Business rates ‘undermining’ Portas Pilot
THE Government’s decision to postpone a revaluation of business rates is negating the benefit of extra funding awarded under the Portas Pilot scheme, designed to revive the fortunes of 27 towns and cities.
That’s according to research carried out by property agent Colliers International and the the British Council of Shopping Centres (BCSC).
A revaluation was due in 2015, linking rates to rents in 2013, but the postponement means companies will have to pay business rates based on rents in 2008 – at the height of the market – until 2017.
The North West’s Portas towns are Stockport, Morecambe, Nelson and the Lodge Lane area of Liverpool. In Stockport, high street rental values have declined by 29% from £190/sq ft to £135/sq ft since 2008, meaning businesses in Stockport are likely to be paying well over the odds in terms of business rates.
As part of the Portas Pilot scheme the town, which has a vacancy rate of 28% – one of the worst in the country – received £100,000 from the Government to support new retail businesses.
However, Colliers’ research found that of the 15 pilots where data is available, 13 will be worse off as a result of delaying the rates revaluation. The significant fall in rental values in many Portas Pilot towns would have meant dramatically reduced rates at the 2015 revaluation.
Adam Burke, director of rating at Colliers’ Manchester office, said: “It really does beggar belief. On the hand one the Government is trying to help and support the high street with extra funding and support through the Portas Pilot and then on the other is heaping more pressure on retailers by postponing the rating revaluation until 2017. It flies in the face of all common sense.
“Many retailers were holding out for the 2015 revaluation as their business rates would have probably reduced. Instead they now face five more years of paying higher than market value rates, which is neither helpful nor fair on those businesses that are already struggling.”
Edward Cooke, director of policy and public affairs at BCSC, said: “The Government has really failed to engage on the issue of postponing the revaluation of property with regard to business rates. The Chancellor’s refusal to address the impact of business rates rises in the Budget may have signalled the end for many retailers. The impact of government initiatives such as the Portas Pilot is going to be undermined unless there are substantial changes to the business rates regime.”
