To ask the Scottish Executive, further to the answer to question S1W-5176 by Mr Jack McConnell on 31 May 2000, whether it will place in the Scottish Parliament Information Centre a detailed analysis of the computation of the estimate of #1,550 million in respect of non-domestic rate revenue in 2000-01; whether this estimate was obtained using information obtained from local authorities or assessors and to give details; whether it will also provide a detailed breakdown for each local authority of the estimated non-domestic rate revenue for 2000-01, and what its estimates are of any expected losses from (a) appeals and (b) transitional relief for (i) Scotland and (ii) each local authority.
The calculation of the estimate of non-domestic rate income used in financial planning for 2000-01 is detailed below. Estimates were made at a Scotland level, not for individual authorities. A breakdown of estimated rate revenue for 2000-01 for each local authority is not available.
Gross rate income for 2000-01 £1,921 million
minus Transitional Relief £ 70 million
minus Mandatory Reliefs1 £ 205 million
minus Other reductions2 £ 55 million
minus Prior-year adjustments3 £ 40 million
Net rate income for 2000-01 £1,550 million
Notes:
1. Unoccupied/partly unoccupied property, churches, charities, rates rebates and rural rate relief2. Hardship, charities & other organisations, sports clubs, rural rate relief, rates written off and provision for write-offs, refunds of overpayments interest, bad debts previously written off now payable, late additions to the valuation roll now payable and appeals.3. The main element of prior-year adjustments is the repayment of rates for earlier years as a result of successful appeals.
To calculate the gross rate income an estimate of the total rateable value in Scotland in 2000-01 was multiplied by the poundage rate. The rateable value in 2000-01 was based on the rateable value in 1999-2000 (obtained from annual returns made by the Assessors) adjusted by the estimated 12% revaluation factor arising from the revaluation of Scottish business properties in 2000. The rate poundage, set with a view to maintaining the total tax take in real terms, was adjusted to take account of inflation (1.1%) and the ultimate losses to the rates base due to successful appeals (3.6%).
Estimates of the costs of the 2000 Transitional Relief scheme are modelled using the sample survey of 10% of non-domestic subjects in Scotland. Other estimates (including estimates of the continuing costs of the 1995 Transitional Relief scheme) are based on estimates returned by authorities in previous years.The reduction in income in 2000-01 from appeals following the 2000 revaluation is estimated to be less than £0.5 million. As appeals losses transpire they will be included in the prior-year adjustment figures for subsequent years. Experience of the 1995 revaluation has shown that the main reductions from appeals are likely to fall in 2001-02 and 2002-03.
A paper showing how the Scottish Executive calculated the revaluation factor, the rate poundage and a description of the 10% survey of non-domestic subjects is currently available from SPICe.