Convenience stores and other small businesses have been cheated out of more than £20m of rates relief as a result of council errors.
In April, a freedom of information investigation by Retail Express and chartered surveyor Ian B Sloan forecast that local authorities would fail to hand out millions in transitionary rate relief for the 2017/2018 year, due to using the wrong criteria when deciding what businesses should receive the financial help.
Despite Sloan warning 400 rates specialist council staff and councillors about the shortcomings in May, most refused to take any action to correct the mistake, meaning the unspent funds were returned to the government in September.
Home Secretary Sajid Javid was the secretary of state for communities and local government when transitional relief was introduced and personally signed-off on the policy. However, his own Bromsgrove constituency was one of the worst offenders when it came to helping local businesses with the funds. Bromsgrove wasted more than 65% of the funds made available to it.
At a Bromsgrove council meeting last night council staff admitted to receiving the warning and doing nothing about it. Ian B Sloan attended the meeting and spoke with councillors to explain what had gone wrong. The councillors present then announced that a financial audit investigation would be launched to uncover what went wrong on Javid’s constituency.
Sloan told RN: “At one point it was absolute chaos with councillors shouting over each other, but eventually they came to understand the scale of what has happened. The sad thing is that they were warned, and small businesses suffered because they didn’t listen.”
According to newly released government data the most wasteful councils were the Isles of Scilly (100% wasted), Herefordshire (97.8% wasted), Amber Valley (89.69% wasted), Redditch (87.16% wasted), Fenland (86.67% wasted), Trafford (86.12% wasted), Runnymede (83.45% wasted), Broxbourne (82.36% wasted), Swindon (81.85% wasted) and Stevenage (81.85% wasted).
Of the 326 councils in England, 39 failed to distribute even half of the funds made available to them, and more than 150 councils deprived local businesses of at least 10% of the funds made available to them.
£175m was made available in the 2017 Spring Budget to help businesses that had suffered from business rates increases due to the 2017 revaluation. The £20m in waste represents approximately 10% of the total funds available.
RN has approached both Bromsgrove Council and the Ministry of Housing, Communities & Local Government to explain why the money was not put to use. The full investigations will be included in next week’s issue of RN.