.7 Once such losses in income are resolved, any residual benefits or liabilities arising inregard to the Pool’s 50% share of additional income will be shared amongst all themembers of the Pool in proportion to their 50% share of the additional incomereceived from the Pool. Any residual benefits or liabilities arising in regard to the50% share of additional income apportioned to local authorities must be dealt withby the authorities themselves.     

The Leeds City Region Business Rates Pool Joint Committee is authorised to:    

• allocate any excess income arising from reductions in levy payments in accordance with the Leeds City Region Business Rates Pool governance agreement
• determine any changes to the purposes for which any such excess income should be applied, subject to the principle that no authority should receive less than they would if treated individually
• determine the expenses to be deducted by the lead authority administering the Pool
• consider any applications for other authorities to join the Pool
• determine any variations to the membership of the joint committee
• determine any other matters relating to the administration and governance of the Pool including replacement of the lead authority.

The Joint Committee will elect a chairperson

The Joint Committee will meet as and when required but no less than twice each year. The quorum for meetings of the Joint Committee will be no less than 5 members. Members will be able to nominate substitutes.    

Members will have equal voting rights and voting will be by simple majority. In the event of a tie, the chair of the meeting will have a casting vote.