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Fears Aberdeen businesses will be ‘forced to close’ without rates U-turn from Scottish Government

Aberdeen business rates fears
Aberdeen City Council co-leaders Douglas Lumsden and Jenny Laing.

There are fears delaying a review of business rates could be the knock-out punch which forces waves of closures in Aberdeen and  leaves council coffers bare.

Local authority leaders have hit out at the Scottish Government after it was announced the 2022 rates revaluation would be pushed back to 2023, meaning it will be calculated using 2022 rental values.

The delay – taking Scotland in line with England and Wales – is hoped to give the property market time to fully reflect the impact of the pandemic.

But for businesses in Aberdeen, it is argued it means another year of paying rates calculated when the north-east market was more buoyant in 2015 – before the full effects of the oil downturn took effect.

After an economically devastating local lockdown last month, council bosses and business leaders alike are concerned this would be another blow for firms already on the brink.

The Scottish Government must listen to business as it will be businesses that will aid Aberdeen’s recovery from Covid-19.”

Douglas Lumsden

Council co-leader Douglas Lumsden wants the local authority’s finance boss, Steve Whyte, to write to First Minister Nicola Sturgeon and other Holyrood party leaders to highlight the “further strain” the delay would place on firms.

If the government won’t rethink the wait, the Conservative, Aberdeen Labour and independent administration is calling for ministers to provide the “necessary substantial financial help” to get firms through the extra year of rates calculated at higher 2015 prices.

‘Simply unacceptable’

Mr Lumsden, who is also council co-leader, told The P&J: “Aberdeen’s businesses have already suffered thanks to the statutory restrictions imposed on the city by the Scottish Government and the last thing they need right now is to hear that the promised rates revaluation is no longer going ahead in 2022.

“The Scottish Government must listen to business as it will be businesses that will aid Aberdeen’s recovery from Covid-19.

“It is simply unacceptable for the Scottish Government to ask already struggling businesses to pay business rates that no longer reflect the current rental market value, meaning business in Aberdeen are being penalised for the success of 2015 when the market in Aberdeen was strong.”

Fellow co-leader Jenny Laing revealed her fears “many businesses in Aberdeen will be forced to close” without a U-turn.

The co-leaders will turn to the business chiefs helping to steer the city through the pandemic for support.

Shane Taylor, Aberdeen Chamber of Commerce’s research and policy manager.

Aberdeen And Grampian Chamber of Commerce’s Shane Taylor said: “The decision goes against the weight of business opinion and risks creating a major drag to economic recovery in Scotland, particularly so in the north-east where rates bills haven’t reflected reality for some time.

“If we fail to get the balance right, we risk undermining the return of firms to offices and city centres, the decimation of our high streets and depleted coffers for cash-strapped councils.

“As we look to tackle the huge challenges that recovery from Covid-19 presents, we need decisive action on business rates from government, not delay.”

‘Adjusting to the damaging impact of coronavirus’

Aberdeen Inspired, the business improvement organisation, has thrown its weight behind the calls too.

But the Federation Of Small Businesses has revealed “broad support” for the government’s plans, warning next year’s values might still not be a true reflection of the virus’s toll.

That justification was used by a spokesman for Finance Secretary Kate Forbes too, who told The P&J: “The next non-domestic rates revaluation in Scotland will take effect in 2023 on the same date as in England and Wales – but unlike England and Wales, it will be based on rental values as at April 1 2022, as opposed to April 1 2021, in order to give sufficient time for market conditions to fully adjust to the damaging impact of coronavirus.

He added: “If the Scottish Tories are serious about protecting businesses in Aberdeen and across Scotland they should be lobbying Boris Johnson and their Westminster bosses not to scrap furlough next month, which risks thousands of jobs – and to avoid a no-deal Brexit at the end of the year, which threatens to be utterly catastrophic coming on the back of the economic impact of the pandemic.”

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