New Scots rates powers must be used wisely to rebuild town centres

16 Oct 2015

Policy area: Business rates

Scotland’s landlord community has cautiously welcomed the announcement of further flexibilities for Scottish councils in setting business rates.  

The Scottish Property Federation has commented that the proposals could be used to incentivise new business in Scotland, but that the announcement does not tackle problems that afflict the current business rates system. 

The new powers, announced today by Deputy First Minster John Swinney at the SNP Annual Conference, will allow councils to reduce rates for specific businesses in order to encourage investment in their local areas.

David Melhuish, Director of the Scottish Property Federation, commented: “Used wisely, these new powers could, in theory, enable councils to reduce their rates in order to provide an incentive for new businesses and new investment. This could be a powerful tool for councils seeking to rejuvenate their town centres.

“It will be crucial for local authorities to work with landlords and investors in partnership if we are to make the most of these new flexibilities.  If we can encourage more businesses to grow then in time we can grow the tax base and reduce the rates burden for all, including the public sector ratepayers.

“What this announcement does not take into account is the fact that the business rates system as it stands is ripe for reform. Rates rising year on year with little reference to economic conditions or changes in the markets must  be tackled if we are to avoid the current situation of many ratepayers paying annual rates based on commercial property valuations set at the top of the market in early 2008.”