Key Facts

• Local government has faced significant financial pressure since the start of the pandemic.
• The Bill aims to prevent coronavirus impact from being considered in material change of circumstance appeals.
• Relief schemes are expected to be timely and sufficient to meet ratepayers' needs.
• Valuation officers must distinguish between challenges related to covid alone and those involving normal material change of circumstances.
• £1.5 billion has been allocated for rating relief but it is difficult to determine if this amount is sufficient without specific guidance from the Government.
• The impact of coronavirus on rateable values is unprecedented compared to previous significant events like the 2008 financial crash and foot and mouth disease.
• From April 2017 to March 2020, nearly 160,000 appeals (MCCs) were lodged against business rate valuations.
• By the end of June 2020, this number had grown to over 300,000 and by March 2021, it reached 568,000.
• Local government had set aside nearly £3 billion in provisions for alterations of lists and appeals as of the end of 2019-20.
• The Bill aims to prevent rating appeals related to the pandemic.
• Local authorities must develop their own relief schemes after receiving guidance.
• A new business rates revaluation is taking place and will conclude in March 2022.
• The Bill is required to pass into law, followed by issuing guidance with distribution.
• Local authorities must devise a scheme quickly after receiving the guidance.
• Businesses need relief money now due to economic impacts of lockdown measures.
• Section 47 of the Local Government Finance Act limits local authority decisions six months after the financial year's end.
• The LGA welcomes the principle of the Bill as it mitigates uncertainty for local government.
• Manchester City Council calculated a potential need for £11 million in provisions, reflecting a significant increase in appeals due to material change of circumstances.
• Local discretion is seen as positive but challenges arise with fitting schemes within fixed sums and fulfilling promises set out in schemes.
• There is greater certainty for councils as they do not face a period of uncertainty due to potential successful appeals.
• The check, challenge, appeal process has been implemented but its full impact on the number of appeals from the 2017 list remains uncertain because the time window has not yet closed.
• Local government supports the Valuation Office Agency being adequately funded to manage the backlog of appeals and a potential new backlog resulting from future rating lists.
• David Mundell is chairing the Committee session.
• Andrew Agathangelou from the Transparency Task Force is giving evidence.
• The Bill aims to address phoenixing practices used by financially criminal individuals.
• The annual cost of fraud in the UK is approximately £190 billion.
• Only 0.03% of the amount lost to fraud, white-collar crime and economic crime is allocated as a resource for police enforcement.
• Only about 1% of the police budget goes towards fighting such crimes.
• The Transparency Task Force held an event titled “The Great Insolvency Scam”.
• There are concerns about the Insolvency Service abusing its powers, leading to engineered bankruptcies and negative impacts on individuals.
• Amendments tabled would require the Minister to report back on the extent of Bill usage and its effectiveness.
• The speaker refers to Violation Tracker database which lists $667 billion worth of infringements against US authorities, with half attributed to the financial services sector.
• There are concerns that UK is considered one of the worst places for economic and financial crime on an international scale.
• The Work and Pensions Committee led by Stephen Timms MP conducted a pension scams inquiry last year.
• The next witness is Kate Nicholls.
• Kate Nicholls is the chief executive of UKHospitality.
• UKHospitality represents 700 member companies operating 95,000 sites across the UK.
• The discretionary grants for supply chain businesses have not flowed through swiftly or seamlessly due to local authority allocation.
• Hospitality businesses derive most of their income from hospitality; 75% of supply chain businesses gain over 80% of their income from hospitality.
• Event caterers, business caterers and contract caterers are among the businesses excluded from grant support.
• Hospitality businesses have had an extra month of restrictions since April.
• A quarter of hospitality businesses cannot open until July 19th.
• The remaining businesses face a loss of £3 billion revenue due to severe restrictions.
• Business rates bills started affecting the sector from June 1st, amounting to £100 million for most affected businesses.
• London hospitality is operating at about 20% to 30% of normal revenue levels, while elsewhere it's around 60% to 70%.
• There has been a contraction in the market with 12,000 hospitality business closures from April 2020 to March 2021.
• The sector is facing £2 billion to £2.5 billion of rent debt and £6 billion of Government-backed loans.
• London's hospitality sector is particularly affected, with 70% relying on inbound tourism.
• Local authorities are urged to work with businesses to identify needs and use their discretion.
• Fewer than two hands can count the number of local authorities positively responding to Ministerial requests.
• The Bill aims to address but does not fully solve the use of company dissolution as a vehicle for fraud.
• About 17,000 UK corporate insolvencies occur annually, leading to about 1,200 disqualifications per annum.
• There are between 400,000 and 500,000 company dissolutions annually in the UK.
• The legislation does not set compensation mechanisms for creditors.
• Around 400,000 to 500,000 companies are dissolved annually in the UK, with about half being insolvent.
• Only 1% of strike-off companies go through a restoration process each year.
• 95% of company dissolutions are initiated by Companies House due to non-filing issues.
• Proposed reforms aim to improve the accuracy of data provided by Companies House.
• Swift suggests pre-strike-off screening and review by the Insolvency Service.
• Current three-year time limit for disqualification applications is considered insufficient.
• The Bill aims to extend compensation orders to dissolved companies.
• There are concerns about resource issues within the Insolvency Service, with an estimated 1,200 individuals being disqualified annually despite a higher number of corporate insolvencies.
• Duncan Swift acknowledges that while the bill is a step in the right direction, it does not go far enough.