SRC urges more local councils to act on business rates relief

David Lonsdale

The Scottish Retail Consortium has called on more local authorities to act to reduce business rates in their areas, after it was revealed just two out of Scotland’s 32 councils currently use existing powers to cut business rates bills.

In response to a written parliamentary question from a Labour MSP, the Scottish Government has confirmed that only two local authorities – Aberdeen and Aberdeenshire – are currently using powers to reduce business rates which were first introduced exactly two years ago. The ability to cut business rates through the ‘local discretionary rates relief’ was first introduced on October 31, 2015, under the 2015 Community Empowerment Act.

Despite the fanfare at the time two years ago when the relief came into effect, the response from Finance Secretary Derek Mackay to a written parliamentary question shows just two of the 32 councils in Scotland is bothering to use this power to cut business rates in the current financial year:

“Perth and Kinross Council made use of the local relief powers available under the Community Empowerment (Scotland) Act 2015 in 2016-17 and Aberdeen City & Aberdeenshire Council have done so in 2017-18. The Scottish Government continues to encourage all local authorities to utilise their powers to award local rates relief to address any local issues they identify.”

When the then Community Empowerment Bill was being scrutinised by Holyrood three years ago the SRC’s submission supported the principle of the relief but voiced doubt over how extensively the rates discount would be deployed, as it was not accompanied by any cash from government to local councils. The SRC also alighted on the issue in its recent Scottish Budget submission to Ministers.

Separately, recent official figures showed the number of shops in Scotland has fallen by 1,831 over the past eight years, down 7.5%. The shop vacancy rate is 9.3% in Scotland’s town centres.

David Lonsdale (pictured), Director of the Scottish Retail Consortium, said: “Two years have passed since councils first got the power to reduce business rates in their areas, but barely any local authorities have bothered to act on it. This is hugely disappointing at a time when one out of every ten shops in Scotland’s town centres is lying empty and action is needed to cut the cost of doing business and revive our high streets. This Scottish Government initiated policy is at serious risk of being viewed as a flop due to lack of take up by councils. Scottish Ministers should redouble their efforts to get more local authorities to capitalise on this opportunity to support high streets and town centres.

“Whilst Aberdeen City and Aberdeenshire are to be commended for taking action, more widespread adoption by Scottish councils of this local rates relief is – for the moment at least – like the hole in a Polo Mint, missing.”