THIS REPORT RELATES COUNCIL TO ITEM ON THE AGENDA

RESOURCES COMMITTEE FINANCE AND INFORMATION SERVICES

19 February 1998 NOT EXEMPT

NON-DOMESTIC RATES - RATES RELIEF FOR GENERAL STORES ETC IN RURAL AREAS

1 PURPOSE

1.1 This report explains the Rates Relief Scheme that will apply to certain General Stores etc in rural areas from 1st April 1998.

2 SUMMARY

2.1 To help retain facilities in rural communities, the Local Government and Rating Act 1997 provided for a new scheme of Rates Relief.

2.1.1 Mandatory Relief - gives 50% relief to a property which is the only General Store/Post Office in a rural settlement, if the rateable value is less than £5,000.

2.1.2 Discretionary Relief - the Authority may:-

• increase mandatory relief to 100%;

• give relief to a property which is the only General Store/Post Office in a rural settlement if the rateable value is between £5,000 and £10,000

• give relief to other properties in rural settlements with rateable values up to £10,000.

3 RECOMMENDATION(S)

3.1 It is recommended that:

• the Committee note the new mandatory relief which will become available from 1st April 1998

• the Authority does not operate the discretionary relief scheme in the meantime. -2-

• the Authority reviews its approach to the discretionary relief in the light of its Economic Development and Rural Strategies, and reports back to the Resources Committee no later than 26th November 1998.

4 CONSIDERATIONS

4.1 The new Rates Relief Scheme was introduced by the Local Government and Rating Act 1997.

4.2 The Scheme will work as follows:

4.2.1 mandatory scheme - relief of 50% is available to a property which

• is the only General Store/Post Office in a rural settlement

• has a rateable value of less than £5,000.

4.2.2 discretionary scheme - the Authority may:-

• increase the mandatory relief to 100%

• give relief to properties which are the only General Store/Post Office in a rural settlement with a rateable value of between £5,000 and £10,000

• give relief on other non-domestic properties in a rural settlement with rateable values up to £10,000, provided that the properties are used for the benefit of the local community and the relief would be in the interests of the Council Tax payers of the Stirling Council area.

4.3 Rural Settlements

4.3.1 The Scheme requires the Authority to compile and maintain a “rural settlement list” which identifies the settlements within which properties may be awarded relief.

4.3.2 The draft list had to be compiled by 31st December 1997 and comes into force on 1st April 1998.

4.3.3 Environmental Services designated the rural settlements. The list is shown in the Appendix to this report and has been available for public inspection from 1st January 1998.

4.3.4 Rural settlements must have a population of less than 3,000. The Scottish Office designated the area within which the rural settlements would be identified; that area excluded , , and Stirling.

4.4 Awarding Relief

Mandatory Relief

4.4.1 It appears that properties in only 9 of the rural settlements will be eligible for mandatory relief. This means that these 9 ratepayers will -3-

have their Rates Bills reduced to 50% which will save them a total of almost £3,200 in 1998/99.

Discretionary Relief

4.4.2 It would be possible for the Authority also to award discretionary relief to those ratepayers qualifying for mandatory relief and so reduce their bills to zero - that is by another £3,200.

4.4.3 The Authority also has the discretion to award rates relief on the only Village Store/Post Office within a rural settlement if its rateable value is between £5,000 and £10,000, However, even if the Council agreed in principle to award this discretionary relief, it appears that there would be no eligible ratepayer within the Stirling Council area at present.

4.4.4 The other option available to the Council is to award discretionary relief on other properties with rateable values up to £10,000, if ‘they are used for purposes which are of benefit to the local community’ and it would be reasonable ‘having regard to the interests of persons liable to pay Council Tax’ set by Stirling Council.

4.4.5 This option potentially opens up the relief scheme to other shops in rural settlements which are not the only General Store/Post Office and to a variety of other properties which could be considered as being of benefit to the local community.

4.4.6 However, in deciding whether or not to use this discretion the Council should be aware of the discretionary relief that is already available to charitable and voluntary community organisations. Also, any discretionary relief under this provision would need to be in the interests of the Council Tax payers of the Stirling Council area.

4.4.7 It is recommended that this Council does not operate the discretionary relief scheme until it has agreed its Economic Development and Rural Strategies.

4.4.8 Economic Development and Rural Strategies are at present being prepared for public consultation. It is recommended that the discretionary relief scheme be reviewed in the light of these Strategies and that the outcome of the review be reported to the Resources Committee no later than 26th November, 1998.

4.5 Advising Ratepayers

4.5.1 It is intended to write to the 9 ratepayers who are considered to be eligible for mandatory relief, inviting them to apply for this.

4.6 East of Water Charges

4.6.1 East of Scotland Water have indicated that they do not intend introducing a parallel scheme of rural reliefs on the non-domestic water and sewerage charges which Stirling Council bills and collects on their behalf. -4-

5 POLICY IMPLICATIONS

5.1 If the granting of mandatory relief to the only General Store/Post Office in rural settlements helps retain local facilities, it will further the Council’s strategic aims of Social Inclusion and Sustainability.

6 CONSULTATIONS

6.1 Environmental Services have drawn up the rural settlement list.

6.2 Consultations have taken place with Environmental Services, Community Services and the Policy Unit.

7 RESOURCE IMPLICATIONS

7.1 Mandatory Relief

7.1.1 The cost of mandatory relief will be met out of the non-domestic rates pooling arrangements, not by this Council.

7.2 Discretionary Relief

7.2.1 75% of the cost of any discretionary relief would be met out of the pooling arrangements; but the remaining 25% would be a cost to this Council.

7.2.2 If discretionary relief were awarded under paragraphs 4.4.2 to 4.4.4 above, the cost to Stirling Council in 1998/99 is estimated as follows:

• under 4.4.2 - £800

• under 4.4.3 - Nil because there are no qualifying premises.

• under 4.4.4 - the cost could be significant depending on the criteria adopted.

7.3 There are no personnel implications.

8 BACKGROUND PAPERS

8.1 The Local Government and Rating Act 1997.

8.2 The Non-Domestic Rating (Rural Areas and Rateable Values Limits) (Scotland) Order 1997.

8.3 The Local Government and Rating Act 1997 (Commencement No. 3) Order 1997. -5-

Author(s) Name Designation Tel No/Extension

John Risk Head of Exchequer Services 01786 443086

Approved by Name Designation Signature

Bill Dickson Director of Finance & Information Services

Date Reference

RC1902JR.DOC -6-

APPENDIX

Rural Settlements

• Aberfoyle and Milton of Aberfoyle • • Arnprior • Ashfield & • • • • Blairdrummond • • & • Brig O’Turk • • Buchanan Castle • Buchany • • • Cowie • • • • • • Fallin • and Clachan of Fintry • • • & Stronachlachar • • • Kinbuck • • • • • • • • Thornhill • •