Local government finance circular 8/2021: business rates incentivisation scheme 2019-2022

Local government finance circular no. 8/2021

Chief executives and directors of finance of Scottish local authorities 

Chief executive, convention of Scottish local authorities (COSLA)

Our reference: A34488731
3 September 2021

Dear Chief Executive/Director of Finance, 

Business rates incentivisation scheme 2019-22

This Local Government Finance Circular provides details of the outcome of the Business Rates Incentivisation Scheme for 2019-20 and confirms that Scottish Ministers have taken a decision to temporarily suspend the Scheme for both 2020-21 and 2021-22 due to the ongoing impact of COVID-19.

The full background and terms and conditions of the revised Business Rates Incentivisation Scheme were set out in Annex N of the Local Government Finance Circular No. 9/2014 dated 11 December 2014.

Annex A sets out the sums to be retained under the Business Rates Incentivisation Scheme for 2019-20 only.

As a result of the impact of COVID-19 of £972 million in 2020-21 and £541 million in 2021-22 of Non-Domestic Rates Income (NDRI) has been converted to General Revenue Grant for the cost of COVID-19 reliefs introduced by the Scottish Government. In recognition of this, and that the Scottish Government continues to protect local government from the risk of any further NDRI losses, Scottish Ministers have confirmed that the Business Rates Incentivisation Scheme has been suspended for both 2020-21 and 2021-22.

Any enquiries should be addressed to me: Bill Stitt bill.stitt@gov.scot

This Circular is available on the Scottish Government website.

Yours faithfully

Wm Stitt
Bill Stitt
Local Government & Analytical Services Division

Annex A

2019-20 Business rate incentivsation scheme – sums to be retained for 2019-20 only

Local Authority	Sum to be retained (£)
Angus Council	0.014
Clackmannanshire Council	0.066
Dundee City Council	0.085
East Lothian Council	0.268
Falkirk Council	0.078
Midlothian Council	0.104
Moray Council	0.023
North Lanarkshire Council	0.563
Orkney Islands Council	0.197
Scottish Borders Council	0.016
South Lanarkshire Council	0.225
SCOTLAND	1.639

The figures included in this table are the sums to be retained by each of the local authorities listed and represent the 50 per cent share of the additional rates income generated in 2019-20. The other 50 per cent has been retained by the Scottish Government as set out in paragraph 10 of Annex N of Local Government Finance Circular 9/2014.

The local authorities listed should exclude the sums involved in returning their future non domestic rates returns but should note that these sums can only be retained in respect of 2019-20 only as the Scheme is subsequently temporarily suspended due to COVID-19.