£7m fund to support Hackney businesses hit by rate hikes
Hackney Council has launched a consultation on how to allocate £7.1 million to support local businesses whose Business Rates have increased due to Government reforms.
Under its proposals, the money will be targeted at the borough’s most severely affected small and medium businesses. However, certain types of businesses, such as betting shops, payday lenders and national and multi-national chain stores, as well as empty properties, would be excluded.
The extra funding follows the national revaluation of business premises, announced by the Government last year. New ‘rateable values’ were published in March and are now being used to set Business Rates.
Because property prices have risen dramatically in Hackney over recent years, the borough experienced an average rateable value increase of 46%, the largest in London and five times the England average. Thousands of businesses now face bills thousands of pounds higher than they were in 2016/17.
Hackney Council is not involved in setting rateable values or Business Rates, these are set by the Valuation Office Agency and the Government. Because the borough was so disproportionally affected, the Council called on the Government to offer more support for businesses. This included writing to the Chancellor in November and running a joint-campaign with the East End Trades Guild which resulted in a petition with 10,500 signatures being handed in to Downing Street in March.
The Chancellor subsequently announced the Discretionary Relief Scheme in his spring Budget to help businesses facing rises due to its revaluations. Councils have been allocated part of a £300 million fund, proportionate to how adversely affected businesses in their area have been. It covers 2017/18 to 2020/21 and councils must design their own scheme to distribute it locally.
Hackney Council received £7.1m in total, and £4.1m is available in 2017/18. The Council had been waiting for detailed information from the Government about the new fund before proposing its local scheme for consultation with the business community.
The Government’s severe and disproportionate Business Rates hike has hit many of Hackney’s businesses. Government has taken an extraordinary long time to instruct Councils to start offering support through the Discretionary Relief Fund. Now the Council has the information it is important to make sure that the most appropriate scheme for Hackney is designed and implemented as soon as possible.
“The Council’s priority is to support the small and medium businesses which are at the heart of Hackney’s diverse communities and make up the boroughs unique character. Whether it be the established family firms or innovative start-ups, the funding is proposed to be focused on the enterprises which create Hackney’s thriving and vibrant high streets and business clusters.
“Though this extra funding, and the other support measures announced by the Chancellor, is welcome it is not enough and we know that many businesses will still face difficult months and years ahead trying to cope with the Government’s hikes. Hackney Council will keep doing all it can to offer support and advice to our business community, and make sure the call for a reasonable, fair and affordable rate system is heard in Westminster and City Hall.
Under the Council’s proposed scheme, the amount of relief given to a business will be proportionate to the amount its bill has increased from 2016/17 to 2017/18.
Relief will only be provided to ratepayers whose 2017/18 rateable value is £200,000 or less, and whose 2017/18 Business Rates bill, after exemptions and other reliefs, increased by 12.5% or more due to the Government’s revaluation. It’s anticipated that 2,200 small and medium businesses may qualify for support.
Full details on Hackney Council’s proposed Discretionary Relief Scheme are available at www.hackney.gov.uk/businessrates. The closing date is 26 September.
The Discretionary Relief Scheme was one of three measures announced by the Chancellor. The two others relate to businesses which have lost some or all of their Small Business Rate Relief, and pubs with a new rateable value of below £100,000. About 450 Hackney businesses and 120 pubs are expected to benefit.
These two measures do not form part of this Council’s consultation, but more information is available at www.hackney.gov.uk/businessrates