The Valuation Office Agency (VOA) has reviewed business rates nationally and has put a rateable value of £29.5m on Hinkley B – less than two years after an appeal by the station’s owners, EDF, reduced the value of the station from almost £12m to just over £8m.
The appeal punctured a black hole into West Somerset Council’s finances as it had to pay £1.6m from its reserves to cover part of the refund – and lost £315,000 a year in business rates funding.
The new valuation, due to come into effect in April next year, could trigger another appeal by EDF, leading to further financial uncertainty for the council that is already facing serious funding challenges.
The Leader of West Somerset Council, Cllr Anthony Trollope-Bellew, and Deputy Leader, Cllr Mandy Chilcott, this evening (Wednesday) met Bridgwater and West Somerset MP Ian Liddell-Grainger, to enlist his support in making approaches to the Government and the VOA.
According to figures, the average of all authority changes in valuation is 6.5% - but for West Somerset it is 84.1%, the largest in the country - and the massive hike is virtually all down to the revaluation of Hinkley B.
The council is urgently seeking clarity from the VOA and hopes the MP will add his support. It also wants safeguards from the Government.
Cllr Trollope-Bellew said: “The business rates system is extremely complex. On the face of it the substantial increase in the valuation of Hinkley B should be good news for the council and provide us with extra funding at a time when we really need it.
“However, we know to our cost that valuation appeals can be successful and this presents us with significant uncertainty as we continue to budget for the future. I would like to make it abundantly clear that we have no criticism of EDF – it is the system that is causing the problems.”
Initial indications of how the new valuation will impact on the Council’s share of business rates are a concern. It is anticipated the “Tariff” the Council pays will increase by £2.7m, to £5.8m per year.
“However, as we need to make a prudent provision for a likely appeal, the Council is forecasting that its share of business rates under the funding system next year will not cover this significant increase in costs. The “safety net” in the system will cover the majority of this cost but it will mean our funding overall is expected to reduce by a further £330,000 per year – placing additional pressure on our finances,” added Cllr Trollope-Bellew.
Debbie Rundle, on behalf of West Somerset Council,01984 635280 or 01823 356407 or 07714 759899 email firstname.lastname@example.org