Business rate change could lead to leisure facilities closing

Public sporting facilities would be forced to close as a result of proposals to overhaul business rates, the trusts running Scotland's sport, leisure and cultural facilities have warned.

Gyms could be forced to close (File Photo)

Sporta Scotland, the umbrella body representing organisations that run leisure centres, swimming pools and other facilities on behalf of councils, said thousands of people would be deprived of the opportunity to improve their health and well-being by taking exercise.

This week a review of business rates conducted for the Scottish Government by Ken Barclay recommended that these arms-length external organisations should no longer be eligible for charitable trust business rates relief.

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According to Sporta Scotland, the change would add millions on to business rates bills in some local authority areas – most notably Glasgow where many leisure facilities are run in this manner.

Scotland has 26 sport, leisure and cultural trust members operating in 32 local authority areas. They manage a combined budget of more than £400 million and employ more than 18,000 staff.

Ministers are considering the findings of the review, which has also come under fire from private schools that would also face a large increase in their business rates bill forcing up fees.

Sporta Scotland chairman Robin Strang said he was “concerned” that if the recommendation was implemented “many thousands of people in our communities will lose their only connection to physical activity and social inclusion”.

Mr Strang said: ‘Sport, leisure and culture services and facilities have been under enormous pressure over the past 20 years due to rising fuel, energy and staff costs, ageing 
buildings and growing demand, while budgets have been falling. Councils have acted to save many of these services and facilities by creating charitable trusts, not only to save money in rates relief, but also to introduce a more streamlined, efficient approach to running mostly non-profitable facilities, from leisure centres to schools, libraries to parks, but also a widening range of youth and adult learning and care services.

“The trusts have not only kept these facilities open and services running but have grown many of them in partnership with their communities. By finding every possible route to becoming more efficient trusts have also reduced the levels of council funding over ten years. But to achieve that they have become very tight ships, in many areas reducing opening hours and becoming more commercially aware, and ten years of cutting have left little room for more savings, other than closure.

“If the rules change and councils become liable for six and seven-figure tax bills, the only option left to councils and trusts may be to close many libraries, museums, leisure centres, pools, parks and town and community halls.”

The Barclay review was published at a time when Scottish businesses, particularly those in the hospitality sector, have expressed outrage over a huge hike in business rates earlier this year.

Mr Barclay’s proposals, which are “revenue-neutral”, would see new-build property and expanding businesses benefit from a year-long tax break from raising business rates – a measure that would cost £45m a year. Among the 30 recommendations was a proposal for three yearly revaluations from 2022 based on market conditions.

Further recommendations include halving the large business supplement, which is paid by firms with properties with a rateable value of more than £51,000, from 2.6 per cent to 1.3 per cent, to bring it into line with England.

More cash for town centres was accompanied by a new relief for day nurseries to support childcare provision which would cost £7m a year.

Mr Barclay also suggested a drive to close tax avoidance loopholes on second and empty properties – a measure calculated to bring in around £21m a year.

Mr Strang was concerned over the impact on communities. He added: “The health of the Scottish population is a major concern and trusts are playing an increasing role in partnership with our local authorities, the Scottish Government, NHS Scotland and a wide variety of bodies to turn around worrying trends,” he said. “With an ageing population forecast to treble in the coming decades that remains a major challenge.

“Trusts have taken on that challenge with investment shifted from the active to the millions of people who struggle to access physical activity.”

A Scottish Government spokesman said ministers were considering the Barclay recommendations and would respond shortly.