Finance Minister goes ahead with rate reform plan

The Finance minister has pressed ahead with a public consultation on revenue raising reforms of the rates system, despite failing to get the move endorsed by the wider Executive.

Caoimhe Archibald announced the consultation plan in a statement to the Assembly on Monday.

It comes after she failed on four occasions across October and November to get it listed on the agenda of the Stormont Executive for discussion.

The plan includes raising the cap on rates bills that applies to householders living in more expensive homes. The present cap applies to all homes valued in excess of £400,000. The minister proposes to raise the valuation at which the cap applies to £485,000.

There are currently 8,000 homes in Northern Ireland valued in excess of £400,000 and raising the cap would generate an estimated extra £2 million for the Executive each year.

The road-map for rates also proposes to reduce the discount for paying rates bills early from 4% to 2%. In the last financial year, more than 163,000 ratepayers availed of the 4% discount.

The proposed reduction in the discount to 2% would generate a further £4 million in annually recurring savings for the Executive.

The public consultation on those measures will now be launched in January.

The minister also announced a review of all current supports offered within the rating system, initially looking at the Small Business Rate Relief Scheme and Non-Domestic Vacant Rating exclusions.

Ms Archibald said her officials would also commence preparatory work on a new domestic revaluation that would see more than 800,000 residences assessed and revalued.

She is also commissioning research on the cost of doing business to assess how the non-domestic rating system can be potentially adjusted accordingly.

Ms Archibald has previously made clear that the DUP was responsible for preventing her paper on the proposed consultation getting on to the agenda of the Executive.

She has also expressed frustration that, due to the delays resulting from trying to get it raised at the Executive, a deadline had passed to allow the suggested measures to be implemented in time for the next financial year.

Papers can only go on the Executive agenda if Sinn Fein First Minister Michelle O'Neill and DUP deputy First Minister Emma Little-Pengelly jointly agree to it.

While Ms Archibald did not formally require Executive approval to launch the public consultation, she will need the support of other ministers if she intends to introduce any of the proposed measures once the consulting exercise is over.

Ms Archibald outlined her proposals to the Assembly on Monday.

"Today kick starts a vital process of work required to build a progressive rates system based on the principles of fairness and equity, which aligns and underpins Executive priorities, stimulates our economy and supports the growth of our taxbase by creating the conditions for businesses to thrive," she said.

"The rating system is the Executive's main lever to generate revenue and is critical for the funding of our public services, raising in the region of £1.5 billion annually.

"Rate relief provides important support to thousands of businesses and households. We must therefore ensure supports are targeted towards those who need it most or those who are vulnerable, and that any rate reliefs are meeting their policy objectives. The more revenue spent on rate support, the less there is for vital public services.

"I am therefore committing to reviewing every single rating support measure within a Strategic Review Cycle. To be clear review does not mean removal.

"The process I have announced is about ensuring the support we have in place is achieving the desired policy outcome and using the resources we have to best meet the needs of our citizens and businesses."

The minister added: "The plans I have set out lay the foundations to create a rates system that is sustainable and fairer.

"I am determined to deliver on this process to ensure the rates system is delivered efficiently and effectively, grows our taxbase and provides appropriate support for those who need it. Today is an important step in that journey."