This briefing paper monitors the progress through Parliament of the Local Government Finance Bill 2016-17.
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The Local Government Finance Bill 2016-17 received its Second Reading in the House of Commons on 23 January 2017. It was approved without a division. The Public Bill Committee heard evidence from witnesses at its first two sessions on 31 January 2017. It then sat on 2 February, 7 February, 9 February and 21 February. The Bill completed its Committee Stage in the House of Commons on 21 February 2017.
Due to the General Election to be held on 8 June 2017, the Bill will make no further progress. It would need to be reintroduced following the General Election. The House of Commons approved a carry-over motion for the Bill on 23 January 2017. This would have permitted the Bill to resume in the 2017-18 Parliamentary session, but it does not apply when Parliament is dissolved and a General Election held.
100% rate retention – the subject-matter of part 1 of the Bill – was expected to begin in the 2019-20 financial year. Ministers have indicated that this deadline is unlikely to be met due to the Bill falling in advance of the General Election. Similarly, Government planning documentation to date has indicated that the Bill was expected to pass through Parliament in late 2017, but this deadline too is subject to developments after the General Election. This will also affect the other measures in the Bill, including infrastructure supplements for metro-mayors and new business rate reliefs.
The Government has not published an impact assessment for the Bill. However, it has published a number of factsheets on the individual policy elements of the Bill. It has also published Keeling schedules.
On 15 February 2017 the Government has published an initial response to the July 2016 consultation Self-sufficient local government: proposals for 100% business rate retention. This consisted of a summary of responses and response to consultation and a further consultation. The Bill provides powers (amongst other things) to introduce 100% business rate retention for local government.
A further consultation on needs assessment is to be published in summer 2018, with final decisions on the shape of the 100% rate retention system and needs assessment expected in autumn 2018. The aspects of the new system that will critically influence outcomes for local authorities – such as the role of needs assessment, how often ‘resets’ are to take place, and how rate revenue is divided in two-tier areas – are not found on the face of the Bill and are the subject of the ongoing consultation process. These are discussed further in section 2 of the Library briefing Reviewing and reforming business rates.