With plans for a government high street review set to be announced, councils could do more and cut business rates writes Robert Hayton.
Eric Pickles, the then Communities Secretary, said this would provide councils with a powerful mechanism to encourage entrepreneurship and incentivise growth.
Yet, despite the ongoing crisis engulfing our high streets, this year for 2018/19, councils in England are planning just £21 million in additional help the exact same amount as the year before notwithstanding the fact that revenue from business rates will rise by 3.5% overall up £847 million to £24.8 billion.
The government tried to soften the blow of last year’s revaluation with a 4 year £300 million discretionary relief fund for councils to help those firms hardest hit making £180 million available last year but the that reduced to £85 million from April for this year.
The retail sector is a critical component of, and a major contributor, to the strength of local economies. With the government set to launch a high streets review this week, given the stream of collapses across both the retail and hospitality sectors since the turn of the year, with many others teetering on the brink, councils could take decisive action now.
Whilst business rates are rarely the sole driver for insolvencies, they certainly are a contributory factor being one of the least negotiable taxes and the hardest to defer with the compound effect of annual inflationary rises hitting hard.
In certain areas, with unique challenges, or where there is a loss of an anchor store, it may require councils taking a cut in business rates from businesses that they believe will help become or continue to be destinations and deliver footfall. Whilst that might mean a reduction in their rates pot today, longer term, it will deliver far greater economical and social benefits.