Tram disruption sees up to 20% business rates cut as rail link unveiled

Published on Friday 16 October 2009 10:03

HUNDREDS of businesses in the Capital have been given up to 20 per cent off their business rates to compensate for the impact of trams, costing the public purse hundreds of thousands of pounds.

The organisation that sets the business rates that firms have to pay has given discounts to 350 firms along the tram route to acknowledge the impact that work has had on business.

Based on an average sized unit, it is estimated that the rates reductions will already have amounted to more than 500,000 less being collected and that figure will soar as the tram work drags on.

&#149 Is a 20% cut in business rates enough to offset the trams disruption?

The majority of the discounts awarded so far have been to firms based on Leith Walk, Shandwick Place and Haymarket.

But another 733 firms have lodged appeals because of the impact they say that tram work is having on them.

It is understood that one appeal hearing is due to take place later this month that could see all Princes Street businesses given a discount on their rates. Previously, the city's biggest retailers have not been eligible for any discount, despite footfall declining by up to a third on some parts of Princes Street.

The 350 rates reductions awarded so far were agreed by the Lothian Valuation Joint Board, a public body established to set the business rates in each of the four Lothians councils.

Joan Hewton, the board's assessor, said: "There was an allowance given because we felt there was an impact on properties along the route.

"We looked at the value and considered if it had been affected. Tram work had a temporary impact on the value of property, in terms of its rental value."

She said that, of the 733 appeals, many were set to be heard within the next few months.

Ron Hewitt, chief executive of the Edinburgh Chamber of Commerce, said that the chamber had worked hard on behalf of its members to ensure that tram work would be taken into account when setting business rates.

"We are the only city in the UK that is getting a benefit like this so it has got to be welcomed," he said, "Obviously we would like every business to benefit but it has got to be those on the route.

"It is a contribution that will help but it won't cover the full impact in some areas."

Most of the discounts have been agreed for the period that tram work was due to take place outside a firm's doors.

But Mr Hewitt said many would expect that reduction to be extended further if work overruns in some parts of the city.

"I would hope that the same view will be taken if there are delays for those affected," he said. "Those based where work is ongoing, such as the interchange at Haymarket, will be affected for longer and should be compensated for longer."

Transport convener Cllr Gordon Mackenzie said: "Both the council and TIE have worked closely with other agencies to support businesses along the length of the tram route and very much welcome Lothian Valuation Joint Board's decision to offer business rate relief."

Business rates are re-evaluated every five years by assessors and weren't due to be set again in Edinburgh until April 2010.

However, businesses can appeal if they believe there has been a material change in their circumstances.

Business rates are collected by the city council then paid towards a central pot for Scotland, which is then redistributed by the Scottish Government.

It means that the reduction in the value of business rates collected in Edinburgh will not affect the city directly.

A Scottish Government spokesman said: "Local authorities are guaranteed a fixed level of funding by the Scottish Government. Any business rate appeals of this nature will not impact on the overall funding available to City of Edinburgh Council."

WHAT'S NEXT IN LINE AT GOGAR..

Chris Marshall

RAIL bosses have submitted plans for a multi-million pound interchange at Gogar to link the railway with the city's trams.

Work on the new station, which will sit on the Edinburgh to Fife line, is set to begin early next year at a cost of 34 million to 37m.

Network Rail has lodged the plans with the council after a number of design changes were made following public exhibitions.

The interchange is part ofTransport Scotland's 1 billion investment in the railways between Edinburgh and Glasgow.

It will allow train passengers to connect to the tram for services to Edinburgh Airport, providing a substitute for the scrapped 650m Edinburgh Airport Rail Link.

Ron McAulay, Network Rail director for Scotland, said: "The proposed interchange will provide a crucial transport link for Edinburgh Airport and the west Edinburgh and central Scotland area.

"Our consultation process provided some important issues and we have incorporated a great deal of those comments into our final proposals. We believe that the end result is striking yet practical."

Plans for the interchange have been modified to increase space and provide better links to existing services, as well as to provide more car parking and secure cycle parking. There will also be larger lifts at the two-tier station to help accommodate prams and cycles.

Earlier this month, work began at the new tram depot at Gogar. Tram firm TIE has confirmed that the depot is nine months behind schedule, with work originally due to be complete by mid-2010.

Should planning permission be granted, work will start on the interchange next year and is due to be complete by September 2011.

Mandy Haeburn-Little, director of customer service and communications for TIE, said:

"We're proud that the construction of the tram project has facilitated such an exciting development."