Policy goes to court
Firms seek judicial review into Forbes’ grant scheme
Kate Forbes was forced to change tack (pic: Terry Murden)
A group of small businesses have today lodged a petition at the Court of Session seeking a judicial review on the fairness of the Scottish Government’s Business Grant Scheme.
The action has been filed amid increasing concerns that failure to match Westminster’s economic support will force a string of the country’s smaller firms out of existence.
The petition was submitted digitally, with a motion seeking a first order for service and a shortened period for answers so that an early Permission Hearing can be fixed.
The group of businesses spanning various sectors across retail, hospitality and leisure, are arguing the fairness of the Scottish Government’s decision to deny them grant support equal to that being offered south of the border
The Scottish Government initially offered a 100% grant on business rates per business, while firms in England and Wales were able to claim the full amount for each property.
Scottish businesses and opposition politicians claimed that this put firms north of the border at a competitive disadvantage and that it reneged on a pledge to match the Westminster scheme.
Finance Secretary Kate Forbes relented, but only by giving a 100% grant on the first property. Firms were only eligible for a 75% grant on all subsequent properties.
Businesses say this amounts to a £600 million for some of Scotland’s major employers.
Additionally, the smallest properties in Scotland with a rateable value below £18,000 are subject to an additional clause requiring them to qualify them for the Small Business Bonus Scheme (SBBS) meaning many get zero grant rather than £10,000 or £25,000 for the same property in England.
The business owners are also calling into question the rateable value threshold for Scotland, limiting the number of companies eligible for the grant. The group put forward the case that the Scottish system reviews the rateable value differently to the rest of the UK, resulting in businesses of a similar size and scale to English counterparts miss out on funding.
Jon Sharp, owner of Kilimanjaro Coffee, one of the businesses bringing forward the court action, said: “I am delighted to see this action moving forward as it is a crucial moment for many Scottish businesses who are looking for the same support as their English counterparts to merely stay afloat during this pandemic.
“We want the courts to consider the fairness of the Scottish Government’s decision to curb the grants available to Scottish businesses who have been forced to close their doors.
“Scotland’s hospitality businesses are now looking at potential restrictions on how they trade running until the end of the year – it is illogical that a Scottish Government that prides itself on delivering for Scotland would withhold essential funding from a sector in such desperate times.
“Four Scottish Government ministers made statements to the Scottish Parliament indicating that the English grant scheme would be replicated in Scotland – the Scottish Government backtracked on this commitment with no explanation or acknowledgement.”
There are fundamental flaws in Scottish Government Finance Minister Kate Forbes’ plans– Jon Sharp, coffee chain owner
Mr Sharp added: “We are looking for the funding to be in line with the rest of the UK as without this it really could spell the end for many businesses across the country and lead to widespread unemployment.
“We also would like to see the Scottish Government take into account the way rateable value is measured in Scotland and increase the threshold quite considerably in order to aid the businesses that need it most and are amongst the country’s top employers.”
He said there are “fundamental flaws in Scottish Government Finance Minister Kate Forbes’ plans”.
He added: “Although devolved, we continue to be UK citizens and are appealing for parity with our English counterparts. If not, more businesses will go under in Scotland than in England as a result.”
Ms Forbes made the decision to also distribute the £2.2bn pot from Chancellor Rishi Sunak to businesses in industries other than hospitality, tourism and retail, arguing that the Scottish economy was different in make-up and that the Scottish scheme was therefore more equitable.
The group of businesses now await acceptance to proceed from a judge and a date for the for early permission hearing to be fixed.