Wandsworth Enterprise Week has now been and gone and, I think, can be called a success. Over the course of the week hundreds of businesses, and potential business owners, attended the various themed events that had been put on by the council’s fabulous economic development team.
While I often joke that my rôle is merely to take the credit for the hard work of others, I think I can take some credit for starting the process a year ago when stood at the back of the 2013 Wandsworth Business Forum and deciding that the format of a stand-alone forum had become a little stale (although feedback for the event had always been positive). But a conversation on the fringes of an event is nothing compared to the inspiration and hard work of the economic development staff and town centre managers who put last week’s programme together. I’ve made a point of telling anyone (and there have been many) who complimented the events that the credit does not belong to me.
What is particularly pleasing are the comments from those businesses operating in several boroughs that Wandsworth has ‘got it’ and really is a business borough. We cannot do everything, and I know we don’t always get it right for businesses. Inevitably a council has to have a focus on residents, that is our statutory responsibility. But that doesn’t mean we can’t help businesses.
We are about to start offering business rate relief for small businesses that are either retailers, service providers or sell food or drink. The council estimates about 3,000 businesses will be eligible for the relief over the next two years and they will be invited to apply later this year.
It was also a pleasure to formally launch, in conjunction with GLE, the Business Loan Fund. And not just because it gave me a chance to hand over a novelty sized cheque. The fund, which will be £800,000 in total, will offer finance to those businesses that struggle to approvals for loans from traditional sources. More details are available from GLE Business Loans or by emailing email@example.com.
One of my colleagues, Piers McCausland, has written a little piece over on ConservativeHome about the lack of local control of business rates. Assuming many readers of this blog do not read ConservativeHome’s local government pages I have copied the article below.
It raises an interesting point. Part of what makes a successful community are the businesses that settle there, and, therefore, surely the local government should have more control over what they are taxed. Of course, it was a previous Conservative government that centralised control of business rates, partly because they were being abused by some short-sighted councils who saw business rates as an easy and relatively painless source of extra revenue, resulting in excessive rate rises for the area’s businesses.
However, we’re now seeing those very businesses we want to encourage being hammered by central government’s failure to appreciate the impact of the end of transitional relief. The council is doing all it can to help businesses in the recession, but in some cases businesses faced bills that had quadrupled in size before the government belatedly stepped in. Piers raises the case of a launderette on St John’s Hill that faces closure because it just cannot afford the rates bill. I am sure it’s not the only business in a similar situation.
Business rates must return to local control or the Government will tax successful enterprises out of business
Cllr Piers McCausland is a member of Wandsworth Council and argues that the setting of business rates must return to local control.
Small businesses have financed the Government and have helped local councils pull up many rundown areas by their bootstraps. But precisely where these partners have succeeded, they are being pilloried by this Government.
Instead of fiscal sympathy in an economic downturn for those who have successfully regenerated their areas, they have bitten the hand that feeds them. Business rates have climbed into the stratosphere with retailers the hardest hit.
Soon the prosperous tomorrow will be replaced by rows of steel shuttered parades in your ward and wards across the country. For in truth there is precious little many local councils can do, though Wandsworth is proposing a hardship contribution for the hardest hit.
This blight is largely made at the centre with its demand for uniformity in business rates throughout England and Wales.
Businesses with a potentially prosperous tomorrow and “indigenous” businesses alike within these areas are hit.
In my ward, a launderette on St John’s Hill has seen its net business rate skyrocket. Its proprietor for 30-odd years says his margins are so tight it will have to close. The clientele is mainly working class. Where will these people go then?
The answer must be local accountability. The setting of local business rates must return to local control. The quality of local council policy and administration has improved since the early 1980s. It must be given a chance to shine here.
In the nearly three years I’ve been responsible for the council’s economic development function business rates have been one of the most consistently raised concerns. Business rates are set centrally by the government, but they make the council collect the money on their behalf. If anything this makes businesses even more aware that they don’t benefit from being based in an efficient borough like Wandsworth: residents get a low council tax and excellent services, businesses pay central government taxes and do not benefit from many council services.
This year was promising to be particularly bad, because it marked the end of transitional relief. Commercial properties were revalued in 2005 with some local businesses seeing their rateable value double. Transitional relief was introduced for four years to soften the impact. However, this meant rises were limited in 2006, 2007 and 2008, but any remaining transition would be in one fell swoop in 2009.
Amazingly, the government didn’t see this coming! In Wandsworth businesses faced their rates doubling, trebling and even quadrupling overnight. And it couldn’t have come at a worse time, in a recession small businesses – who often operate on small margins at the best of times – were facing disaster.
The council had been calling on the government to extend transitional relief, and the government has belatedly listened. Sort of.
Businesses will now be allowed to defer the some or all of the increase and pay it over the following two years (2010-11 and 2011-12). Of course, it might well be this is just deferring the problem if the recession is still creating a difficult trading environment, but we have to take what we can get. Given that this problem has been four years in the making we should be pleased the government has been able to cobble something together at the last minute (although still not in time for the start of the financial year, businesses will have to pay a few months at the increased rates) we should be grateful.
Wandsworth has also been promoting small business rate relief. So far nearly 2,000 companies have benefited by over £1,000,000 in relief. If you think you might be eligible you can find out more on the council’s website.