Bath & North East Somerset Council has called upon the Government to provide greater funding to cover the loss of Council Tax income from student properties in the area.
In a submission to the Government’s consultation on the future of local government finance, the Conservative-run council has called upon the Government to provide greater compensation to local authorities for the loss of income from student properties, which are exempt from paying Council Tax.
In the coming years local authorities will become increasingly reliant on income generated from Council Tax and Business Rates, with the Council’s core government grant being replaced by a new system whereby more of the Business Rates collected in the area will be retained locally rather than by national government.
As a result, B&NES has suggested that one way to replace the loss of Council Tax income from student housing could be to charge Business Rates on commercially-provided student accommodation, such as large-scale student accommodation blocks, in the same way as other commercial premises.
The issue has become increasingly prominent in Bath over recent years, with an increase in the number of dedicated student accommodation blocks being developed in the city.
Councillor Charles Gerrish (Cons), Bath & North East Somerset Council’s Cabinet Member for Finance & Efficiency, said:
“Students are currently exempt from paying Council Tax and we do not believe this should change. Those who are studying for their future careers already face significant costs and most students would simply not have the ability to pay.
“However, where there are organisations operating on a commercial basis – such as the large-scale student accommodation providers – we do believe the Government should look at ways to ensure they pay their fair share towards to the cost of local services.
“Charging commercially-run student accommodation providers at least some level of Business Rates would bring them in line with other businesses and mean a more level playing-field.
“This would not apply to landlords who own a small number of student lets, it would only apply to the larger-scale commercial organisations or those with a large number of properties operating on a commercial basis.
“We hope that the Government considers our suggestion, or something similar, very carefully as this is becoming an increasingly pressing issue both locally and nationally. At the very least, with local government finance changing significantly in the coming years, the Government should properly compensate councils for the Council Tax income which is not charged on student properties.”