The winding-down of Heysham's two power stations will have a "significant impact" on Lancaster City Council's finances, a report has revealed.
The report, published ahead of Lancaster City Council's budget meeting on Wednesday, said that the planned decommissioning of Heysham 1 and 2 will cut the council's income from business rates considerably.
It said the rateable value of the power stations counts for more than 45 per cent of the council's total rateable value.
Most non-domestic properties, like shops, offices, pubs, warehouses, factories and guest houses, have to pay business rates.
"The ongoing impact of the pandemic and the restrictions placed on business means that business rates continue to be an area of significant uncertainty," said the report.
"Business rates retention volatility remains a risk to the council in particular the recent announcements in regard to the decommissioning of the Heysham nuclear reactors."
The report also said the council may have to rely on the government's 'safety-net system' if its business rate income falls, as expected, by more than 7.5 per cent.
It also said the council would need to rely on its business rates reserves to "smooth operational shortfalls in the short term".
Heysham 1 is due to move into de-fuelling and decommissioning in 2024, and Heysham 2 in 2028.
A spokesman for Heysham Power Stations said: "Heysham power stations have maintained a regular open dialogue with the city council on the end of generation dates for both Heysham 1 and Heysham 2, and in the past the stations have seen their operating lives extended.
"Heysham 1 has been operating since 1983 and has been contributing to the economy with wages and supporting local businesses since the early 1970s and this will continue when the site moves into defueling and decommissioning. Heysham 1 is planning to generate electricity until March 2024. Heysham 2 was originally due to stop operating in 2023, and now has an estimated end of generation date of 2028."
The estimated Lancaster City Council business rate deficit for 2021/22 is £12.517m. The city council has a 40 per cent share of this, at £5.007m. Most of this will be offset by a government grant.
The report said: "As a result of the pandemic Central Government has again amended and extended the reliefs that could be given to ratepayers. Councils are being compensated for this through payments of Section 31 grant so that this element of the deficit will not impact on local authority budgets."
The 2022/23 Lancaster City Council budget meeting will be held this coming Wednesday (February 23) at Morecambe Town Hall. It starts at 6pm and is open to the public.
INTERVIEW: Award-winning festival set to celebrate Italy in Lancaster
Lancaster MP welcomes return of mobile phone coverage
INTERVIEW: Historic Heysham pub to reopen as new management aims to 'bring community together'
Traffic diverted as Lancaster quay closed for rail bridge works
Caravan fire in Morecambe spreads to two other vehicles
Morecambe's two bathing beaches receive Seaside Awards amid calls to improve water quality
Lancaster remains best university in North West England in Complete University Guide
'Music with the Mayor' initiative launched to support North Lancashire’s Citizens Advice
DIARY: Beyond Radio presenter fighting cancer continues his '60 Before 60' challenge
BIG FIGHT COUNTDOWN: Tyson Fury's father John headbutts Usyk supporter ahead of undisputed heavyweight title fight
Decision to refuse Galgate housing scheme planning permission upheld following public inquiry
INTERVIEWS and PHOTOS: The story of Highest Point festival 2024
INTERVIEW: Lancaster prison officer backed by Tyson Fury wins sport contest ahead of Miss England bid
VIDEO and INTERVIEW: Lancaster schoolboy, 10, makes drum 'n' bass DJ debut at Lancaster festival
Highest Point 'Lancaster Rocks' night cancelled due to thunderstorms warning
Quad bike rider dies after road crash in Morecambe
Morecambe guesthouse couple to star on reality TV show 'Four in a Bed'
PHOTOS: Northern Lights dazzle on Highest Point festival day one
Mother and son unveiled as new Lancaster mayoral team
New police and crime commissioner for Lancashire begins role
