Agenda item

Notice Of Motion Regarding "Business Rates and Financial Support to Businesses" - Given By Councillor Mazher Iqbal And To Be Seconded By Councillor Ben Miskell

That this Council:-

 

(a)       notes the Council’s commitment to the city’s businesses and that Sheffield has over 19,000 businesses, but believes support is needed to help organisations who are struggling, and further notes that the Council supports over 9,300 businesses through some form of business rates relief, which reduces the amount of rates they have to pay;

 

(b)       believes that the country’s high streets, neighbourhood retailers and community centres have been badly damaged over the last decade, and that a big part of this decline has been caused by unfair rates and a system of taxation which appears to support online business giants whilst punishing conventional retailers;

 

(c)        agrees with the Confederation of British Industry (CBI) that the business rates system is long overdue radical reform and at present it is ‘entrenching regional unfairness’;

 

(d)       notes the Council has no powers on what businesses are billed, and that the Government’s Valuation Office Agency (VOA) sets the value of a property and the annual bill is set based on that value;

 

(e)       believes that the VOA  is woefully underfunded by the Government, meaning, despite their best efforts, valuations are taking 12 – 18 months, a long and often damaging delay for businesses;

 

(f)        believes everything possible must be done to support the city’s smaller businesses, and notes this Council’s Small Business Rate Relief provides support to businesses with a Rateable Value up to £16,000 – this is the largest relief granted and 7,200 businesses receive it, and of these, 6,700 receive the full amount, meaning they have no rates to pay;

 

(g)       notes that the Small Business Rate Relief is calculated to be worth over £17m to Sheffield businesses;

 

(h)       notes that in addition to this support, over £26m per year is awarded through other forms of rate relief, and that this Council is committed to using Business Rates Relief wherever it can to support a varied range of businesses and organisations, including small manufacturing companies, pubs, restaurants, universities, health centres, hospitals, theatres and charities;

 

(i)         notes that whilst the Council cannot change the bill set by the Government, the Council has used what powers it does have available to provide fairer ways of repaying the bill and has agreed different schedules of payments for businesses who are struggling;

 

(j)         notes with alarm that the Government is considering reducing the revenue grants received by local authorities and instead replacing it with 100% retention of business rates, and contends that such a move would be self-defeating as Sheffield, like other local authorities, could never raise enough business rates to offset the loss of grants and, therefore, this policy should be opposed in the strongest possible terms;

 

(k)        believes that Government policy over the last decade has badly let down not only our high streets and neighbourhood retailers, but our key industries and business sectors, with an industrial strategy that is not fit for purpose, and which cherry-picks support for some industries over others – for instance, the Government had no problem bailing out Flybe but were not prepared to support Liberty Steel; and

 

(l)         commits to starting a campaign in the city, including the Chamber of Commerce and organisations from across the business community, to call on the Government to reform the rates system so that it is fairer for Sheffield.

 

 

 

Minutes:

7.1

It was formally moved by Councillor Peter Rippon, and formally seconded by Councillor Ben Miskell, that this Council:-

 

 

 

(a)       notes the Council’s commitment to the city’s businesses and that Sheffield has over 19,000 businesses, but believes support is needed to help organisations who are struggling, and further notes that the Council supports over 9,300 businesses through some form of business rates relief, which reduces the amount of rates they have to pay;

 

(b)       believes that the country’s high streets, neighbourhood retailers and community centres have been badly damaged over the last decade, and that a big part of this decline has been caused by unfair rates and a system of taxation which appears to support online business giants whilst punishing conventional retailers;

 

(c)        agrees with the Confederation of British Industry (CBI) that the business rates system is long overdue radical reform and at present it is ‘entrenching regional unfairness’;

 

(d)       notes the Council has no powers on what businesses are billed, and that the Government’s Valuation Office Agency (VOA) sets the value of a property and the annual bill is set based on that value;

 

(e)       believes that the VOA is woefully underfunded by the Government, meaning, despite their best efforts, valuations are taking 12 – 18 months, a long and often damaging delay for businesses;

 

(f)        believes everything possible must be done to support the city’s smaller businesses, and notes this Council’s Small Business Rate Relief provides support to businesses with a Rateable Value up to £16,000 – this is the largest relief granted and 7,200 businesses receive it, and of these, 6,700 receive the full amount, meaning they have no rates to pay;

 

(g)       notes that the Small Business Rate Relief is calculated to be worth over £17m to Sheffield businesses;

 

(h)       notes that in addition to this support, over £26m per year is awarded through other forms of rate relief, and that this Council is committed to using Business Rates Relief wherever it can to support a varied range of businesses and organisations, including small manufacturing companies, pubs, restaurants, universities, health centres, hospitals, theatres and charities;

 

(i)         notes that whilst the Council cannot change the bill set by the Government, the Council has used what powers it does have available to provide fairer ways of repaying the bill and has agreed different schedules of payments for businesses who are struggling;

 

(j)         notes with alarm that the Government is considering reducing the revenue grants received by local authorities and instead replacing it with 100% retention of business rates, and contends that such a move would be self-defeating, as Sheffield, like other local authorities, could never raise enough business rates to offset the loss of grants and, therefore, this policy should be opposed in the strongest possible terms;

 

(k)        believes that Government policy over the last decade has badly let down not only our high streets and neighbourhood retailers, but our key industries and business sectors, with an industrial strategy that is not fit for purpose, and which cherry-picks support for some industries over others – for instance, the Government had no problem bailing out Flybe but were not prepared to support Liberty Steel; and

 

(l)         commits to starting a campaign in the city, including the Chamber of Commerce and organisations from across the business community, to call on the Government to reform the rates system so that it is fairer for Sheffield.

 

 

7.2

Whereupon, it was formally moved by Councillor Martin Smith, and formally seconded by Councillor Mohammed Mahroof, as an amendment, that the Motion now submitted be amended by:-

 

 

 

1.         the deletion of paragraphs (a) to (k) and the addition of new paragraphs (a) to (e) as follows:-

 

(a)       asserts that the business rates system in England is not fit for purpose as it is extremely complicated, unpopular with the business community, unfairly disadvantages ‘bricks & mortar’ retailers over on-line companies and penalises businesses that seek to improve their premises;

 

(b)       is concerned that Government plans to allow full rates retention by local authorities but reduce central grant funding risks business being increasingly treated as a source of funding, rather than an integral part of the local community;

 

(c)        notes that Sheffield City Council has no control over property valuations & basic bills and little or no discretion on most of the relief schemes;

 

(d)       believes the schemes over which the Council does have control are confusing and ineffective, for example:-

 

(i)         the Hardship Relief scheme is mostly used to write-off the debt of businesses that have already ceased trading, rather than help them before they get into that state;

 

(ii)        payments under the Hardship, Not For Profit and Discretionary Top Up relief schemes are reported to be less than 0.1% of the baseline business rates funding; and

 

(iii)       the Cabinet Member for Business and Investment, and the previous Cabinet Member for Finance, Resources and Governance, gave conflicting information on whether traders in Chapel Walk seeking business rates relief should apply to the Council or the Valuation Office;

 

(e)       therefore directs the Cabinet Member for Finance, Resources and Governance to:-

 

(i)         conduct a review of all discretionary rate relief schemes to ensure that they are easier to understand and ensure that funds are targeted appropriately;

 

(ii)        update the Council’s Business Rates Discretionary Relief Policy accordingly; and

 

(iii)       complete both the above within the next three months.

 

2.         the re-lettering of original paragraph (l) as a new paragraph (f).

 

 

7.3

It was then formally moved by Councillor Paul Turpin, and formally seconded by Councillor Martin Phipps, as an amendment, that the Motion now submitted be amended by:-

 

 

 

1.         the addition of new paragraphs (l) to (p) as follows:-

 

(l)         notes that business rates reliefs are set by Government and this Council cannot claim credit for granting mandatory awards;

 

(m)      believes that far too many small businesses, independents and not-for-profits in Sheffield experience real difficulties in obtaining even the mandatory reliefs they are entitled to;

 

(n)       believes there has been a lack of support offered to independent businesses on Chapel Walk facing poor trading conditions for years under the scaffolding;

 

(o)       notes that businesses currently pay for business rates instead of the land owners, who, it is believed, have enough money to own the land;

 

(p)       calls for the outdated and unfair system of business rates to be scrapped and replaced by a land value tax on the owners of land and buildings rather than the occupiers; and

 

2.         the re-lettering of original paragraph (l) as a new paragraph (q) and the insertion, after the words “reform the rates system”, of the words “by replacing it with a land value tax”.

 

 

7.4

The amendment moved by Councillor Martin Smith was put to the vote and was negatived.

 

 

7.4.1

(NOTE: Councillors Angela Argenzio, Kaltum Rivers, Douglas Johnson, Ruth Mersereau, Martin Phipps, Paul Turpin, Peter Garbutt and Alison Teal voted for the amendment on the basis that the proposed additional paragraphs (a) to (e) in Part 1 of the amendment were to be additional paragraphs to the Substantive Motion, and not replace paragraphs (a) to (k), and asked for this to be recorded.)

 

 

7.5

The amendment moved by Councillor Paul Turpin was then put to the vote and was also negatived.

 

 

7.6

The original Motion was then put to the vote and carried as follows:-

 

 

 

RESOLVED:  That this Council:-

 

 

(a)       notes the Council’s commitment to the city’s businesses and that Sheffield has over 19,000 businesses, but believes support is needed to help organisations who are struggling, and further notes that the Council supports over 9,300 businesses through some form of business rates relief, which reduces the amount of rates they have to pay;

 

 

 

(b)       believes that the country’s high streets, neighbourhood retailers and community centres have been badly damaged over the last decade, and that a big part of this decline has been caused by unfair rates and a system of taxation which appears to support online business giants whilst punishing conventional retailers;

 

 

 

(c)        agrees with the Confederation of British Industry (CBI) that the business rates system is long overdue radical reform and at present it is ‘entrenching regional unfairness’;

 

 

 

(d)       notes the Council has no powers on what businesses are billed, and that the Government’s Valuation Office Agency (VOA) sets the value of a property and the annual bill is set based on that value;

 

 

 

(e)       believes that the VOA is woefully underfunded by the Government, meaning, despite their best efforts, valuations are taking 12 – 18 months, a long and often damaging delay for businesses;

 

 

 

(f)        believes everything possible must be done to support the city’s smaller businesses, and notes this Council’s Small Business Rate Relief provides support to businesses with a Rateable Value up to £16,000 – this is the largest relief granted and 7,200 businesses receive it, and of these, 6,700 receive the full amount, meaning they have no rates to pay;

 

 

 

(g)       notes that the Small Business Rate Relief is calculated to be worth over £17m to Sheffield businesses;

 

 

 

(h)       notes that in addition to this support, over £26m per year is awarded through other forms of rate relief, and that this Council is committed to using Business Rates Relief wherever it can to support a varied range of businesses and organisations, including small manufacturing companies, pubs, restaurants, universities, health centres, hospitals, theatres and charities;

 

 

 

(i)         notes that whilst the Council cannot change the bill set by the Government, the Council has used what powers it does have available to provide fairer ways of repaying the bill and has agreed different schedules of payments for businesses who are struggling;

 

 

 

(j)         notes with alarm that the Government is considering reducing the revenue grants received by local authorities and instead replacing it with 100% retention of business rates, and contends that such a move would be self-defeating, as Sheffield, like other local authorities, could never raise enough business rates to offset the loss of grants and, therefore, this policy should be opposed in the strongest possible terms;

 

 

 

(k)        believes that Government policy over the last decade has badly let down not only our high streets and neighbourhood retailers, but our key industries and business sectors, with an industrial strategy that is not fit for purpose, and which cherry-picks support for some industries over others – for instance, the Government had no problem bailing out Flybe but were not prepared to support Liberty Steel; and

 

 

 

(l)         commits to starting a campaign in the city, including the Chamber of Commerce and organisations from across the business community, to call on the Government to reform the rates system so that it is fairer for Sheffield.

 

 

 

 

7.6.1

(NOTE: The Deputy Lord Mayor (Councillor Gail Smith) and Councillors Bob Pullin, Richard Shaw, Bob McCann, Tim Huggan, Mohammed Mahroof, Joe Otten, Colin Ross, Martin Smith, Vic Bowden, Roger Davison, Barbara Masters, Shaffaq Mohammed, Sue Alston, Andrew Sangar, Cliff Woodcraft, Ian Auckland, Sue Auckland, Steve Ayris, Kevin Oxley, David Baker, Penny Baker, Vickie Priestley, Alan Hooper and Mike Levery voted for paragraphs (a), (c), (d), (g), (h), (j) and (l) of the Motion, and abstained from voting on paragraphs (b), (e), (f), (i) and (k) of the Motion, and asked for this to be recorded.)