Social Enterprise UK has charged into the debate over charitable rate reliefs, saying charities and landlords should stop “abusing” them.
In a new report published in conjunction with charity 3Space and Meanwhile Space CIC, Social Enterprise UK (SEUK) explores how business rates can be used as a tool to nurture community-based enterprise on high streets.
It aims to identify ways to tackle the problem of one in seven high street shops sitting empty – a ratio forecast to rise to one in five by 2018.
The report, Business rates, economic and social value, concludes with a list of recommendations aimed at local authorities, the Local Government Association, grantmakers, central government and others, that the authors believe could help to reverse the decline of British high streets.
Among the recommendations is this one: “Charities and landlords should refrain from abusing existing charitable rate reliefs.”
Two charities have been in the High Court recently after local authorities challenged their claims for charitable rate relief on largely empty buildings. Kenya Aid Programme and the Public Safety Charitable Trust had been leasing empty properties from landlords and using them for their work, but the councils claimed the extent of the charitable use of the premises was not sufficient to justify their claims for rate relief.
Many more charities are believed to be doing similar things, but the two recent cases could spark a backlash from local councils around the country.
Now SEUK and its partners have chosen to highlight the practice in their report, and been clear about how they view it.
Other recommendations include:
- ‘Meanwhile’ experts - those who activate empty spaces while they wait to fulfill a longer-term use - and others should publicise good examples of landlords actively seeking to use the empty rate relief regime in a way that supports economic and social value.
- Local authorities should experiment with the idea of ‘Meanwhile enterprise zones’ and ‘Social enterprise zones’.
- Central government, a partnership of local authorities, grantmakers or others should fund the development of a robust and independent evaluation of the costs and benefits of meanwhile use.
- The GLA should explore how a fund model could help create the right incentives for councils to think more strategically about their flexibility in business rates.
Andrew Cribb of 3Space said: “There is a danger that some local authorities may be scratching their heads and will draft policies in isolation, develop flawed approaches, or worse still, just do nothing.
"Yet they have this opportunity to see the new flexibility in the business rates regime as a constructive tool to enable their local area to flourish and deliver social and economic value, stitched into wider strategic regeneration plans.”
