Scottish councils fail to use powers to tackle business rates burden

A lacklustre take-up by Scottish councils of new powers to ease the business rates burden has been criticised by leading lobby groups as a missed opportunity and lack of imagination.

Perth and Kinross is the only Scottish council which has committed to using the new 'local discretionary business rates relief' that was implemented in Scotland last October.

It comes as the Scottish Retail Consortium (SRC) revealed that only one council – Perth and Kinross – has committed to using the new “local discretionary business rates relief” that was implemented in Scotland last October.

The legislation it emerged from was Holyrood’s 2015 Community Empowerment Act, with Scotland’s Deputy First Minister, John Swinney, mentioning the initiative in his party conference speech in October.

Perth and Kinross Council’s strategic policy and resources committee gave the green light on 15 June to extending discretionary rates relief that could benefit more than 300 local businesses. It represents a potential investment by the authority of £600,000 in the region’s businesses.

The Scottish Retail Consortium, which has consistently called for a shake-up of Scotland’s business rates systems, said Perth’s move was “encouraging”.

But the SRC added: “However, we understand they are the only council to have acted and we are unaware of any other local Scottish councils having any plans to capitalise on this new power to lower business rates in their areas.”

The retail trade body welcomed the new legislation when it was being scrutinised by Holyrood two years ago, but voiced doubts at the time “over how extensively the rates discount would be deployed as it is not accompanied by any cash from government to local councils”.

David Lonsdale, director of the SRC, told Scotland on Sunday that the group still welcomed the “acknowledgement of the need to keep down costs for business”, but said the poor adoption of the new powers meant it “remained unconvinced that its use will be either widespread or substantive enough to be effective”.

Lonsdale added: “While Perth is to be commended for taking action, more widespread adoption by councils of the new relief is – for the moment at least – like the hole in a Polo mint, missing.”

The Scottish Chambers of Commerce (SCC) said the poor response by councils was “not entirely surprising”, given it “is likely to be seen as a cost to council budgets”.

Garry Clark, of the SCC’s economic development intelligence unit, said it highlighted the “piecemeal approach” of Holyrood to business rates in Scotland “whose burden has increased by 35 per cent in six years”. However, he added: “Nevertheless, the power could provide targeted relief for many businesses and we urge local authorities to be more imaginative in how it could be applied.”