17 Dec 2018

Expanded North and West Yorkshire business rates pilot scheme approved

Business rates Finance

A combined bid by local authorities across North and West Yorkshire to retain most of its business rates growth to invest locally has been approved by the government.

The successful bid to create the North and West Yorkshire Business Rates Pool will mean that the existing business rates pool partners of Bradford, Calderdale, Harrogate, Kirklees, Leeds, Wakefield and York will be joined by Craven, Hambleton, Richmondshire, Ryedale, Selby and Scarborough councils along with North Yorkshire County Council in a new pilot pool scheme retaining 75 per cent of all business rates growth to go into a combined fund.

Over the next financial year, the expanded pool is predicted to generate £19m of funding, with a third to be retained by the pool and the rest going to member authorities. The authorities within the region could stand to gain up to £22.6m, as so-called tariff authorities like Leeds also retain levy amounts which otherwise would be payable to government.

The previous Leeds City Region business rates pool was established five years ago and was approved for the current financial year to trial keeping 100% of the growth in business rates for the member council areas of Bradford, Calderdale, Harrogate, Kirklees, Leeds, Wakefield and York.

The pool funding is used collaboratively on investments and projects to help drive and support regional economic growth. It particularly focuses on reducing digital isolation, inclusive growth, culture, sport and major events, business support, trade and investment and enabling new housing.

Previous investments have included projects supporting and coaching business start-ups and SMEs, those promoting inclusive growth and schemes delivering improved internet connectivity and skills development.

The new expanded pool area has a population of 3.1 million people and an annual economic output of £70.3 billion, with 1.4 million jobs and 137,000 businesses. At almost 4,000 sq. miles it covers 8% of England.

For the current financial year the Leeds City Region pool was able to be part of a pilot to retain 100 per cent of business rates growth for the year. For 2019/20 the percentage able to be retained by pilots is reduced to a maximum of 75 per cent. In preparation for this, the new pilot bid was presented with an expanded membership including more authorities across North Yorkshire.

Councillor Judith Blake, Leader of Leeds City Council, the lead authority for managing the business rates retention pool, said:

“While we are disappointed the percentage we were able to retain has fallen, we are pleased that our bid has been approved and we are determined to ensure the money is put to good to use driving economic growth for the benefit of the people of North and West Yorkshire.

“We have already proven when we combine our skills and resources the results can be spectacular, as shown with the amazing Tour de France Grand Départ, and the approval of our bid will enable us to work even more closely together to support the whole region to grow and offer opportunities for the benefit of all.

“The previous Leeds City Region pool was one of the most successful in the country and this wider pool with our new partners will enable us to do even more.”

Councillor Carl Les, Leader of North Yorkshire County Council, said:

“This is a really significant example of collaborative working. Together we have developed an approach that will both promote economic growth and support many services that the public values most.

“We have been charged with being innovative and forward-thinking in our continuing efforts to provide high-quality public services in the face of reducing budgets and I believe that is exactly what we have done.”

Councillor Tim Swift, Leader of Calderdale Council and Chair of the current Leeds City Region Business Rates Pool, said:

“The existing Leeds City Region business rates pool has supported some fantastic projects across the region – from initiatives to increase tourism to support for business growth, jobs and skills. It’s great news that our bid for a further phase of funding has been approved so that we can continue this good work.”

Councillor Susan Hinchcliffe, Leader of Bradford Council and Chair of the West Yorkshire Combined Authority, said:

“At a time when the local enterprise partnerships across West and North Yorkshire are proposing a merger to cover this combined area of 3.1 million people, it’s great that the next wave of our business rates pool will also cover this expanded geography. I’m pleased that this money, which has been generated locally – partly through our collaborative efforts to encourage businesses to grow and locate in the region – will be retained and reinvested for the benefit of local people.”

Notes to editors:

The North and West Yorkshire Pool aims to benefit the individual members and to further the aims of the North and West Yorkshire region as a whole. It has two key objectives:

  • To support the financial sustainability of the member authorities, both at an individual and a regional level;
  • To support regional economic growth by providing support to and working in collaboration with regional partners.

Under its terms member authorities will retain 75% of growth above business rates baseline income, with the remaining 25% being paid to government. This income will be shared out so that member authorities receive two thirds of the additional income generated through 75% business rate retention, one third in proportion to their share of total growth achieved above the 75% baseline and one third in proportion to population, the remaining third of additional income being retained by the pool.


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