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Council demands change

Retail leader resists handing more rates powers to councils

David Lonsdale

David Lonsdale: retrograde step (pic: Terry Murden)

A retail leader has hit back at calls from a Scottish council for business rates to be devolved from the government.

Aberdeen City Council wants powers over rates to help raise revenue, alongside a tourist tax and congestion charges.

It comes as a new report shows footfall in the city’s shops has slumped over three years from 2.3 million to 1.9m.

Council co-leaders Jenny Laing and Douglas Lumsden used the report to call for the ability to set their own economic powers for raising funds. Miss Laing said: “The recommendation from the economic panel was greater flexibility to adjust policy to meet unique economic trends.” She said business rates, which are administered by councils but set by the Government, should also be devolved.

But David Lonsdale, director of the Scottish Retail Consortium, said handing control over business rates to local authorities would be a hugely retrograde step.

He said the SRC is “resolutely opposed” to control over the business rate being devolved to local councils. The SRC reiterated its position in its submission earlier this year on the Non-Domestic Rates Bill, and in its submission on the Scottish Budget.

“Retailers stump up over a fifth of all rates paid, and with shops under enormous pressure action is certainly needed to reduce business rates bills which are now at a 20-year high,” said Mr Lonsdale.

SRC is resolutely opposed to repatriating control over the poundage rate to councils

– David Lonsdale, SRC

“However, handing control over business rates to local authorities would be a hugely retrograde step. Councils are already able to reduce business rates in their area, but only three of the 32 have ever bothered to do so.

“SRC is resolutely opposed to repatriating control over the poundage rate to councils as it could lead to firms being treated like vote-less cash cows, pushing business rates up even higher and further hitting competitiveness.”

In September Scottish Green Party MSPs undertook a consultation exercise on devolving the poundage rate to councils, and looks set to move an Amendment on this at Stage 2 of the NDR Bill later this month.

Mr Lonsdale said that even if this fails to be endorsed there is a possibility that the Greens will make a demand on it during Budget negotiations with Scottish Ministers early in the new year.

A spokesman for the Scottish Government said: “Discussions around the further fiscal empowerment of local authorities are ongoing as part of our Local Governance Review.

‘It is for councils, who have wide-ranging powers to reduce the rates paid by any ratepayer in their area, to determine how they prioritise their resources.”



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