Plea for help on rates shortfall

Hartlepool MP Iain Wright.
Hartlepool MP Iain Wright.

A DELEGATION from Hartlepool has met with government ministers to highlight major concerns about the impact controversial changes to the business rate collection scheme will have on town.

Local authorities currently collect business rates on behalf of the national pot with Hartlepool Borough Council annually collecting about £29m, but receiving £40m back from the Government as a result of redistribution.

Dave Stubbs, Hartlepool Borough Council chief executive

Dave Stubbs, Hartlepool Borough Council chief executive

Under controversial changes, coming in from April, councils will collect and keep their own business rates with the rest topped up from central government.

But the fear is that because Hartlepool council is heavily reliant on a small number of businesses, including Hartlepool Power Station, to provide the bulk of the business rates that the authority could be left with a major funding shortfall if anything were to happen to those businesses.

The nuclear power station alone provides around £4m, or 17 per cent of the total revenue collected, and finance chiefs fear there could be a major shortfall if the power station had to close for any period of time.

Hartlepool MP Iain Wright met with Brandon Lewis MP, Parliamentary Under Secretary of State for Communities and Local Government, in London yesterday afternoon and stressed the town’s “unique” circumstances.

He was joined by Dave Stubbs, chief executive of Hartlepool Borough Council, chief finance officer Chris Little and Labour councillor Christopher Akers-Belcher, the leader of the Labour Group.

Mr Wright said: “The main objective of the meeting was to highlight that Hartlepool is a special case when it comes to business rates and the heavy reliance on the power station. We have put our case forward and the minister seemed genuinely shocked with the figure of 17 per cent and he said he would go away and have a look at it.”

The Hartlepool delegation was pushing for nuclear power stations to be exempt from the new localisation of business rate scheme.

Mr Stubbs said the council was aware that the power station could be shut down on occasions for a variety of reasons and said under the new scheme the council has to make up the first 7.5 per cent shortfall, which could be as high as £1.7m.

That is money the cash-strapped local authority would have to find and while Mr Little said the council had recognised the risk and put some money aside for next year that was only “one-off” money and the risk would be year on year.

Mr Wright said the town is in an unusual and “vulnerable” position because half of the total amount of business rates collected comes from just 20 companies.

He said if one of those business were to close or re-locate if would have a major impact on the town’s tax raising abilities and a knock-on affect on services provided by the council.

Coun Akers-Belcher said: “The success of today is we have highlighted that Hartlepool is in a unique situation and we will have to wait and see what comes back.”