Lewisham Council has reversed its move to scrap discretionary rate relief for a small local charity after NCVO chief Sir Stuart Etherington intervened and asked it to reconsider.

Lewisham Shopmobility provides wheelchairs and mobility scooters for disabled people to use while shopping in the town centre, charging a nominal fee for their use. It operates from a shop provided free by Lewisham Shopping Centre and is funded mainly by a grant from Lewisham Council.

Until recently the Council granted discretionary rate relief to the charity, exempting it from paying business rates on the premises it uses. But budget cuts forced it to review its rate relief policy and it decided to start charging Shopmobility 20 per cent of the full business rates, without giving the charity any compensatory increase in its grant.

The decision meant that since last June, the charity has had to find monthly payments amounting to just under £4,000 a year.  The only way it has been able to pay the bills is by the one paid employee taking a pay cut.  Attempts to contact the council to discuss the issue have been ignored.

On 13 March Sir Stuart Etherington wrote to the chief executive of Lewisham Council, expressing his concern at the situation and requesting the council reconsider.  He wrote that the extra cost threatened the future of Shopmobility and the service it provides to vulnerable local people.

“Lewisham are funding this important service, and yet have decided to reclaim £3,961.95 (essentially its own grant money) which compromises the delivery and efficiency of the service which they have recognised as being important and have decided to fund,” Sir Stuart said.

He added that he had heard that other charities in the borough are now also being charged the 20 per cent discretionary relief, when they also used to be excused.  He enquired as to whether a policy decision has been made to charge discretionary relief to charities, and if so, what consultation and impact assessment has been carried out.

A week later, Lewisham Council responded to say that it is “in the process of reviewing its discretionary rate relief policy to ensure any awards that are made go to the most deserving organisations”.  It will be consulting on this new policy and doing an equalities impact assessment.

However, Janet Senior, the Council's executive director of resources and regeneration, also said she had considered Shopmobility’s appeal and concluded “I do think there are some extenuating circumstances in their case”.  As a result, she would award discretionary rate relief to cover the remaining 20 per cent of the business rates bill for the period up to 31 March 2014.