Business rates retention crucial to plugging council funding gaps

Business rates have always been seen by companies as quite simply an extra tax.

Hitherto, they have been a tax too far with no sign of any benefit to firms or the local economy.

And the venom against the rates has hardly been enhanced by many companies often facing the prospect of steep rises in what they will pay in the future and long delays in appeals against those demands.

However, perhaps there is now some light at the end of this rather murky tunnel for local firms in Gloucestershire.

The county has been chosen as one of the pilots for councils to retain 100% of the business rates they collect and use that money to help local business and drive the local economy.

This is an important issue for companies so it’s good to see the BBC’s Sunday Politics Show this Sunday with Points West political editor Paul Barltrop looking into the new arrangements for the retention of what could be as much as £9 million for Gloucestershire.

Walking round Gloucester with Paul while filming the  Sunday segment yesterday, we talked about how the city of Gloucester might benefit from this business rates windfall which council leader Paul James estimates could be around £900,000.

To bring life back into the streets of Gloucester, and to the retail business economy particularly, I told Paul that I thought the council need to encourage people to move back into the city.

Just look above a lot of the shops on the historic gate streets of Gloucester and you see great living accommodation most of which is empty.

We need to take a leaf out of the Peel Holdings book of footfall success at Gloucester Quays and stage more events in the centre of the city to attract people.

Marketing Gloucester are doing a great job in the city and recently together with Gloucester Chamber of Commerce, they have developed a very good Business Development District (BID) which businesses support.

Already, the BID money is in evidence on the streets of the city through increased security patrols giving a feel of a safer city.

Yes, I welcome the business rates pilot scheme from a government that has up until now shown very little support for local business.

But, and there is a big BUT.

This Gloucestershire pilot is for 100% retention of business rates for twelve months, and then going down to 75%. What happens after that?

We must be very careful there is not a Whitehall magician’s sleight of hand operating here.

Companies are fed up with paying rates which do them no good at all, and they must not be given the impression that there will be benefits and then see them taken away pretty quickly.

It is also incumbent on local councils like Gloucester to ensure that they talk to business and our local Chambers of Commerce to understand what the companies want to see from what we hope will be a business rates windfall.

The Sunday Politics is on BBC 1 this Sunday starting at 11.00am with the South West segment featuring the business rates story at around 11.30am.