Last reviewed 16 March 2021

The Department for Education (DfE) is seeking views on the proposal to centralise the payment of national non-domestic rates (NNDR), more commonly known as business rates, for state-funded schools from the 2022-23 financial year onwards.

Details of the consultation can be found at https://consult.education.gov.uk/funding-policy-unit/changes-to-the-payment-process-of-schools-business and the deadline for responding is 5 May 2021.

The DfE said that the proposal is aligned with the Government’s overarching objectives to reduce burdens and improve the existing business rates system.

This consultation exercise is particularly aimed at state-funded schools, including academies and local authority maintained schools, and local authorities and billing authorities.

Proposals

  • Proposal 1 – the Education and Skills Funding Agency (ESFA) pays schools’ business rates directly to billing authorities on behalf of the schools, removing the need for local authority maintained schools and academies to make these payments to billing authorities themselves.

    To enable this, it is proposed that billing authorities will upload bill data for all schools to the online ESFA system which is already used to collect academies’ business rates bill data. In addition, billing authorities will supply payment information to the schools to allow for local accounting for their business rates obligations

  • Proposal 2 – the ESFA makes a single reconciliation payment to billing authorities to allow for adjustments before the end of the financial year.

    “It is important to note,” the DfE said, “that the proposed changes do not represent a change in funding levels, but instead represent a more streamlined system which restructures the payment process of existing funding.”

    This approach to top-slicing dedicated schools grant (DSG) and general annual grant (GAG) funding to streamline cash management is already in place for other payments such as the risk protection arrangement (RPA).