Dan Peters 03 June 2019

Government pays £15m to councils after business rate 'error'

The Government may have to pay out up to £15m to councils after it made yet another error in its business rate pilot administration.

It admitted it will be making ‘special payments to a number of local authorities’ after making the same error in the formula that prompted it to order a review last year.

The Ministry of Housing, Communities and Local Government (MHCLG) permanent secretary Melanie Dawes said considering former Valuation Office Agency chief executive Andrew Hudson has carried out a review into the department’s oversight of the business rates system in 2018 it was ‘all the more disappointing that the incorrect formula in the guidance note, which originated from the computation error, which was discovered last year, was not corrected before that guidance note was reissued’.

Ms Dawes said the ministry was ‘looking into the precise circumstances of how this happened’ and she had now decided to ‘accelerate and widen’ a post-implementation review of the Hudson review.

In a letter to auditor general Amyas Morse, Ms Dawes said she would commission a ‘broader review, for which we intend to appoint external advisers’.

The letter read: ‘This year, there has been no mistake in any of the calculations, nor any payments, relating to the business rates pilots.

'However, as last year’s error was corrected for, officials failed to update the relevant guidance note.

'As a result the NNDR1 [national non-domestic rates] guidance note for the financial year 2019/20, which was issued to local authorities on 17 December 2018, contained the same error in the same formula.

‘The incorrect formula has the impact of exaggerating the forecast benefit of participating in a pilot.

‘Given that the financial year has already started, and particularly since the error in the guidance repeats the same mistake as last year, the secretary of state has exceptionally decided to offer a goodwill payment to those councils that used the incorrect guidance for their financial planning in 2019/20 and where the consequences of doing so could be more difficult to mitigate.’

SIGN UP
For your free daily news bulletin
Highways jobs

Senior Lawyer (Litigation)

West Northamptonshire Council
£49587 - £52860
Would you like to join a local authority where you can progress your legal career and be supported to excel professionally? If so, join the Legal Team at West Northants Council, one of the newest and the fourth biggest Unitary Council in England. You wi Northampton
Recuriter: West Northamptonshire Council

Tree and Landscape Officer

Sandwell Metropolitan Borough Council
£42,839-£48,226
Are you passionate about trees, landscapes, and urban sustainability? Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Employee Support Specialist

Sandwell Metropolitan Borough Council
£31,537-£36,363
An exciting opportunity has arisen to join our friendly and professional HR Employee Support Team. Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Part Time Business Administrator - Residential Home

Essex County Council
£25081.00 - £28099.00 per annum + Pro Rata
Part Time Business Administrator - Residential HomePermanent, Part Time£25,081 to £28,099 per annum, full time equivalentLocation
Recuriter: Essex County Council

Transformation and Innovation Manager

North Yorkshire Council
£51,356- £55,539
Do you thrive in a dynamic and innovative environment? Selby, North Yorkshire
Recuriter: North Yorkshire Council
Linkedin Banner