Duncan Harkness, senior director, Business Rates team, Bilfinger GVA:
Business Rates Review and impact on retail sector
If there is a shift in the current system, instead of receiving 50% of business rates revenue and distributing to councils for service delivery, the Conservative Party has suggested councils will retain 100% of revenue raised and be responsible for increases in rates charges at a local level.
The Treasury has neatly passed responsibility to the councils for spending increases, but is likely to only allow modest opportunities for councils to increase business rates income in line with increased demands for local services.
It is difficult to imagine many large Authorities with pressing social issues being in a position to reduce business rates to win “new jobs and generate wealth” as George Osborne is suggesting.
Northern devolution and the agreement to an elected mayor, may allow for a supplement to be charged in the region for infrastructure improvements.
This all sounds potentially positive, but against the Local Authorities’ need to preserve or increase spending.
The noise from ratepayers for a reduced business rates burden is getting ever louder, with the CBI and the BRC recently meeting with the Treasury to discuss the Government’s on-going review of rates, and press the case for the business rates burden to be shared more equally throughout the economy with other businesses.
Retailers believe the current system is outdated, and unduly damages Britain’s retailers and high streets.
Clearly the Chancellor is under pressure to reform the system, but the only certainty with these is that at best they will be Fiscally neutral.
Development – comments from Duncan Harkness continued..
Bilfinger GVA would like to see the Chancellor take a much fairer position to encourage best development. Put lightly, it is unfair that developers have to pay rates for vacant space when buildings will simply never be re-occupied.
Buying a site, obtaining planning permission and ensuring contractors are in place takes time. To ensure best development in the UK is stimulated (and unfair rates don’t have to be paid) Bilfinger GVA would like the Chancellor on Wednesday to provide billing authorities with extra funding for lost empty rates where there is clear evidence that a developer after buying a site is doing what they can to ensure the development starts in a timely fashion. We would suggest developers have to fulfil the following criteria:-
1) No occupation
2) Planning permission is being actively sought (or has been obtained)
3) Clear project plans are being put in place and contractors being tendered/employed.
If a council considers a developer is unnecessarily stalling then the developer should be warned and if no progress is made the council can seek back dated rates.
We consider this will act as a positive stimulus for developers to work with councils to ensure best developments are delivered quickly.
Nicola Rigby, director, Planning Development & Regeneration team, Bilfinger GVA:
A dedicated budget for Northern Powerhouse?
Nicola Rigby, Director, Planning Development & Regeneration at Bilfinger GVA, comments: “I think the question on everyone’s lips in the context of Northern Powerhouse is whether the Chancellor is going to announce a dedicated budget for infrastructure in the north as part of the Lord Adonis Infrastructure Committee. I expect something will be resourced to give the committee teeth, but what specific commitment will be given to infrastructure in the north? The Government needs to be more assertive in terms presenting tangible funding to allow the Northern Powerhouse to achieve its potential. This may not be, and perhaps should not be, in the form of cradle to grave funding but should at least cover off funds to progress plans and get infrastructure investment opportunities ‘investor ready’.
“Transport for the North has a shopping list but not necessarily the means to progress any of the plans, even though more detailed concept.
“We welcome the devolution deals such as the one announced in Liverpool last week. We look forward to further announcements to benefit Manchester, Sheffield, Leeds and Newcastle.”
Sarah Johnson, Director, Telecoms team at Bilfinger GVA:
Transformative broadband-speed and tax relief to allow greater digital network in rural areas
“Internet speeds at 30 mega bites in UK cities are some of the slowest in Europe, and for an economy that purports to be the world’s fifth largest, unless we are running closer to 100 mb, this will continue to present problems for the UK. The real challenge however is how to address broadband speed in rural areas where there remain multiple “not spots” throughout the country. Giving businesses of all sizes the ability to work remotely in an effective and agile way should remain one of the Government’s absolute priorities, if it claims to support entrepreneurialism and business start-up.
“Establishing new masts in areas with no broadband connection is expensive. For every pound the operators pay in rent the Government adds circa 65p in business rates. Obviously this doesn’t present a sustainable solution, so we would urge Government to consider introducing a tax relief scheme – one that follows a subsidy system similar to that of Enterprise Zones.”
Mark Rawstron, Regional Senior Director at Bilfinger GVA:
“Much has been made of the Chancellors ability to attract overseas inward investment particularly from China these past weeks. However the Government cannot rely on Chinese investment in UK infrastructure alone. This country faces a skills and funding crisis that could see a number of significant infrastructure programmes prematurely grind to a halt. We would therefore urge the Government to look more closely at incentivising housebuilders and developers, through a tax-relief scheme, to provide apprenticeship programmes to employ and train skilled workers, so that these schemes that the Government is financing can be delivered on time, on budget and to the standards expected by its investors.”
Stephen Cowperthwaite, senior regional director and head of the Liverpool office of Bilfinger GVA said:
“The proposed commitment to spending on Northern Powerhouse infrastructure projects will boost major cities and towns and correspondingly retail spend in those locations. However it is important to be measured with this as the increase in investment in prime locations could lead to even greater pressure on second tier towns that do not have the breadth of offer to compete.”
