The long-awaited Barclay Report offers “marginal tweaks to a broken system,” according to experts in Fife.
The report, which was commissioned to examine and overhaul business rates across Scotland, was published today and made 30 recommendations for change.
They included reviewing business rates every three years, rather than five, from 2022 and a more transparent system of assessment.
To bring new business to high streets with high vacancy rates – such as Kirkcaldy – the report also recommended greater support through the use of a ‘Fresh Start’ scheme.
But the reaction in Fife – where the burden of business rates as a percentage of profits is the highest in Scotland – was lukewarm.
Billy Mclean, president/treasurer of Fife’s Licensed trade Association, said: “I am disappointed that our sector seems to have been overlooked.
“It seems to be that businesses are being valued on turnover, whereas a fairer basis would be if all businesses are valued on the same basis, which is on profit.”
Mr Mclean added: “The Small Business Scheme is to evaluated which I think may hurt some small pubs and clubs, because at the moment the scheme is vital to their existence.
“Another recommendation is to publish a list of those not paying, I think a list of those who actually do would be a a better idea.
“There are parts of Fife, some small villages, that are a ‘rates desert’, such as Pittenweem for example. Hardly anyone there pays rates.”
Richard Marsh, director of 4-consulting, said te report suggested “some welcome and long overdue changes, but it too easily dismisses fundamental change and instead opts for marginal tweaks to a broken system.”
Moreover, Fife had suffered brutal losses from heavy industry but a report last week by the Scottish parliament ironically revealed the system was punishing communities most in need of support.
“The burden is unevenly spread with pubs, restaurants and hotels hit hardest by business rates,” he said.
“We’ll see more regular reviews of the value of business properties, but this won’t start until 2022 and will be of little comfort to businesses continuing to struggle over the next five years.
“More regular reviews should help the system become less backward looking; The Barclay Review recognises that the community empowerment bill didn’t go far enough and has suggested new laws should be put in place to allow councils to set additional levies that could be used to develop local schemes to support town centres and other developments. This is very welcome and Fife must push to the front of the queue.”
Mr Marsh also welcomed calls for more transparency, given the existence of such large discrepancies across regions and business sectors, but called for greater fairness.
“The availability and interactivity of data from the Scottish Assessors website resembles something from Ceefax in the 1980s and limits people’s ability to scrutinise the information,” he said.
“The Review recommends that rates are lowered for larger businesses with the effect of making larger businesses better off by around £60 million a year. The evidence underpinning this recommendation is painfully thin. The review notes that cutting taxes for larger businesses could boost economic growth, this is at odds with government policy in other areas.
“Moreover, the system of business rates relies on an assessment of business properties across Scotland. Even within Fife the market for a new restaurant will be very different in Kirkcaldy compared to St Andrews. It’s not clear that these differences are fully taken into account and are likely to distort markets and much needed investment.”
Welcoming the publication of the Barclay Review of Non-Domestic Rates, Finance Secretary Derek Mackay said: “This report offers recommendations for reform of the system to make it work better for ratepayers across Scotland while ensuring that the contribution they make to important local services is maintained.
“Ken and his team were tasked with finding ways to improve the current system, updating it so that it better supports business growth, encourages long term investment and enables businesses to better navigate fast-changing marketplaces.
“I know the review group have worked incredibly hard, spending more than a year engaging closely with the ratepayers across Scotland before compiling this report. I would like to take this opportunity to thank them for their substantial efforts.
“Having now received the Barclay Review, the Scottish Government will respond swiftly to its recommendations.”