Response to The Portas Independent Review IntoThe Future Of Our High Streets:

SMEs and operators in the flexible space sector require the same rates relief as retail start ups – BCA adviser

Following retail consultant Mary Portas’ recommendations that start-up retailers be given priority in receiving rates discounts, Jerry Schurder, Head of Rating at property consultant Gerald Eve, is calling for the Government to provide similar support for the flexible space sector.

Schurder, who advises many Business Centre Association (BCA) members, said:

‘Many occupiers of flexible premises are start-ups that would benefit from priority treatment in rates relief. However, no additional funding has been made available to help local authorities and councils meet the costs of rate discounts. Government needs to take early action in the forthcoming budget.’

Schurder called on the Government to reinstate the Empty Property Rate (EPR) threshold at £18,000 RV, and to provide funding to alleviate rates for new businesses and new or refurbished premises. He added:

‘As Mary Portas said “We need to proactively develop new players and our future entrepreneurs. These are the brands and wealth creators of the future. Government should consider how business rates can better support small businesses and independent retailers.”’

Business centres and flexible space operators support more than 40,000 start ups and SMEs across the UK, but growth in the sector has ground to a virtual standstill since Government slashed the Empty Property Rate threshold from £18,000 RV to £2,600 RV in April 2011. Currently nearly all flexible space developments outside the London have been put on hold. If the Government does not take urgent action to raise the EPR threshold, the BCA predicts that there will be a critical shortage of flexible space within the next two years.

In a debate on Empty Property Rates held in Parliament last week, Julian Sturdy MP called for a ‘fundamental Government review’ of the ‘unfair’ EPR system, describing the tax as ‘an enemy of enterprise’ and ‘a blunt instrument...a barrier to investment and regeneration which particularly affects the North.’

The Government has indicated that businesses will be able to appeal directly to their local authorities for EPR relief when the Local Government Finance Bill becomes law in April 2013. However, the BCA believes that this will lead to significant regional variations in rates that will create further uncertainty for investors.

BCA executive director Jennifer Brooke said:

“EPR is a regressive tax that is causing particular harm to flexible space operators and SMEs in the UK’s most vulnerable economic regions. The Government should be providing consistent rate relief to start ups in all sectors.

“The Local Government Finance Bill will not lead to consistent or adequate EPR rate relief for our members. Rather than creating a fair and transparent rates system, it will lead to anomalies across the UK. This will further undermine the confidence required to stimulate long term investment and will be an additional block to economic growth and job creation.

“Immediate Government action is required to reform EPR consistently across England and Wales. Time is of the essence: our sector cannot afford to wait another year.”

The BCA Campaign

The BCA has launched a petition to have EPR further debated in Parliament http://epetitions.direct.gov.uk/petitions/318 It will also be holding a reception at the House of Commons on Wednesday 8th February 2012 to highlight Empty Property Rate issues.