Concern for Peterborough businesses if government support ends as rates deficit hits £40m

The council tax collection for 2020/21 is expected to be in deficit of £1.4 million, according to the city council’s finance chief Peter Carpenter.

The director of resources also told Monday’s Cabinet meeting that the estimated deficit for business rates is £45.5 million which will be almost entirely shared between the council and the Government which has provided financial support.

In addition, the council tax support scheme will rise from 32 per cent to 33 per cent.

Mr Carpenter said: “Council tax collection for 2020/21 is estimated to be in deficit of £1.419 million.

“This will be shared between the council, police and fire authorities in proportion to Band D council tax levels for 2021/22.

“The business rates surplus is slightly more complicated as there is a lot of supplementary legislation coming through at the moment.

“As at March 31, 2021, the estimated deficit is £45.5 million, however, this includes £41 million linked to business rate relief given as a direct result of Covid-19, so the balance from that is the actual non-collection for the year.

“This will be shared between the city council, the Government and the fire authority.

“I have to add that these values are based at the moment on November 2020 data and will be updated for December data before entry onto the National Non-Domestic Rates (NNDR) form which has to be submitted to the government by January 31, 2021 and is the key form in terms of looking at all the numbers.

“Due to Covid-19, regulations came into effect on December 1, 2020 to spread any deficit caused by the coronavirus pandemic over the next three years.

“The Government are also funding 75 per cent of irrecoverable tax losses and we are running through those calculations at the moment.

“That will of course affect or impact Tranche Two of the council budget.”

Cabinet member for communities Cllr Irene Walsh asked: “I would like to know a bit more about the Government support for the non-collection of council tax and business rates.

“In his estimation, how helpful has that been and what significance will it have for us in setting our budget, both now and in the future?”

Mr Carpenter replied: “It’s been a great help this year and I think there’s been a lot of work done over the last two to three months within councils helping the Government setting out what their deficits will be.

“We’ve had guidance from the Government towards the end of December and further guidance is still coming out as to how we work and what actual numbers we put in place.

“It would be nice if the Government funded us 100 per cent, but to be honest 75 per cent is very good and its in line with what the Government funded in terms of the other losses of income from fees and charges support.

“What worries me more is next year what will the non-collection of council tax and business rates be in 2022/23?

“As the report states £41 million of relief was given for non-domestic business rates this year, but will that continue next year?

“And if not, how able are those businesses in retail, hospitality and leisure able to cope with the knock-on effect into 2022 and 2023?”