Charities fear losing millions after being locked out of rates review

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​Barclay Review has failed to listen third sector - now charities fear they could lose millions of pounds if rates arrangements change 

27th April 2017 by Robert Armour 0 Comments

Charities fear they could lose millions of pounds if a Scottish Government review of business rates continues to lock out the third sector.  

The Barclay Review of Business Rates is coming under increasing criticism for failing to engage third sector groups as its July reporting deadline approaches.

Now a leading third sector body has written to Holyrood’s local government committee demanding to know why the sector has not been engaged.

So far the review, which was set up to make it easier for companies to trade in Scotland, had received 156 written submissions, taken oral evidence from 40 individuals but has only held meetings with businesses around the country.

This week the review's chair Ken Barclay admitted to the committee both the third sector and the public sector haven’t been involved in discussions, leading charities and MSPs to question the validity of the review. 

John Downie, director of public affairs at the Scottish Council for Voluntary Organisations (SCVO), said the review had shown a “complete lack of engagement and understanding of the sector” and that the outcome could potentially cost charities’ millions.  

In a letter to Bob Doris, convener of the local government committee, Downie said: “Despite offers from SCVO to facilitate engagement, the Barclay Review has not held roundtables or evidence-sessions specifically with third sector organisations in the manner witnessed during previous consultations on a range of topics from social care standards to social security.

“This means that, much like the public sector, the third sector has been under-represented, or even ignored, within this scope of this review.”

Charities currently enjoy a mandatory 80% business rates reduction on their properties while charity retail outlets often receive an additional 20% discretionary reduction from their local authority.

If any move to reduce the current arrangement was implemented, it would mean charities having to downsize headquarters and potentially pay off staff.   

“The ramifications are huge for our sector yet we fail to be engaged by the process,” Downie added.                  

Downie said that SCVO has also been blanked in its attempts to hold a meeting with officials from the review, with the Scottish Government also resisting a meeting, claimin that it is independent - despite a civil servant serving as secretary to the review.

“The base requirement must be to at least engage with a diverse range of stakeholders in Scotland. On current evidence, we do not believe this requirement has been met,” Downie added.

A spokesperson for the Charity Retail Association said it would be concerned if there was any move to change the current arrangements for rate relief.

“Charity shops currently generate huge amounts of social value. For the rates relief they are give, they return four of five times this amount.

“Rate relief contributes to a thriving charity retail sector in Scotland. To save money by cutting back this benefit would be a very short sighted move,” he said. 

A spokesman for the charities Tax Group (CTG) added: "CTG would be concerned at any attempts to reduce rate relief or narrow eligibility, causing a postcode lottery for charities."

A Scottish Government spokesman said: “The external review of non-domestic rates is independent from the Scottish Government. We understand the review group will further engage with the public and third sectors, including SCVO, to supplement the input received to date.”

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