Investigation: Millions of pounds for business rate relief unspent or out of reach
By Andrew Merrell | 21st May 2018
Hundreds of thousands of pounds given to councils in Gloucestershire to help businesses with rate relief has been unallocated after a year.
An investigation involving scores of freedom of information requests shows that the figure for unspent money in Gloucestershire is £256,000 and nationwide a whopping £17.5million.
Here in the county all local authorities still have money to allocate - which you might think suggest there is still time for businesses to claim back their billed rates for 2017/2018.
But Punchline has learned this may not be possible because of confusion around the scheme leading to some local authorities having not only not allocated all their money, but even given tens of thousands back to Government.
Mike Cherry, chairman of the Federation of Small Businesses, said just the underspend alone by local authorities was "completely unacceptable."
FSB research showed one in five small business owners considered selling or shutting because of business rates rises, he said.
"Many small businesses across England will have lost out causing untold pressure, leaving some in jeopardy," said Mr Cherry.
All local authorities were allocated money for discretionary "revaluation" rates relief by the central Government, following the Chancellor's 2017 Spring budget.
Funds were intended to help those with rates increases from April 2017.
The pot of money should have been made available to any business with a rateable value below £200,000 that saw an increase in its rates last year - even if they have already received small business rates relief or discretionary relief.
Some councils believe the ring-fenced money was available to spend only until the end of March this year, after which it had to be given back to Government.
But Punchine understands this is not the case as secondary legislation was never passed to enforce the deadline leaving councils until September 30 this year to allocate. But that news will come too late for businesses in some areas.
Jayne Gilpin, Cheltenham Borough Council, says: "We were allocated £271,000 for 2017/18 and this had to be allocated to businesses by 31/03/2018. We distributed just over £236k leaving £34k unspent at 31/03/2018. We can no longer allocate this money and it is handed back to government."
"We have a separate pot of funding available to allocate in 2018/19 which is £132,00. So far we have allocated £117,000."
A spokesman for the Forest of Dean District said: "We were allocated £169,000 for 2017/18 and this had to be allocated to businesses by 31 March 2018.
"We distributed just over £154k, leaving £15k unspent at 31 March 2018. We can no longer allocate this money and it has been handed back to Government."
Ian Sloan, of Bankier Sloan Chartered Surveyors, which has an office in Moreton-in-Marsh, is the driving forces behind the investigation and worked with Retail Express and Punchline to make clear the scale of the underspend.
Retail Express carried out the incredible mass freedom of information request applications which underpins the whole story.
The campaign involved analysing relief spending at 220 councils and found more than two thirds had failed to distribute all the funds available. The average under spend at these councils was 20 per cent.
Tewkesbury Borough Council still has £105,359 to spend - 55 per cent of its total - having allocated £85,641 to 13 businesses (that's £6,587 per business).
Gloucester's underspend was £99,652 as of April 1, with £101,666 distributed to 148 businesses.
A spokesman for Gloucester City Council said the council believed the deadline was March 31 and said it was complying with guidance from the Ministry of Housing, Communities and Local Government.
But the MHCLG first told Punchline "There was no deadline for councils to spend it" then when asked for clarification said "September 30".
Stroud allocated £251,048 - more than 99 per cent of its funds - to 144 businesses, leaving just £952.
The Cotswold had a total pot of £367,692, which is has given all but £1,307 to 167 companies to help with rate relief.
Mr Sloan urged businesses which thought they could and should benefit to "write to your council and seek a reason why you should not receive the relief".
Based on the average relief amount handed out and the £17.5m of funds left over, there is enough left to give discounts to 14,536 businesses in England.
While the average relief currently wasted by those councils with under spend is 20 cent, in some areas it is much higher.
Runnymede failed to hand out 71 per cent of its funds, Fenland District Council withheld 87 per cent.
Punchline says: We have sympathy with the local authorities involved. There appears to have been widespread confusion around both the delivery, access to and especially when the deadline was for spending any money by. Ian Sloan's dedicated meticulous digging and Retail discovered the correct deadline date and the mistake of many councils. But if Punchline can double check and confirm such things - one wonders why local authorities were not able to do so too.
It is also worth noting that local authorities were able to use their own criteria for delivering the money, with some elsewhere ensuring no business experienced a rate rise and others targeting specific businesses to benefit the authorities overall local economies.
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