Millions lost in council tax and business rates in Northumberland during pandemic

County Hall in Morpeth.County Hall in Morpeth.
County Hall in Morpeth.
Northumberland County Council has reported multimillion-pound deficits in its council tax and business rates collections after a Covid-hit year.

A report on the authority’s collection fund balances for 2020-21, presented to the Tuesday, January 12, meeting of the cabinet, stated that the council tax shortfall is £2.55million.

The council’s share of this is £2.38million, with the remainder relating to the precept of the Northumbria Police and Crime Commissioner.

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In terms of business rates, the deficit is £42.51million, with the council’s share being £21.43million. The other £21.08million is the Government’s proportion.

However, the business rates figure largely relates to the extension of rate reliefs announced by the Government in response to the pandemic and the council was reimbursed through direct grants, and therefore the impact on the authority’s general fund will only be £1.55million.

Both deficits can be spread over a three-year period in the council’s budgets, but the report to councillors also highlighted that in the Spending Review 2020, the Government said it will compensate councils for ‘75% of irrecoverable loss of council tax and business rates revenues in 2020-21 that would otherwise need to be funded through council budgets in 2021-22 and later years’.

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