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Levy expenditure maintained but warning attached

Levy Board chief executive Alan Delmonte
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The Levy Board is to maintain levels of expenditure in areas such as prize-money for the first quarter of 2017, but has warned "significant" cuts might be necessary should the government's plans for replacing the levy system meet problems.

Decisions on spending in what had been due to be the final three months of the Levy Board's existence have been repeatedly delayed as the board waited for confirmation from government of its plans.

The government has still not made an official comment on the rate for the levy replacement system which will capture a share of money bet on British racing with offshore operators and is due to come into effect on April 1, nor on the details of how the funds generated will be collected and distributed.

However, it has emerged the government is "minded" to set a rate of ten per cent for the new system and that the Levy Board should get a stay of execution until the end of 2017.

Before plans for levy replacement were announced there had been warnings that Levy Board spending would have to be cut by up to £25 million next year to balance the books due to falling yields.

In order to maintain spending, the board's reserves, which were £41m at the end of the levy year in 2015, have been eaten into and will be approaching their minimum floor of £18m by the end of March.

Income is due to rise from April 1 providing the timetable for the new system does not slip, and there are no other problems such as a legal challenge or drastic reduction in the proposed rate.

Levy Board chief executive Alan Delmonte said: "The board took the view that, as government remained committed to April 1, which could lead to an increase in forecast income, expenditure should be maintained for the first quarter of 2017. This perpetuates the deficit budget and will take the board very close to its minimum reserves floor.

"If income from April 1 does not match current expenditure levels, expenditure will have to be reduced. If no income was received or if the board could not expend it, this would potentially lead to a very significant cut in expenditure.

"The board agreed the likely post-April situation should be clearer by February, when decisions could be taken about expenditure from April 1."

With the Levy Board still set to go out of existence in 12 months, finance director Rob Skeggs is the latest staff member set to leave, departing at the end of March.

If no income was received or if the board could not expend it, this would potentially lead to a very significant cut in expenditure
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