A cut to business rates seems like heaven sent legislation for a struggling Kirkcaldy town centre, but reactions to the new powers given to local council’s to do just that, have been mixed.
The Scottish Government announced on Friday that local authorities will be able to lower rates bills for businesses in their area from October 31.
The order, which uses powers under the Community Empowerment (Scotland) Act 2015 passed in June this year, means councils will be able to reduce rates based on criteria they choose, such as the type of property, its location, occupation or activity.
John Swinney, Cabinet Secretary for Finance, Constitution and Economy, said: “With these new flexibilities councils could, for example, use their local knowledge to attract new investment into town centres and help create vibrant communities where people want to live, socialise and do business.”
Roger Mullin MP and David Torrance MSP welcomed the move claiming the “progressive” step would give local authorities real control. They said: “This power gives local authorities the means to reduce high street business rates, and allows local authorities to tackle problems such as those facing Kirkcaldy.
“This is something that BID groups like Kirkcaldy4All have been calling for.”
Although Kirkcaldy4All manager Bill Harvey appreciates this is a step in the right direction, he is concerned that tight Fife Council budgets will not be able to meet the deficit left by the lower rates. He said: “Whereas we welcome any initiative that sees the lowering of business rates in Kirkcaldy town centre, we are also aware that Fife Council may well struggle to implement this as they have to account for any shortfall to the Scottish Government.
“We are looking for a new policy on business rates that is flexible and equitable through all sectors including out of town retail as well as town centres.”
Fife Council’s leader, David Ross, admits that it is not a straightforward issue: “Here in Fife we’re looking at whether we could use these powers more positively to assist our town centres but it’s nothing like as good as it sounds.
“We’ll wait and see if the Government is preparing any further proposals but the reality is that the rating system is broken. We need a full review of the business rates system and changes that will really help our town centres.”
Rates change is not the solution to town’s troubles
The Community Empowerment (Scotland) Act, passed in the Scottish Parliament in June, aims to give communities more powers to take over land, buildings and services, and is part of their commitment to decentralise decision-making.
Lowering rates, normally set by and paid to the Scottish Government, is one way of attracting business to an area. However, any money saved by businesses on rates, will have to be paid by Fife Council to the government.
“We’ve been told there will be no additional funding from the Scottish Government to make up for the lost income,” said David Ross, leader of Fife Council. “The council will have to bear the cost of any reductions and this will put more strain on our already stretched finances.”
The councillor claims that despite attempts to raise the issue neither the Scottish nor the UK Government responded to earlier pleas by the business community to reform the business rates system which was, and still is, set at pre-recession levels of 2008. The revaluation of these rates has been postponed until 2017.
This has meant that businesses – particularly those in town centres – have been left throughout the worst of the recession with a business rates system that is not fit for purpose.
Cllr Ross said: “What councils across Scotland want is the full power to set business rates appropriately for each area.That would be the best way to let councils revitalise our town centres and provide local businesses with the support they need.”
Cllr Ross is due to meet with Roger Mullin MP, David Torrance MSP and executive spokesman for economy and planning Lesley Laird tomorrow (Friday) to discuss how Fife Council can utilise the new order positively.