Business rates. You see… some of you are already nodding off!
Business rates – how they are calculated, how they are billed, enforced and collected – have been a thorn in the side of many a party in Government for decades. It has been the veritable ball kicked into the long grass in the hope that it will disappear from the mind’s eye of businesses large and small. That is, until now.
The long grass ploy has delayed things since properties were valued last – some nine years ago. Nine years. A great deal has changed in nine years.
The jump in what many folk will be paying from this April is eye watering: in some cases, a hike of hundreds of percent above previous bills.
In England, plans are afoot to change the way rates are collected and distributed. That is somewhat down the line – but the Government in Westminster has chosen to maintain support that ensures rates do not spiral as much as they otherwise might. Even so, many are very uncomfortable that business – yet again – is being hit so hard.
North of the border, the Scottish Government chose to double a supplement levied on ‘large’ business premises. The result? More than 5,000 shops will pay more than those in England & Wales – and a further 22,000 businesses are affected negatively by the doubling. That is, until the government back-pedaled to ensure and reassure that would not be the case.
The increase in some property values is deemed to be up to 400%, yet the key problem with Business Rates is that it takes no account of trading conditions. Let’s face it, many may be better off in 2017 – but universal property values and business performance across the board haven’t exactly boomed since 2008. And in that time a small matter of burgeoning e-commerce has changed the world in which we live.
This time last year, the Scottish Government announced that former chairman of RBS in Scotland, Ken Barclay, would lead a review of business rates. Publication is expected this summer – but further calls for reform are being made after the Government was forced to step in with a cap to prevent what many forecast would cause catastrophic damage to many small businesses.
Prior to the cap, the hospitality industry – especially pubs and hotels – and the care sector were the hardest hit. Industry and manufacturing will be hit too – along with energy companies, including (somewhat bizarrely) those who are helping to generate clean and green electricity through hydroelectric schemes in rural areas.
What are businesses to do?
Close might be the answer. And if that happens, what are local authorities to do when they see their share of the business rates collection fall further?
There are numerous organisations representing business and business interests – from the CBI to Chambers of Commerce, from the British Retail Consortium to the Association of Town & City Management, from British BIDs to BID Scotland … as well as many smaller associations promoting niche groups – be they in retail, tourism or other industries.
Many of these groups – together with politicians – have lobbied to soften the rates blow and to call for fundamental reform. And other high profile commentators and campaigners waded in too. Mary Portas, who was tasked with helping the UK Government in 2011, is reported in the Telegraph as forecasting the recent rate hikes might force the closure of 1 in 3 independent stores. Another report has claimed that seven shops a week are closing in Scotland. That not only has a direct effect on local communities through loss of the retail offering and a loss of jobs, but it is also detrimental in many other ways. The look and feel of communities with empty shops has a negative impact, not only aesthetically, but also in hard cash. Funds dry up from wages circulating back into the local economy – and business rate receipts decline. It is a downward spiral.
Opportunities and vehicles are in place for businesses to have more of a say: they just need to take that step.
Politicians are elected at local, devolved and national levels by people – not by businesses: but people make up the businesses – be they employees or owners, contractors or CEOs.
Business Improvement Districts (BIDs) were created for this very purpose: to give businesses a stronger voice at a local level – to affect decisions taken in their communities. But BIDs have been around for a decade in the UK – and much has changed in that time.
BID Scotland says – quite rightly – “by working together in a strong local partnership businesses can reduce costs, share risks and create new platforms for growth, contributing to the wider regeneration aspirations of the local community.” But they also recognize the need for change. Their website states “we are now looking for The Next Generation of BIDs in Scotland” … and there lies the opportunity.
In this ‘new generation’, BIDs, towns, cities and communities need to garner broader support to campaign harder for things that affect their businesses. The reports and interviews that are filling column inches in papers and online right now are in the wake of the bolting horse. The business rates increases were predicted by many including Colliers International who published a comprehensive review and forecast of the 2017 landscape last autumn.
Businesses – through BIDs or other collectives – do have the opportunity to take action, but their voice needs to be louder, much louder, and they need to engage with more people across their communities.
At the Scotlands Towns Partnership conference in Kirkcaldy in November 2016, Kelvin Campbell spoke from the organization, Massive Small. To quote them: “We must mobilise people’s latent creativity, harnessing the collective power of many small ideas and actions. This happens whenever people take control over the places they live in, adapting them to their needs and creating environments that are capable of meeting the challenges of the future.”
Kelvin adds: “There is a tremendous amount of energy out there, but all too often it is obstructed by top-down systems from replicating and scaling up, which must happen for it to make a significant real world impact. We need a new set of ideas, tools and tactics to help engaged citizens, civic leaders and urban professionals to work together to build a viable urban society.”
The representation of businesses at a local level remains too weak. Place managers – be they BID, town or city managers – are pulled in every which way. Few, if any, have the combined skills, time and resource to engage fully with those who are paying for their service delivery.
The last valuations for rates were nine years ago. The first BID is Scotland launched in the same year, yet BIDs, towns, cities and communities remain largely in the dark when it comes to embracing and using digital and social media to the advantage of their businesses: Facebook is 13 years old. Twitter 11. Instagram is 7 this year. Even Snapchat has been around for six years. Responsive web design is now common place.
One UK Business Improvement District is advertising for a BID Manager. The template is the same we have seen used over and over … for years. It includes a dozen ‘key responsibilities’ …
Number 3? To manage the updates to the website and social media platforms with current and relevant information. And within number 10? Monitoring social media feeds, managing mailshots and keeping a record of relevant PR activity. And number 6? … regular visits to the BID Businesses. This particular BID has 170 levy-payers. If the manager spends just 30 minutes with each, that’s 85 hours … on a part-time role.
Towns and cities do not operate ‘part time’. They operate seven days a week – with a near 24/7 delivery: the digital and social media requirements to meet and exceed the demands – not only of levy-payers but also of the end customer – cannot be delivered as two items listed in a raft of responsibilities … managed by one person … working part time.
Towns and cities – be they BIDs, community partnerships, local authority development projects or other guises – need to realise that integrated digital and social media communication should be the foundation of their delivery, and that its success requires planning, scheduling, engagement, interaction, monitoring and evaluation … seven days a week.
If communities become more connected, if businesses are better informed, represented and have a louder voice, their communities will be better placed to shape policy changes that affect them. Of course, those business organisations are doing a good job representing their members with lobbying in the corridors of Westminster & Holyrood, but the world is a very different place from nine years ago.
The ball is out of the long grass. If businesses – and the people in them – act, they can pick up the ball and change the game. They can ‘harness the collective power’ and change the way people rate their towns, cities and communities – for good.
This Blog was first published on Huffington Post