{meta} Decision - Business Rates - Collection Fund Estimated Fund Balance Calculation 31 March 2021.

Decision details

Decision status: Recommendations Approved

Is Key decision?: No

Is subject to call in?: Yes


Salford City Council - Record of Decision


I, Councillor Bill Hinds, Lead Member for Finance and Support Services, in exercise of the powers contained within the Council Constitution, do hereby approve that:


(1) an adjusted deficit of £37.573m be declared as the estimated Collection Fund balance as at 31st March 2021 in respect of the business rates retention scheme. The estimate includes one third of the calculated “exceptional balance” of £19.273m which is to be spread equally over the next three financial years.


(2) delegated approval be granted to the Chief Finance Officer to approve the business rates estimate for 2021/22 and 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.

New regulations have been introduced for calculating the 2020/21 estimated outturn position due to the impact of Covid-19 on the Collection Fund. If a fund deficit is forecast for 2020/21 then the financial impact of this is required to be spread over the next three financial years rather than just the next one.


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


Assessment of Risk: Medium – it is the eighth year of the BRRS and fourth 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. This volatility has only increased due to the ongoing impacts of Covid-19 on the economy. 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 2020/21. 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 £37.573m adjusted deficit declared as the fund balance means that contributions will be required from the council and GMCA (fire) in 2021/22. £31.138m of the adjusted deficit relating to extended retail relief and nursery discount will be covered by government funding.


Legal Advice obtained: yes


Financial Advice obtained: yes


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. 0161 793 3228

This decision is not subject to consideration by another Lead Member.


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





Signed: Councillor Hinds                                                    Dated: 5th January 2021

Lead Member for Finance & Support Services




This decision was published on 5th January 2021.


This decision will come into force at 4.00 p.m. on 12th January 2021, unless it is called-in in accordance with the decision-making process rules.



Publication date: 05/01/2021

Date of decision: 05/01/2021

Decided at meeting: 05/01/2021 - Lead Member for Finance and Support Services Briefing

Effective from: 13/01/2021

Accompanying Documents: