Business community consultation

The Council will propose its 2021/22 budget through its Revenue Estimates and Council Tax report to be published on 12 February 2021. This report will be put to Council for consideration and approval on 1 March 2021.

If any business rates payers would like to make any comments or request further information or a meeting to discuss the budget proposals before then, please contact Jason Blackhurst on 020 7974 4729 or write to jason.blackhurst@camden.gov.uk by 5 February 2021.

 

 

Financial challenge

Since 2011, core government grant funding has been reducing each year in real terms. In December 2018, the Council forecast a growing budget deficit over the three years to 2021/22 of £35m to £40m, from a combination of rising demand and cost pressures coupled with government funding reductions. In order to address this, Cabinet considered and approved a programme of savings and investments designed to ensure the Council can continue to operate on a sustainable and sound financial footing. The proposals were developed using outcomes-based budgeting, and involved a detailed, evidenced-based examination of how the Council can best use the reduced resources available. In addition the Council is facing a significant financial challenge following the global pandemic – one that has the potential to severely undermine and threaten our financial sustainability and resilience.  The resulting financial pressure will have a significant and long-term impact on the Council and its medium term financial position.


The Review of Medium-term Financial Strategy report  to Cabinet in December 2020 sets out the council’s latest forecast and a progress update on year two of the strategy as well as the financial impact felt as a result of Covid-19. The December report also provided detail on preparations towards setting the 2021/22 budget. 
 

 

Supporting business

We know that the economic impact of COVID-19 on business has been tremendous. 

Throughout the outbreak of COVID-19, the Council has been swift to communicate new business support opportunities through all our communication channels including the website, the BIDs and the Business E- Newsletter. We have also created a toolkit to support businesses to reopen and downloadable poster

Over 4000 local businesses have received grants through the small business, retail, hospitality and leisure and discretionary grant funds, with a value of over £75m. The council is in the process of implementing the latest scheme, which includes a discretionary element, with details on our website. 

For those businesses in our properties who have contacted us about their rent, we have offered our business tenants rent flexibilities and deferments - 215 deferrals of rent (out of over 700) amounting to over a £1m in delayed income collection.

We have pulled together a holistic place-based programme of work- the Camden Future Highstreets Programme. The programme seeks to build on the work undertaken in the re-opening phase, acting quickly with interventions on the ground with a test and learn approach that responds to the immediate pressures of COVID on our highstreets and test interventions that could support the transformation of our highstreets in the medium term.

As part of the programme, a number of Streateries have been implemented across Camden, and will continue to be rolled out, in order to support the hospitality sector in the post COVID-19 recovery. 8 Streateries have been opened in Camden. We’re working on a plan for supporting streateries over the winter and / or bringing them back in the Spring and looking at new areas.

Furthermore, we are taking a grassroots approach to act on what businesses and residents are telling us- there is a live common place:  https://camdenfuturehighstreets.commonplace.is/

We commissioned two, free pop-up business courses – Business resilience and business start-up with over 150 attendees. Both courses were free and provided training to existing businesses seeking to develop skillsets to insulate their businesses from the economic impact of COVID-19, and to those who want to start or restart their own business. 

The council has also provided guidance and information for businesses to re-open safely on the council website. 
 

Business rate changes

The two main elements of a business rate bill - rateable value, which is based on the open market rental value of property, and the business rate multiplier, which is used to calculate bills - are determined by the Valuation Office Agency. This is a central government agency and Camden Council has no control over rateable values nor the multiplier, statutory discounts or reliefs. 

In the most recent spending review the government has announced that the Business rate multiplier will be frozen for 2021-22. The government is also considering options for further Covid-19 related support through business rates reliefs although details of this is not clear at this stage. 
 

 

Business rate retention

Prior to 2013/14, councils handed business rates they collected to the government and received a share back as part of overall government grant. In 2013/14, the government implemented reforms which allows councils to retain a proportion of the business rates they collect in exchange for a reduction in their grant funding. 

For the last three years Camden, along with all London authorities and the GLA, have been participating in a pilot scheme to pool business rates income across the capital and retain an increased proportion of any business rate income growth, as the government sought to make moves towards greater local financial autonomy.

Camden welcomed the pilot pool approach as a step towards wider devolution. We have strongly supported the principle that Councils should retain more funding generated locally as part of our advocacy of wider devolution as a means of improving outcomes by moving decisions closer to the residents and businesses they effect. We argue that services that have a direct relationship to business should be transferred to councils including services that can help tackle key infrastructure challenges, including housing, transport and digital connectivity. In turn, we are creating a circular economy by encouraging greater participation of SMEs through our procurement processes.

The 2019 Spending Round announced that the implementation of a new model for Business Rates would be deferred again, to April 2021, however on the 28 April 2020 the Government confirmed that the review of relative needs and resources and the move to 75% business rates retention will no longer be implemented in April 2021 creating more uncertainty around local authority finances in the medium term. Whilst London Councils have agreed to continue with the current pooling arrangements in 2021/22 to benefit from a share of business rates above an agreed baseline, the retention rate for London will remain at 67% of income above the baseline with the GLA keeping 37% and councils keeping 30%. 

There are also a number of uncertainties to consider such as the ongoing negative impact of the pandemic on business rates in the capital and the possibility that Government may still implement a ‘reset’ of baselines. There is also uncertainty around the level and/or continuation of reliefs and grant schemes introduced in 2020-21 to support businesses with their rate bills.

If the Council operated outside of a business rates pool, it would be required to pay a 50% levy on the business rates income growth it retained. However, London Councils Leaders’ Committee have agreed in principle to support a pool for London under the 67% retention rates. The benefit of a London wide pool would be that collectively, London would pay a lower levy rate on growth than the individual authorities would if they operated outside of the pool. 

In light of the pandemic and the ongoing uncertainty around the future trade relationship with the EU the government will, as before, only provided a one-year Spending Review covering the financial year 2021/22. This will give local authorities limited assurance in terms of their financial stability for the coming financial years.

The Review of Medium-term Financial Strategy report to Camden’s Cabinet in December 2020 set out an overview of the council’s financial position, including our plans to address the medium term funding deficit and an update on preparations towards setting the 2021/22 budget. See the supporting documents below and have your say on proposals.
 

 

Supporting documents

A number of additional supporting documents are also provided on this Council’s financial strategy website link. The most recent documents provided for the December update are:

Review of Camden Council’s Medium Term Financial Strategy

  • This report provides an update of the council’s 3-year savings programme. 

2020/21 Financial Outturn Forecast Update (Month 6 - September)

  • This report provides an update on the revenue and capital financial forecasts for 2020/21 as at quarter 2, and notes any significant risks that have been identified as having the potential to affect the outturn as currently projected.

The Council can provide further information on its revenue or capital estimates for next year on request.