to consider the following question received in accordance with Council Procedure Rule 8;
a.From Cllr Brazil to Cllr Baldry (lead Executive Member for Environment):
‘How much extra money will be raised by the changes to Parking Permit charges? (Please include the two 20% increases in subsequent years)’
b.From Cllr Brazil to Cllr Pearce (Leader of the Council):
‘How much money, by way of Government Grant, has been given to business rated holiday and second homes as a result of the COVID-19 Pandemic?’
c. From Cllr Brazil to Cllr Pearce (Leader of the Council):
‘What is the average total Council Tax (Band D) for local residents in the South Hams including the precepts for the Fire Brigade and Police?’
d. From Cllr Brazil to Cllr Pearce (Leader of the Council):
‘Taking into account Small Business Rate Relief, how much Council Tax or Business Rates do business rated holiday and second homes pay in the South Hams and how long has this been the case?’
Minutes:
32/20
It was noted that four questions had been received in accordance with Council Procedure Rule 8:
(a)Question from Cllr Brazil to Cllr Baldry (lead Executive Member for Environment)
How much extra money will be raised by the changes to Parking Permit charges? (Please include the two 20% increases in subsequent years)
In reply, Cllr Baldry informed that the permit changes were designed to ensure fairness and transparency by linking them to the Pay & Display charges in the area and not to raise additional income. It was also to increase the turnover of vehicles within a number of Council owned off street car parks. It was anticipated that the new permit pricing structures could lead to a change in peoples parking habits, possibly with fewer permits being purchased by up to 15%.
For these reasons, there has been no additional income built into our future year’s revenue budget for 2021/22 as although the prices would increase, demand was predicted to reduce and therefore the overall income in 2021/22 was predicted to be the same and have a cost neutral impact on the Budget. There could be an increase of £40,000 in 2022/2023 (i.e. the subsequent year). The income would of course be monitored regularly and reported to Members through the quarterly revenue budget monitoring reports as it was difficult to predict customer behaviour.
(b)From Cllr Brazil to Cllr Pearce (Leader of Council)
How much money, by way of Government Grant, has been given to business rated holiday and second homes as a result of the COVID-19 Pandemic?
Cllr Pearce advised that the total Government Business grants paid to self-catering accommodation was £13.265 million.
Cllr Pearce proceeded to inform that, when the first round of Business Grants of £10,000 and £25,000 were announced by the Government in March 2020, the Council lobbied the Treasury for second homes to be excluded from eligibility of these grants. It did not seem fair that second homes that were paying Council Tax were still contributing to the cost of local services through paying their Council Tax, and yet those second homes that were business rated (through the business rates loophole of being able to be business rated if they were available to let for more than 140 days) were eligible for grants of £10,000 and in some cases £25,000. The Council held off paying these grants for a couple of weeks until a response was received from the Treasury, whose view was that they were eligible and therefore the Council had no choice but to pay these grants as we were responsible for administering a Government Business Grants scheme.
The same issue had happened in November 2020 when the second round of business grants was announced due to the second national lockdown in November 2020. As Chair of the Devon Districts Forum, Cllr Pearce informed that she wrote a detailed letter to the Rt Hon Alok Sharma MP, Secretary of State for Business, Energy and Industrial Strategy (BEIS), which had the support of all eight Devon MPs and Devon County Council.
Self-catering holiday accommodation (second homes) was eligible for a Local Restrictions Support Grant of £1,334 or higher for the lockdown period. The point was made that it was inherently unfair for these types of self-catering holiday lets (second homes) to receive further public money when November was the lowest month of the year for holiday lettings income and many of these single households would have had no rental income in November in a normal year.
Unfortunately, Cllr Pearce confirmed that no response had ever been received from the Secretary of State for BEIS or from the Co-Director of BEIS and these properties therefore remained eligible for the Government Grant.
The Council had lobbied the Government to close the business rates loophole on multiple occasions. Devon had a large proportion of second homes and many of these had taken advantage of the current business rates tax loophole which allowed second homeowners to avoid paying any Council Tax or Business Rates on their properties. Currently, owners of second homes could apply to the Valuation Office to register their domestic properties for business rates if their property was available to let for a minimum of 140 days per year. If registered for business rates, a large proportion of these properties qualified for small business rates relief and were eligible for 100% small business rate relief and this in turn meant that they had no Business Rates to pay.
As Leader of the Council, Cllr Pearce clarified that she had highlighted this problem to the Treasury at the highest level, by personally giving evidence to the Treasury Select Committee in the Summer. The Council had also lobbied vigorously on this issue through providing evidence to the Government Business Rates Review and through the Council’s response to the Comprehensive Spending Review. We had lobbied through the District Councils’ Network, our Chief Executive had lobbied through the Local Government Association and other national bodies on the inequity of the current system and, in turn, their responses to the recent national consultations on the Business Rates Review and the Comprehensive Spending Review had also lobbied the Government to change the current system.
Finally, Cllr Pearce informed that the Business Rates Review conducted by the Government was due to publish its results in the Spring of 2021 and we remained hopeful that this issue would be addressed in the future overhaul of the Business Rates system.
(c) From Cllr Brazil to Cllr Pearce (Leader of the Council):
What is the average total Council Tax (Band D) for local residents in the South Hams, including the precepts for the Fire Brigade and Police?
In her response, Cllr Pearce stated that, as per Section 4.14 of the Executive report on the Draft Revenue Budget Proposals for 2021-22, an average Band D council tax bill in South Hams for 2020/21 was £1,990.82.
This was made up of £170.42 for the South Hams District Council share (9%), £1,439.46 for Devon County Council (72%), £221.64 for the Police (11%), £88.24 for the Fire (4%) and £71.06 for an average Parish/Town (4%).
(d)From Cllr Brazil to Cllr Pearce (Leader of the Council):
Taking into account Small Business Rate Relief, how much Council Tax or Business Rates do Business Rated holiday and second homes pay in the South Hams and how long has this been the case?
In response, it was noted that the Business Rates paid by self-catering accommodation property of any rateable value size, net of small business rates relief, was in the region of £1.23 million.
This was in an average year prior to the COVID pandemic where these businesses had received a 100% business rates holiday for Retail, Hospitality and Leisure.
The Council Tax paid by unoccupied but furnished property (which would include second homes) was in the region of £8.3million.
This information was based on live data on the Business Rates and Council Tax system and it was not possible to go back to previous years on a Live system without significant resourcing implications.