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Town centre fund 'should be used to cut business rates'

Retailers said councils should be able to use the cash to cut their overheads.

Struggling: Retailers fighting to stay alive (file pic).
Struggling: Retailers fighting to stay alive (file pic). ©: John Kilbride

A £50m fund set up to help Scotland's struggling high streets should be used to cut business rates, retailers have said.

The Scottish Retail Consortium (SRC) has said local authorities should be allowed to use the town centre fund, which was announced by finance secretary Derek Mackay in his draft 2019-20 Budget, to reduce the financial burden on businesses.

It made the plea in a submission sent to Mr Mackay and MSPs on Holyrood's finance and economy committees ahead of more detailed scrutiny of the Budget proposals by the Parliament.

In his Budget statement to MSPs, Mr Mackay said the £50m capital fund would "support our town centres to diversify and develop, ensuring our town centres are thriving, sustainable places where people choose to spend their time".

The SRC described this as a "promising move" which should help high streets with their "reinvention into modern and diverse retail destinations".

But it argued "councils should be allowed to use this fund to cut business rates in their area" - as well as calling for the Scottish Government to reduce the large business rates supplement which is charged on "many" town centre businesses.

https://stv.tv/news/scotland/1412169-more-than-five-high-street-shops-close-every-week/ | default

While councils already have the power to cut business rates in their area, the SRC said none of Scotland's 32 local authorities had done so in 2018-19.

Just three councils have previously reduced the charges on businesses since being granted the power to do so more than three years ago, with such action being taken for limited periods only.

Consequently, the SRC demanded ministers "redouble their efforts to get more local authorities to capitalise on this opportunity to support high streets and town centres".

The SRC said it is speaking out because the "economic backdrop for retailers is challenging", adding this means the industry "has a heightened interest in fiscal and regulatory measures which either increase or lower costs".

It indicated it is "open" to the current council tax system either being replaced or reformed - a key demand of the Scottish Greens if they are to support the minority SNP administration's Budget - but also stressed the impact on consumers must be considered.

"Reforms to council tax which increase the tax burden on those on modest or average earnings is likely to negatively impact on consumer spending," the organisation warned.

It said changes to council tax made as recently as two years ago had "added circa £150m to household bills".

A Scottish Government spokeswoman said Mr Mackay had put forward a "budget of stimulus and stability".

She said: "We welcome the Scottish Retail Consortium's recognition of the positive impact of proposed Budget tax measures, in particular to provide certainty to businesses and protect lower and middle-income earners.

"We recognise the challenges faced by retailers in towns and cities, which is why the Budget also includes more than £5bn of capital investment to grow and modernise infrastructure - including a new £50m town centre fund to support the future of our high streets."

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