{meta} Decision - Business Rates - Collection Fund Estimated Fund Balance Calculation 31 March 2023.

Decision details

Decision status: Recommendations Approved

Is Key decision?: No

Is subject to call in?: Yes


Salford City Council - Record of Decision


I, Councillor Jack Youd, Lead member for Finance and Support Services, in exercise of the powers contained within the City Council constitution, do hereby:


Note the £6.424m third (and final) year allocation of the phased 2020/21 estimated deficit to preceptors’ general funds in 2023/24.


Approve that a £2.035m surplus be declared as the estimated Collection Fund balance as at 31st March 2023 in respect of the business rates retention scheme.


Grant delegated approval to the Chief Finance Officer to approve the business rates estimate for 2023/24 and to notify the respective amounts to be distributed to the council and the Greater Manchester Combined Authority (GMCA) (in relation to its fire and rescue functions).


The Reasons are: that the Non-Domestic Rating (Rates Retention) regulations 2013 provide for the operation of the rates retention system through the council’s Collection Fund. They require a local authority to estimate the balance on its Collection Fund for the scheme as at 31st March each year and to notify the government and each relevant precepting authority of the amounts that have been calculated by 31st January in the preceding year. As part of the 100% rates retention pilot any balance is to be distributed to/borne by the council and GMCA (fire element) in the following year based on the prescribed share for each.


Options considered and rejected were: n/a the calculation is a statutory requirement.


Assessment of Risk: Medium – it is the tenth year of the BRRS and sixth of the 100% rates retention pilot. The potential cost of outstanding appeals is still an extremely volatile area and could continue to have a substantial impact on the ultimate balance. However, some detailed historical evidence has been gathered which does provide some reassurance as to the accuracy of certain assumptions made in the estimate. The Collection Fund will continue to be closely monitored during the year and will be reviewed at outturn 2022/23. The difference between the actual surplus or deficit at that stage will be factored into future estimated balance calculations.


The source of funding is: a £2.035m surplus declared as the fund balance means that distributions will be made to the council’s General Fund and GMCA (fire) in 2023/24.


Legal Advice obtained:Nicky Smith, Senior Solicitor

The Local Government Finance Act 1988 (as amended by the Local Government Finance Act 2012) provides for the operation of the non-domestic rates retention system through the Council's Collection Fund.  In that regard, the Non-Domestic Rating (Rates Retention) Regulations 2013 provide for the calculation of the surplus or deficit. The amount is to be estimated by 31st January in the preceding year and is to be apportioned in accordance with the provisions of the relevant legislation and, in the Council's case, the 100% non-domestic rates retention pilot.


As explained in the main body of the report, the Local Authorities (Collection Fund: Surplus and Deficits) (Coronavirus) (England) Regulations 2020 implemented an announcement by the Secretary of State in July 2020 that the repayment of collection fund deficits arising in 2020-21 would be spread over the next 3 years rather than the usual period of a year, giving councils breathing space in setting budgets. The Regulations therefore allow authorities to spread the estimated deficit on the 2020-21 collection fund over the 3 years 2021-22 to 2023-24. The regulations set out in detail how calculations are to be made in each of the 3 years. There is no provision in the regulations to allow authorities to opt out of the deficit phasing, or to adopt a different payment profile, so it is important that the Council complies with the requirements of the regulations.


Financial Advice obtained: the report is produced by the corporate accountancy team.


Procurement Advice obtained: n/a




The following documents have been used to assist the decision process.

Various reports and papers including business rates system reports, the Non-Domestic Rating (Rates Retention) regulations 2013, the Local Authorities (Collection Fund: Surplus and Deficits) (Coronavirus) (England) Regulations 2020 and appeals information from the valuation office agency.


Contact Officer: David Eden            Tel No. 793 3228


This decision is not subject consideration by another Lead Member.


The appropriate scrutiny panel to call-in the decision is the Overview and Scrutiny Board.



Signed: Councillor Jack Youd                                    Dated: 17th January 2023

Lead Member for Finance & Support Services




This decision was published on 18th January 2023.


This decision will come into force at 4.00 p.m. on 25th January 2023, unless it is called-in in accordance with the decision-making process rules.



Publication date: 18/01/2023

Date of decision: 17/01/2023

Decided at meeting: 17/01/2023 - Lead Member for Finance and Support Services Briefing

Effective from: 26/01/2023

Accompanying Documents: