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Nuclear power station rulings have 'massive impact' on councils' finances

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A group of councils have requested a meeting with communities secretary Greg Clark as they come to terms with major losses in business rates income as a result of a decision by the Valuation Office Agency.

Energy giant EDF has successfully negotiated a reduction in the rateable value of four of its nuclear power stations worth almost £35m to the company.

EDF’s saving will result in less money passed to authorities in areas where its power stations are based.

Hartlepool BC, where the plant accounts for about 20% of its business rates, saw a £16.1m reduction in rateable value, the largest of any of the affected authorities. The council’s chief finance officer Chris Little told LGC once inflation and top-up grants are taken into account, he was forecasting a cumulative loss of about £11m between now and the end of the decade.

Mr Little said: “One single event has had a massive impact. To replace that income we’d need to grow our small and medium enterprise businesses by 46% [from 2,700 to 4,900]. That sort of growth is not going to happen.”

The council had set aside £4.8m in preparation for a reduction in the rateable value of the power station, but has requested a meeting with Mr Clark to discuss the matter.

Lancaster City Council’s chief officer for resources Nadine Muschamp told LGC she was also seeking a meeting with Mr Clark after the amount EDF has to pay on its Heysham 2 site was halved.

Ms Muschamp said the decision had not only wiped out the opportunity to benefit from a projected £1.2m growth in business rates, but it had also pushed the council over the safety net threshold which will cost it about £400,000 a year.

Under the safety net system the government compensates councils for any fall in business rates receipts greater than 7.5% of their baseline.

Ms Muschamp called for a discussion about how best to incorporate “such huge” sites into the business rates retention system.

West Somerset DC also experienced a loss in business rates income as a result of a VOA decision to reduce the rateable value of the Hinkley Point B power station. The reduction equates to about £313,000 per year, more than treble the £100,000 per year the council had been planning for.


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