Sadiq Khan (Parliamentary Under-Secretary (Community Cohension and Fire and Rescue Service), Department for Communities and Local Government; Tooting, Labour)

I would like take this opportunity to explain the clause. It allows the Secretary of State and Welsh Ministers to make regulations that make provision for billing authorities to retain a proportion of the BRS revenue they collect to meet the expenses they incur in collection or recovery—referred to in the Bill as “administrative expenses”.

Where BRS is collected as part of the annual billing round, the costs will be met from the BRS revenue. Where billing authorities decide to levy the supplement outside the normal non-domestic collection round, the costs of collection will not come from the BRS revenue and will instead be met by the levying authority. Options for how administrative expenses should be calculated will be set out in the consultation paper that we propose to issue shortly on our proposals for secondary legislation.

Brian Binley (Northampton South, Conservative)

It is a pleasure to serve under your chairmanship, Mrs Dean. I have some concerns about the clause. I preface my remarks by saying that I am very worried about giving opportunity to any Government body to grab more money than they need to have for a given project. I have already mentioned that parking charges are now being used to supplement local government revenue incomes, rather than to provide a service to local communities. I  am concerned that the same sort of thinking, in the less scrupulous of our councils, might take place in this respect, too.

I have two concerns on which I seek clarification, the first of which is about the difference in billing. Subsection (1) makes it clear that the billing authority has the ability to recover moneys for administrative costs from the moneys collected through the BRS project. However, the clause then states that the authority can do that only if the information is given prior to the beginning of the financial year, and it seems from the impact assessment that when billing is undertaken as a separate exercise, the cost of collection will be met from the upper-tier authority’s own resources. So, if there is good notice for collection to be made as part of the normal collection of rates, it is the billing authority’s right to take those costs out before it hands the money back to the levying authority. If, however, the levying authority does not ask for a rate until after the beginning of the financial year, it seems that that cost falls on the upper-tier authority’s own revenue budget. Therein lie the sort of caveats that concern me—such as the ability to raise money that is not properly controlled and not transparently projected, but which adds to local authorities’ income streams.

First, will the Minister clear up the issue of those two ways of charging for the collection process? Secondly, how will we be assured, bearing it in mind that money might be coming from the general revenue budget of a given levying authority, that that money will be properly and transparently accounted for, so that people can have faith that money is not being leaked out into other budget areas for purposes not directly ascribed by the Bill?

Sadiq Khan (Parliamentary Under-Secretary (Community Cohension and Fire and Rescue Service), Department for Communities and Local Government; Tooting, Labour)

I thank the hon. Gentleman for his well-articulated concerns. I agree that we need to keep costs to a minimum. We do not want wastage, and we need to ensure that there is a disincentive in respect of it. One reason for trying to synchronise the collection, with the BRS collected as part of the annual billing round, is to minimise cost duplication. On his point about reassurance, in the consultation for the secondary legislation we will set out the details of the administrative costs incurred in collection or recovery. That consultation is important. He may be reassured because he will be able to respond to the consultation and see the other responses. He is right that we cannot have a situation in which the upper-tier authority’s general revenue account is incurring an additional cost because of the failure to synchronise the collections. I hope that he will become involved in the consultation and that we can assure him that there is no additional wastage.