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Mr. Clifton-Brown: On a point of order, Mr. Griffiths. I am sorry to interrupt the hon. Gentleman but, for clarification, can you tell us whether we are debating amendment No. 97, clause stand part and new clause 7, or will clause stand part and new clause 7 be debated separately? The Chairman: Clause stand part and new clause 7 will be debated together after this debate. Mr. Davey: Subsection (1) appears to give the Secretary of State the ability to make provision through regulation for the BID levy to be applied for, for a range of different matters. I am not sure whether the BID levy will be able to be used for the start-up costs of the BID. It is important to put that on the record and have clarification. I had hoped to look at the guidance notes, which the Minister kindly sent to all Committee members, but as hon. Members will recall, at the last sitting I was exceedingly generous and passed mine to the hon. Member for Cotswold, who appears not to have returned them. Mr. Clifton-Brown: When I arrived in Committee this morning I found that I did not have those guidance notes. I am not sure whether I dropped them on the way, in which case the cleaner will have found them on the stairs and, no doubt, they will have ended up in the dustbin. I can assure the hon. Gentleman that I have been making frantic efforts to try to recover them during this sitting. Mr. Davey: The hon. Gentleman can only imagine my relief. I wait in anticipation of the return of the said document. It is possible that this issue is clarified in the guidance, which is why I had intended to refer to that. The point is important because people who want to set up BIDs will want to understand whether they will be funding the commencement, foundation and preparatory work from their own pocket or whether that will eventually come out of the proceeds of the BID levy. If the Under-Secretary replies that the BID levy cannot be used to recompense people for start-up costs, that is a concern. That could be a barrier to setting up BIDs because, although costs may not be huge, it is possible that in some areas, especially where there are small businesses and no large businesses prepared to stump up the money to get the project off the ground, there will be no one to lead the way in providing the necessary seed corn for start-up. If the Under-Secretary says that the BID levy cannot be used for that purpose, we might wish to divide the Committee on the amendment, although I intended it primarily as a probing amendment. To make it clear to the Committee that there will be potentially significant start-up costs, bodies that have tried to pilot BIDs before this legislation reaches the statute book, such as the Circle initiative, have released documents to explain their experience of what is involved. The Circle initiative, in its document ''One year on'', shows that in the first stages—its step one, which it called ''building the partnership''—costs can be up to £20,000. Column Number: 353 Mr. Leslie: The hon. Gentleman makes a fair point on the clause, which provides powers to make regulations covering the ways in which local authorities may collect the BID levy from those liable to pay it. The amendment would include in the Bill that the regulations
The amendment is not needed because anyone putting forward a BID proposal can include in it a provision that the costs incurred in developing the BID are to be covered by the levy, assuming that the ratepayers vote in favour of the proposal and the BID is established. I hope that that answers the hon. Gentleman's point and that he will withdraw his amendment. Mr. Davey: That is a very helpful reply. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Question proposed, That the clause stand part of the Bill. The Chairman: With this it will be convenient to discuss new clause 7—BID: estimated bills—
A Billing Authority must, no later than 31st October in the year preceding a revaluation, send to nondomestic ratepayers an estimated Bill for the following financial year.'.
Mr. Clifton-Brown: I shall deal first with new clause 7. Some confusion arose because the original grouping placed clause stand part and new clause 7 with amendment No. 97, but I see that today's amended grouping separates them, as you kindly clarified, Mr. Griffiths. New clause 7 is a probing new clause. Businesses must have time and certainty to plan. Under the non-domestic rating system, an estimate is sent out by, I think, the beginning of December, when the rates have to be paid at the beginning of April. The new clause tests the Government's intention in relation to BIDs. It seems wholly reasonable that there should be some prior warning when a BID is to be brought into operation as to what businesses are likely to have to pay. After all, every business will have to pay the supplementary rate. It would be useful to know what the Government's intentions are. I wish to return to what happens when the financial arrangements of BIDS start to go wrong. I hope that they will not. If proper business plans are drawn up and followed, there will be no reason why the arrangements should go wrong. I hope that the BIDs are successful and exceed their business plan. However, in the real world it is likely that the finances of some will go wrong. What will be the process when that happens? Presumably, the billing authority, which is to act as guardian of the BID finances, will have some idea that the BID is overspending. In the early years, that may not be a problem, but it would be interesting to know whether the billing authority will have the power to alter the multiplier, if that is how such adjustments will be made. The guidance clearly indicates that the two options available for recovering extra rates are a Column Number: 354 multiplier and a supplement on the non-domestic rates bill, or a separate supplementary rates bill.In the event that the financial governance is wrong, what arrangements are in the Bill for putting it right? The Under-Secretary will probably tell us that that falls under the powers of the Secretary of State. That may be so, but the Secretary of State intervening in every BID that goes wrong seems a very centralist mechanism for dealing with something relatively simple that should be handled locally.
9.30 amMr. Leslie: The hon. Gentleman did not speak much to new clause 7, perhaps because there is some confusion about why he tabled it under BID arrangements, rather than revaluation, which is a subject that we shall discuss under part 5. The new clause proposes:
I suppose that the hon. Gentleman could make his argument on the basis of revaluation in general, but that seems a tangential issue to the subject of BID arrangements. However, if that was his intention, so be it. It would be difficult to apply the provision on the basis of BIDs, because it would be relevant only if the BID levy was calculated on the rateable value of property, which will not always be the case. Each BID will have the freedom to decide how it will calculate the additional levy, and we have set out the different options for such calculations in the working draft of the guidance. Sending an advance bill would be expensive and unnecessary. Clause 62 states that a list of the rateable values of properties following a revaluation will be available six months before the revaluation affects ratepayers' bills. The information will be available and in the public domain. Ratepayers who also pay a BID levy could refer to it if they wanted to calculate the amount of their BID levy after the revaluation. Issuing another bill would be an additional and unnecessary cost to a local authority involved in a BID and would not apply if BIDs chose not to base the levy on rateable value. Mr. Clifton-Brown: The new clause probably should have come under clause 62. Nevertheless, as I said in my opening remarks, there is a power in non-domestic rating to send out estimates. As the Minister will know, calculating provisional non-domestic rates is complicated. Even expert practitioners need to do incredibly difficult calculations, particularly when transitional relief is involved. The businesses involved in the BIDs are likely often to be very small, with meagre resources. They may be struggling to survive. Does the Minister envisage an estimate being sent out ahead of the bill that businesses in BIDs will receive on their doormats? Mr. Leslie: We may have an opportunity to deal with this later when we discuss revaluation in more detail, but we believe that the proposers of a BID will make the impact of any additional levy on ratepayers Column Number: 355 widely known. The information provisions with respect to BIDs are sufficient.We have deliberately introduced a clause to permit ratepayers more time to find out, in advance of revaluation, the potential changes to their liability. The current revaluation provisions do not include that. We are increasing the three months to six months. On balance, the extra cost and administrative burden to the local authority, in sending out two sets of rate bills, one of which would be far in advance of the new financial year, would be excessive. I hope that the hon. Gentleman will understand and accept that point. The hon. Gentleman asked what would happen if BIDs got into difficulties and who would cover that. I gave him an undertaking to write to him with more information, but I want to clarify that there would be protection in the form of opportunities for the Secretary of State to intervene, if necessary, to alter or terminate BID arrangements. There is also guidance, and I am happy to say that I have a spare copy to offer to any member of the Committee who wants to see it. On the deficit question, it is envisaged in the guidance that a BID would be likely to take the form of a company limited by guarantee. Therefore deficits would be the responsibility of the BID organisation. It would field any risks or liabilities in the way that any company limited by guarantee would do.
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