Small businesses accuse government of failing them

“Theresa May’s Government today stands accused of failing to back small businesses, in a report due to be launched by Home Secretary Sajid Javid.

A damning poll reveals three in five people think the Tories are letting down the army of small firms which are vital to the economy and town centres.

The findings come from a YouGov survey of 1,644 adults for the Centre for Policy Studies think tank, which was founded by Margaret Thatcher.

It revealed 60% of people believed the Government “is not on the side of small business”, with just 14% disagreeing. …

This report shows how bureaucracy and paperwork are stifling the growth of our small businesses and offers a series of compelling ideas for how Government can roll back the tide and show that the Conservatives are backing entrepreneurs.”

https://www.mirror.co.uk/news/politics/small-businesses-damning-verdict-nine-16052199

Enterprise Zone “gazelle” companies (some in Devon) have unintended consequences

“Britain’s fastest-growing businesses could be contributing to job losses, according to research that claims the government’s policy of backing entrepreneurial companies “may be fundamentally at odds” with tackling regional inequalities.

A study of the performance of more than six million companies over a period of 17 years found that high-growth businesses had a “spillover” effect that could damage local employers.

Fast-growing companies, sometimes dubbed “gazelles”, have been identified in recent years as a way of boosting job creation and improving the nation’s productivity. Despite accounting for less than 5 per cent of businesses, these companies create about half of all new jobs and typically show higher levels of productivity.

However, the study, conducted by the Enterprise Research Centre, found that companies with the fastest employment growth — 20 per cent growth every 12 months for three consecutive years — tended to grow by “hoovering up” jobs from slower- growing businesses in the same region, in what the researchers called a “crowding-out competition effect”.

A 1 per cent rise in the incidence of high-growth businesses in a region was found to actually slightly cut employment, by 0.35 per cent on average — equivalent to a net loss of about 122,000 jobs UK-wide over the period studied, 1997-2013. The worst affected regions included the Scottish Highlands, Cheshire, the North East, Lincolnshire and Devon. In contrast, many urban areas in the South East and Midlands saw a net jobs gain.

Negative effects were most pronounced in the manufacturing sector and rural parts of the UK, where competition for skilled workers was most intense, the researchers said.

The fastest growing companies often attract the most skilled workers in a region where such staff are scarce, leaving slower-growing rivals struggling to attract employees and having to pay more to keep existing team members. As a result they hire fewer people and could be forced into job cuts.

Mike Harding, director of Inspira Digital, said that his ecommerce agency based in Barnstaple, Devon, competes with a London-based agency with a satellite office in north Devon. “If you have someone offering London wages here, that is a black hole that sucks up the local talent,” he said.

The issue can be exacerbated by large companies being offered tax breaks to open an office in Devon in the name of local development, Mr Harding said.

Professor Jun Du of Aston University, one of the authors of the research, said that “while encouraging clusters of fast-growth firms can bring productivity benefits to whole supply chains, some regions and industries with acute skills shortages could see unintended consequences”.

Source: The Times (pay wall)

Reuse, repurpose, refurbish: “The rise of the ‘meanwhile space’: how empty properties are finding second lives”

“Hospitals are rarely places of cheer and creativity, but the former Saint-Vincent-de-Paul hospital in Paris’s 14th district is one of the most exciting places on the left bank. Former ambulance bays and car parks now house allotments, a boules court, a makeshift football pitch and an urban campsite, and up to 1,000 visitors a day come to browse its market, eat at its cafes or catch a free live performance.

Renamed Les Grands Voisins, or The Great Neighbours, the site is a magnet for Parisians and tourists alike, its former treatment rooms, A&E building and wards now a hub of social and commercial enterprise. Alongside a hostel providing 600 beds for the homeless are artisan studios, pop-up shops and startups.

It’s like a village, an inclusive space with social areas and job opportunities where different people can interact,” says William Dufourcq, director of Aurore, the charity that runs the homeless shelter. “We were overwhelmed with its success.”

Closed since 2011, the hospital is slated for redevelopment into a new neighbourhood with eco credentials, private and social housing, shops, commercial and public facilities and green space.

Planning, clearance and construction on such a large scale takes time and, rather than leave the 3.4-hectare site empty for years, the developer, Paris Batignolles Aménagement, opened it to local organisations rent-free. The lease was scheduled to end this year, but has been extended until mid-2020 while construction begins on other parts of the site.

Les Grands Voisins is an example of a “meanwhile space”: a disused site temporarily leased or loaned by developers or the public sector to local community groups, arts organisations, start-ups and charities. Calls for making use of such spaces in other crowded urban centres are getting louder. A report published in October by the thinktank Centre for London highlights both the need for and positive possibilities of utilising empty urban sites and how this could transform the landscape of cities around the globe.

“The aim was to show the value ‘meanwhile use’ can add in cities where there is pressure on space,” says Nicolas Bosetti, one of the report researchers. He says public and private operators in Paris are more ambitious than those in London in exploring the use of disused buildings from metro stations to former nightclubs for short-term use as charity and cultural venues.

Other meanwhile spaces in Paris include Exelmans, a former police residence repurposed as a shelter for the homeless and refugees, run by Aurore on a two-year lease, and the Parmentier electricity substation, where the art collective La Générale has operated since 2008.

The substation, which is soon to be redeveloped, was included in Paris Reinvented, an initiative from the mayor’s office currently in its second year. Disused public sites are put up for auction to developers and architects who compete with plans for their redevelopment. “Les Grands Voisins showed how something like this can change an area and help plan future urban projects,” says Marion Waller, adviser to Paris’s deputy mayor for urban planning. “We didn’t want to sell buildings to the highest bidder but to the most innovative solution.”

The idea of loaning empty urban spaces to worthwhile causes is gaining ground elsewhere, with thriving projects in the Danish city of Aarhus and Philadelphia in the US, where it’s called “temporary urbanism”. However, in space-squeezed London, urban sites can remain empty for years, mainly because they have no obvious commercial potential or are waiting for permission to be developed.

The Centre for London found that an estimated 24,400 commercial properties in London are currently empty, with around half having been unused for more than two years. The total available vacant space, 6.5m sq metres, is equivalent to 27 times the footprint of Westfield London, Europe’s largest shopping centre. The majority of such places are owned by local authorities and developers. “Only one of 33 London borough councils publishes a database of vacant property and only one council keeps a list of groups interested in vacant spaces,” says Bosetti.

Bosetti thinks property owners could do more to match available sites with needy groups but says local authorities are afraid of squatters or allowing in destructive elements. “One of the main barriers to meanwhile use is the perception that hoarding a site is safer,” he says. “Often the opposite is true. Opening a site to a community and encouraging interaction with residents usually sees a reduction in antisocial activity.”

Squatting and vandalism are more likely if a building remains empty for too long, so one benefit of temporary tenants is the reduction in security costs. Another, according to Simon Hesketh, director of regeneration with the British developer U+I, is the connection a meanwhile space can forge with the community prior to redevelopment.

“We’ll try to organise events in temporary spaces for the widest cross-section of residents, to get their views and ask what they’d like and what works,” he says. “Not just to smooth the planning process, but because we can learn what we might include in our proposals.” …

https://www.theguardian.com/cities/2018/nov/28/the-rise-of-the-meanwhile-space-how-empty-properties-are-finding-second-lives

“Cash Machines Closing At A Rate Of More Than 250 A Month”

Rural areas and small businesses hit hardest:

“…A total of 76 protected ATMs – those which are located one kilometre or more away from one another – were lost in the period.

Of those, 43 had Post Office over-the-counter services available nearby while 12 could not be accessed by the public. Some 21 machines were shut down with no alternative access to cash.

The Federation of Small Businesses expressed concerns that the closures could hit small business owners in remote areas. …”

https://www.huffingtonpost.co.uk/entry/atm-closures_uk_5b993a88e4b0162f473313f0

“Business rates ‘to blame for high street decline’ “

“The boss of Tesco has warned that if the government does not reform business rates soon it will have contributed to the decline of high streets across Britain.

Dave Lewis, chief executive of the country’s largest supermarkets group, said: “A decision not to reform business rates by the government will be a statement of policy.

“It will be a deliberate decision not to support the retail industry. We believe businesses should pay taxes, as it is the responsible thing to do, but should the government be laying a heavier burden on a shrinking industry?” He said that the government was in danger of “overmilking” the retail industry through “completely disproportionate” and excessively high business rates and risked damaging the sector.

Business rates — a tax linked to the value of property that a business occupies — have become an increasingly fractious issue in the retail industry as traditional bricks-and-mortar operators labour under a tax burden not shared by online-only rivals.

Tesco’s rates bill is almost £700 million. The total annual business rates tax take for the Treasury is £30 billion. Mr Lewis said that while corporation tax had fallen [from 28 per cent to 19 per cent since 2010], inflation-linked business rates, which hit the retail sector harder than any other, had increased.

“Business rates have gone up while corporation tax has gone down very significantly and that is very different to everywhere else. The UK has the second highest property-based tax in the Organisation for Economic Co-operation and Development at 4.5 per cent [of the total tax take]: it is only 1 per cent in France and Germany,” he said. “The approach of most of the countries in the OECD is to tax businesses on their profitability and to help businesses with investment, but business rates is a tax on any investment I make in my stores.”

Mr Lewis, who is in the middle of implementing a turnaround at Tesco, said in 2015 that retailers faced a “lethal cocktail” of rising taxes and costs at a time of falling profits. Yesterday he said that distress on the high street, where House of Fraser recently failed, showed his prediction was coming true.

Although the Treasury has made some revisions to business rates to ease pressure, Mr Lewis said that it had tinkered around the edges, despite the fact that British retailers made a huge contribution to the economy by generating employment and wider consumer spending, particularly in rural areas “where there might not be much else going on”. A recent study by KPMG estimated Tesco that contributed £37.3 billion in gross value added to the economy, a third of the construction sector’s total GVA in 2016.

There are growing calls for a tax on sales generated by online-only retailers. Mr Lewis said that if retailers were struggling to pay rates because their sales had fallen, “you need to look at where those sales have gone and if they are being taxed in the same way”. He said that a tax on online sales without a reform of business rates would result in a “double whammy” for retailers with stores and online divisions.”

Source: The Times (pay wall)

Our LEP asked businesses about Brexit – probably not happy with answers

From the blog of East Devon Alliance DCC Councillor Martin Shaw (Seaton and Colyton):

“The Heart of the South West Local Economic Partnership (LEP) has belatedly published a report (dated May 2018) on local businesses’ views of Brexit.
This table shows answers to the question, ‘What is your overall assessment at this stage of the likely impact of Brexit on your business?’

POSITIVE (1)
NEGATIVE (9)
Neutral (7)
Mixed (6)
Don’t know (6)

The LEP summarises this table as ‘Businesses’ assessment of the overall impact of Brexit at this stage is quite varied.‘

VARIED? ONE BUSINESS OUT OF 29 THINKS ITS IMPACT WILL BE POSITIVE, COMPARED TO 9 WHO THINK NEGATIVE, AND THAT IS VARIED?

Other findings:

two-thirds of businesses have done no formal planning for Brexit

uncertainty is a big concern

the biggest specific concerns are about are changes to regulatory alignment [i.e. departure from the Single Market] and the speed of customs arrangements [i.e. departure from the Customs Union]

only 1 out of 29 expects it to be positive for their sector; 9 out of 29 expect it to be negative (the rest expect it to be ‘neutral’ or ‘mixed’, or don’t know)

This report (How firms across HotSW are preparing for Brexit, Report to HotSW LEP, Devon County Council and Partners) was prepared in March and April 2018, drawing on interviews conducted in February and March 2018, so it is already seriously out of date.

In the spring, businesses could reasonably have hoped for a deal:

What do businesses think now that May’s government has caved in to Rees-Mogg and ditched plans for a customs union with the EU?

What do they think of the ‘no deal’ scenario?

How are they going to cope if they still haven’t done the formal planning?
It isn’t difficult to guess. And why has this report been so delayed? Why wasn’t it reported earlier to DCC?”

Local Economic Partnership massages local businesses’ anxieties about Brexit: just 1 business out of 29 surveyed thought it would have a ‘positive’ impact, 9 said negative, many were worried – but that is just a ‘quite varied’ assessment according to the LEP!

“Companies got just £21million relief from business rates this year as councils are urged to do more to help ailing high streets”

Owl says: You want to see a conflict of interest in action? Here’s one. Should a council agree to business rate reductions to save their high streets and see their own revenue fall – or should they let the shops die to preserve their income? (Empty shops usually get 3 months free of business rates then have to recommence them even if the shop remains empty).

“Councils are failing to use their powers to cut business rates and help struggling local shops survive.

Local authorities can reduce rates if it is felt necessary to rejuvenate town centres, using rules under the 2011 Localism Act.

But analysis by the Altus Group consultancy reveals that this almost never happens. There were only £21million of reductions in this financial year – or 0.08 per cent of the predicted total £24.8billlion rates bill in England.

Although business rates are set by an independent government body, half the tax raised goes to councils.

Critics warned that their short-term focus on raking in money could end up destroying town centres weighed down by huge tax burdens.

The 50 per cent of rates that councils keep is meant to come with a more responsible attitude to businesses, with authorities cutting taxes where necessary to help firms.

But instead of going down, rates are constantly ratcheted up. Department stores have been hit with an average increase of nearly £151,000, or 27 per cent, in the past two years, while small shops have seen average rates climb 9 per cent to £9,623.

Sam Dumitriu, of the Adam Smith Institute, a think-tank, said: ‘Councils would rather prioritise their chief executives’ salaries over lessening the burden on businesses. There needs to be quite radical reform of rates to support businesses.’

Mike Cherry, chairman of the Federation of Small Businesses, said: ‘Local authorities must get to grips with the dire situation currently sweeping the high street and start backing hard-working retailers being hit hard by crippling rates bills.’

Robert Hayton, head of business rates at Altus, said: ‘Despite the ongoing crisis engulfing our high streets, this year councils in England are planning just £21million in additional help.

‘Given the stream of collapses across the retail and hospitality sectors since the turn of the year – and with many others teetering on the brink – councils could take decisive action now.’

The Daily Mail’s Save Our High Streets campaign is calling for business rates to be reformed, car parking charges to be slashed and huge foreign technology companies such as Amazon to be fairly taxed.

Around 50,000 retail staff have lost their jobs this year and almost 61,000 stores closed between 2012 and 2017 as internet retailers ruthlessly out-compete traditional bricks and mortar companies.

The Local Government Association, which represents councils, said: ‘Councils do what they can to help small businesses and local economies.

‘This is increasingly difficult, with local government in England facing an overall funding gap that will reach almost £8billion by 2025 and growing demand for services.’ “

http://www.dailymail.co.uk/news/article-5927309/Companies-got-just-21million-relief-business-rates-year.html

“PARK AND THRIVE Councils urged to slash parking fees to £1 in a bid to rescue failing town centres”

“GREEDY councils were last night urged to slash high street parking rates to a token £1 to stop town centres turning into “ghost towns”.

A retail veteran said town halls should introduce the nominal charge for the first two hours of parking in a radical 25-point plan to revive the retail sector.

The charging regime could be backed by Government legislation.

Bill Grimsey – ex boss of Wickes and Iceland – also demanded the “broken” business rate regime be scrapped altogether as he blamed the eye-watering tax for the biggest wave of shop job losses since the credit crisis.

He called for business rates to be replaced by a 2 per cent sales tax that would cover “bricks and mortar” chains such as Tesco as well as online giants such as Amazon.

And he called for Theresa May to create a new Town Centre Commission to develop a 20-year strategy.

He said: “The first six months of 2018 have seen the highest rate of retail closures, administrations for more than a decade and there is no sign of a slowdown.

“Our cities, towns and communities are facing their greatest challenge in history, which is how to remain relevant, and economically and socially viable in the 21st century.”

Speaking at the Local Government Association today, the retail veteran will say the days of shops ‘anchoring’ high streets were now gone as shopping habits change.

And he called on Government to change planning laws to bring in more housing and offices.

Libraries and public spaces should be at the heart of each community, Mr Grimsey said. He added that the vacancy rate – or proportion of empty shops – in towns such as Morecambe was now 30 per cent.

Councils trousered a whopping £820 million-worth of profit from parking and fines in 2016-2017.

The Local Government Association claims the so-called parking charge surplus is spent on “essential transport projects”. But a report in April ranked Britain’s roads 27th worst in the world – below Chile, Cyprus and Oman.

Under Mr Grimsey’s plans, councils would charge a nominal £1 for the first two hours of parking in town centres – while introducing 30 minutes free parking in high streets.”

https://www.thesun.co.uk/news/6689229/council-bid-slash-parking-fees-town-centres/

Only in the Sunday Times …

… would you find an article with the headline:

“Small businesses at risk from house price fall”

about small business owners using their homes as collateral.

Might a headline in the Daily Mirror read:

“Small business owners forced to use houses as collateral as big banks fleece them with high interest rates and government fleeces them with high business rates”!

“Staircase tax” WILL apply to business rates despite government promise to drop it

Owl says: so nos small businesses will get their own version of the council house “bedtoom tax” …

“Housing minister Dominic Raab has confirmed a government u-turn on a budget promise to compensate councils for the new “staircase tax” resulting from a 2015 Supreme Court ruling on business rates.

In last year’s budget, chancellor Philip Hammond announced that businesses would be able to claim a rebate on bills based on the way they were calculated before the ruling – backdated to 2010.

However, speaking in the House of Commons this week, Raab said that the government no longer intended to honour this promise.

“I do not think it would be right to compensate local authorities for what would effectively be an inadvertent windfall resulting from a judicial determination,” said Raab. “From the point of view of government policy, that was not something we wanted to see, and we have moved as swiftly and reasonably as we can to correct this.”

The Supreme Court ruling reversed more than 50 years of practice that businesses operating in separate units, or rooms, accessed from a connecting staircase received a single rates bill.

Following the judgement, the Valuation Office Agency has changed its practice to issue separate bills for each floor — with businesses able to claim a rebate back to 2010.

This means that some rates payers previously eligible for small business rates relief have lost some, or all, of their relief.

In addition, rateable value per square metre is sometimes lower for large properties due to landlords offering discounts to fill space.

Raab said that only a small number of businesses — fewer than 1,000 — are affected adversely by the change.

Raab made his announcement on Monday, during a debate on the tax, held during the second reading of the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill.

Also speaking in the debate, Clive Betts, chairman of the housing, communities and local government select committee, said: “We accept that the legislation takes the position back to what people thought it was before the court decision.

“In the meantime, however, we have had the court decision and local authorities will have done their estimates based on that decision, so the government are effectively changing local authorities’ financial positions from what they thought they would be a few months ago.”

Raab said that local authorities had been informed of the change of direction “as soon as was reasonably possible”.

In a briefing criticising the u-turn, the Local Government Association said: “It is disappointing that the government has reversed their autumn budget decision on the financial implications of this measure, and has indicated that no compensation will be payable to local government.

“We support the housing, communities and local government committee’s recommendation that the government needs to reassure councils that they are not going to be worse off financially because of this legislation, and that the government should bear the associated costs as a result of the reforms.”

http://www.room151.co.uk/funding/government-u-turns-on-staircase-tax/

“Business rates hardship fund proves ‘false hope’ after more than £70m delayed”

A relief fund worth £300m set up by Philip Hammond, the Chancellor, to support small firms struggling under the weight of business rates rises has proved a “false hope” after failing to pass on tens of millions of pounds 300 days after its launch.

Research by Gerald Eve, the property consultancy, has found that more than £70m of the £175m allocated to councils for the year to March 2018 has yet to be passed on to local firms.

The Federation of Small Businesses said some of its members were still waiting for the essential funding.

“Our research showed that one in five firms facing business rates hikes were planning to sell, hand-on or close their business,” said Mike Cherry, the chairman. “The Chancellor’s £300m hardship fund offered a small glimmer of hope. For many, it’s proved to be false hope.” …

http://www.telegraph.co.uk/business/2018/01/29/business-rates-hardship-fund-proves-false-hope-70m-delayed/

EDDC councillor desperately tries to justify expansion of Greendale and Hill Barton – going against Village Built Up Area requirements

Owl says: what a lot of help Greendale and Hill Barton are getting from (some) EDDC councillors! Hurriedly arranged meetings, a desperate race to find loopholes to allow expansion and now this. Is it a personal comment? Well, an awful lot of “we” in there!!! And quoting 2012 consultant’s views in 2018 – astonishing! AND playing down their own industrial sites (too big for small businesses) – REALLY!

“Mike Allen comment to Inspector on Hill Barton and Greendale issues

(The Lead Councillor for Business and Employment in East Devon District Council (EDDC) and past Chair of the Local Plan Forum which developed the current EDDC Local Plan)

EDDC welcomes proposals for business investment and the creation of units for small and medium sized enterprises across the East Devon area subject to NPPF and Local Plan criteria.

We appreciate that cumulative development along the A3052 road corridor has the potential to negatively impact upon existing communities and infrastructure and the operations of existing businesses. The lack of objection from Highways England on a recent nearby planning application is significant Hill Barton (HB) and Greendale Business Park (GBP) are situated near recently approved (on appeal) Yeo Business Park. This determination is of direct material significance in considering further proposed development.

I will examine four main areas of consideration for Economic development in respect of this SPD for Business Parks:

1) It could be reasonably assumed that the Planning Inspector’s view that employment space proposals of a ‘relatively small-scale development that would provide jobs for local people’ would be applicable to the current plans for Business Parks in the area. It is similarly likely that this location would also be deemed a suitable location for small scale business units at appeal.

2) Greendale and Hill Barton Business Parks are larger scale and vitally important to the economic expansion of East Devon outside of the Science Park and Skypark areas.

3) The lack of residential neighbours means no loss of amenity.

4) There is clear demand for the facilities at Hill Barton and Greendale, without which business expansion would not be accommodated elsewhere. The medium quality, flexibility and appeal of the industrial storage space and units for larger growing businesses in the district is essential.

To be clear, we have no economic basis on which to challenge further development within the perimeters set in the Villages DPD.

5) EDDC’s Economic Development team have reviewed the Draft Villages Plan as well as the Sustainability Appraisal. Having also reviewed Strategy 27 and Policy E7 of the adopted Local Plan, in addition to material evidence in respect of employment land delivery below, I recommend that the Greendale (GD) and Hill Barton (HB) employment sites be removed from this Villages Development Plan.
Approval of this draft Villages DPD with GD and HB included will exacerbate the undersupply of employment premises we are already experiencing through non-delivery of our employment allocations in the adopted Local Plan.

The Council’s strategic drive is to prioritise the development of employment land in the west of the district. Any applicants are advised to examine the potential suitability of our Enterprise Zone sites (Inc. the Exeter Airport Business Park Expansion site; Cranbrook Town Centre; Skypark & Science Park), all of which benefit from infrastructure investment in excess of £25 million and include enhanced transport corridor infrastructure, rail stations and employment site infrastructure as well as being immediately adjacent to Exeter Airport and A30 and M5 junctions.

However, we are aware of some businesses feeding back a view that sites, such those examined above are aimed predominantly at the medium to large scale employers with scientific and professional or transport accommodation requirements in excess of 5,000 sq. ft. This can fail to meet the needs of many new and growing local medium sized manufacturing / B2 class businesses many of which would not be welcome in proximity to residential areas or on Science Parks.

In 2012 East Devon District Council Commissioned Professor Nigel Jump of Strategic Economics Ltd to carry out an independent assessment of the economic impact of the two strategic employment sites in East Devon. His conclusions were clear in that investment in these locations has unlocked valuable employment and economic growth in the district.

Moreover, these sites have the potential to make further economic net benefits (job creation, added GVA and inward investment) throughout challenging economic periods
to come. The report concludes that when social and environmental factors are considered, there remains a net positive impact of extended capacity at these sites which are yet to run their full course.

In light of this EDDC commissioned evidence, inclusion of Greendale and Hill Barton within the Villages DPD is unwarranted, contrary to the specialist advice we have commissioned and would cause demonstrable harm to the district.

These findings are echoed in 3 subsequent studies of demand for industrial and commercial space in East Devon which formed the overall economic element of the EDDC Local Plan which placed great weight on the sustainable balance of social, economic and environmental issues as the “Golden thread” which ran through the Local Plan and the NPPF

The proposals for the development of medium sized businesses of B2/B8 category fit well with a large number of B use premises enquires received by Economic Development in the last 2 years,

The filling out and redevelopment of Greendale and Hill Barton will complement the demand for larger B use provision and remain a welcome addition to the diverse mix of commercial accommodation required to facilitate indigenous business growth as well as the district’s ability to meet the needs of potential inward investors seeking to become established or grow their operations in East Devon.

Having recently reviewed B use premises demand across the district, the following updates can be cited: –

In Exmouth, B use accommodation at Liverton Business Park is in high demand. We have seen speculative build in this location with all but their final unit now let. They are unable to accommodate further demand

Across Clinton Devon Estate’s whole East Devon portfolio of commercial property; they have no other vacant B use premises available, representing a significant shortage of supply.

The Exeter and Heart of Devon Commercial Premises Register has received 43 separate enquiries for B1 Office accommodation in the District in the last 3 months

Greendale have received more than 80 B use premises enquiries in the last 12 months totalling more than 850,000 sq. ft.

Also, west of the Enterprise Zone, land is being brought forward for speculative development of small, flexible B use units.

Recently, as part of their Business Plan for the use of the Owen Building, Rolle Exmouth Ltd provided details of 59 separate businesses, social enterprises, individuals, groups/classes, education & training providers who have declared an interest in finding small SME commercial premises in Exmouth
Lastly, to curtail the provision of good jobs at Hill Barton and Greendale would be to consciously, selectively and actively undermine our stated (and adopted) Local Plan ambition of delivering one job per new dwelling. This target has not yet been realised, resulting in an unsustainable imbalance between the provision of new homes and new, quality jobs in East Devon.

We cannot continue to overlook this imbalance as our young teens and twenties leave to pursue careers elsewhere and the economically inactive grow as a proportion of our aging population.

We continue to receive inward investment enquires of differing scales and different employment use classes, including from the Dept. for International Trade (DIT, formerly UKTI).

These request a diverse mix of investment formats and much needed employment opportunities from outside the district. However, it is often difficult to identify suitable available employment premises.

Maintaining a diverse mix of development land and premises is key to securing these investments and associated local economic benefit.

The increased density of employment possible on Greendale and Hill Barton sites for B1/B2/B8 use is a clear benefit to our established local supply chains and producers/providers served by these developments.

Finally – I am concerned about an issue of prejudice: I believe that it would be prejudicial to the economic development of East Devon to consider the imposition of Strategy 7 (Greenfield) on Hill Barton on Greendale since the sites are clearly well used industrial sites which are in the right location for the type of businesses they serve.

The two sites have been afforded a specific exception in Policy E7 – ‘Extensions to
Existing Employment Sites’ of our adopted Local Plan (See Pg. 196 “This policy will not apply at Hill Barton and Greendale business Parks”). While for landscape and other reasons we might wish to limit the further expansion of the sites, I believe it would be prejudicial to single out these two sites rather than the 50 other smaller industrial sites for special treatment.

The criteria already laid down within the Local Plan are fully sufficient to control and promote the appropriate development on these sites.

Recommendation

I recommend that the Greendale (GBP) and Hill Barton (HB) employment sites be removed from this Villages Development Plan. I recommend that any application of strategy 7 within the perimeters already agreed should not occur but that other Planning Policies on Industrial Land development should be applied on the basis of equity and equality with other industrial sites in East Devon.

Approval of this draft Villages DPD with GD and HB included and subject to strategy 7 will exacerbate the undersupply of employment premises we are already experiencing through non-delivery of our employment allocations in the adopted Local Plan.”

LEP take note: productivity is going to be measured very differently from now on

Our LEP has an open meeting on its “productivity strategy” tomorrow at 11 am at

Regency Suite, Devon Hotel
Exeter EX2 8XU

https://eastdevonwatch.org/2017/11/18/lep-needs-help-on-productivity-strategy-public-meeting-21-november-11am-exeter/

However, it may find itself in some difficulty as the way productivity is measured will change drastically next month when, instead of measuring productivity only in large firms, for the first time 600,000 businesses employing less than 100 people will be included. Our LEP has not based its strategy on these new measurements.

The Office for National Statistics is overhauling the way in which it measures the UK economy by including vast amounts of VAT data from small firms for the first time.

Previously, GDP estimates have been generated from a survey of the turnover at 45,000 companies – including all of the country’s largest businesses.

From December, information from a third of the UK’s 1.8m VAT returns will also be added to turnover data and included in official GDP figures.

This will dramatically change how the country’s economic growth is measured, providing far more insight into specific industries and locations. The greater proportion of VAT returns will also encompass more small companies, which make up 98pc of UK businesses.

For instance, in past GDP estimates, sectors such as restaurants and pubs were reported on, but only at a high level of “food and beverage service activities” based on 172 monthly surveys and 28,000 tax returns.

Having access to much more data will allow for a detailed view on the performance of pubs, takeaways and restaurants in different parts of the country, the ONS said.

For this first new estimate, only VAT returns from small and medium firms with headcounts of 100 or fewer will be included. Surveys of large firms will continue to be part of the ONS’s data gathering and reporting.

While smaller firms account for most of UK businesses, they only constitute 20pc of the economy. That means the data gathered and analysed by the ONS will be more detailed, but the impact on the GDP headline figure might not be altered by its inclusion, as larger company responses have greater sway.

Economist John Hawksworth of PwC said that it would be good if the ONS published “GDP estimates with and without use of the new VAT data”, so users could clearly see the difference made by its inclusion.

“It should also allow a more timely and detailed breakdown of economic activity by industry sub-sector and region to be produced than is possible at present,” Mr Hawksworth said.

Nick Vaughan, chief economist for the ONS, said the process of incorporating the additional data would be gradual.

“We are phasing these data in gradually and will ramp up the number of VAT returns we use over the coming years,” he said. He added that the new approach should lessen the administrative burden on small firms of completing surveys and help cut costs at the ONS.”

http://www.telegraph.co.uk/business/2017/11/20/uk-use-small-firms-vat-returns-calculate-economic-growth/

Would you start a new small business these days?

“More than 56,000 small businesses in England will face steep tax rises next year, research indicates.

Business rate increases will total £152m in April, rates specialist CVS said, putting a heavier burden on firms already reeling from rising inflation.

The prediction follows a drop in retail sales last month as inflation hit its highest level in more than five years. “For many shops, this may be the last straw,” said Helen Dickinson, chief executive of British Retail Consortium. “Across the country, especially in economically deprived and vulnerable communities, the cost of failing to take action will likely be seen in yet more empty shops and gap-toothed High Streets,” she added.

CVS says its research shows that 37,364 small shops will see their business rates bills rise above inflation next April, with 30,198 small shops facing rises in their rates bills of between 10% and 14.99%.

Business rates are a property tax based on rental values. The rates increase annually, in line with September’s Retail Prices Index, a measure of inflation. The ONS this week said the RPI rate of inflation had reached 3.9%.

Meanwhile, the UK’s key inflation rate climbed to 3% in September, driven up by increases in transport and food prices. The pick-up in inflation raises the likelihood of an increase in interest rates – currently at 0.25% – in November, the first rise in a decade.

Tighter belts

“Brexit is driving inflation,” CVS chief executive Mark Rigby said, urging the chancellor to be “bold” in his November Budget and freeze inflationary rate rises in 2018. “Import prices have risen given the fall in the pound with prices rising faster than wages, causing households to tighten their belts on spending, especially on big ticket items,” he added.

The Treasury periodically changes the rateable value of business properties to reflect differences in the property market, a process known as revaluation. Under the latest revaluation, which came into effect on 1 April, “transitional relief means big increases to bills are phased in gradually over the five years of the tax regime,” according to CVS.

In March, the government announced £435m in support to firms facing the steepest increases in bills following the revaluation. The package, which came after £3.6bn in transitional relief, included capping the increase in bills of 16,000 small businesses to £50 a month this year.

‘Heads in the sand’

“We are delivering the biggest ever cut in business rates to businesses across the country,” a Treasury spokesperson said. “The almost £9bn package will see a third of all businesses pay no rates at all and will mean nearly a million companies will see their bills cut,” they added.

CVS says fewer than half of all councils in the country have revised business rate bills after the introduction of the relief package in the spring Budget. “Ministers mustn’t bury their heads in the sand,” BRC’s Ms Dickinson said. “In his Budget next month, the chancellor needs to get a grip on the matter and rule out a rise in business rates to help save shops, protect jobs, and preserve high streets.”

http://www.bbc.co.uk/news/business-41693417

EDDC seems to prefer income loss to seafront attractions

Owl has spotted a disclosure by EDDC in relation to a FOI on the loss of income and business rates on closed Exmouth seafront businesses:

https://www.whatdotheyknow.com/request/lost_council_income_from_queens#comment-80255

EDDC effectively admit that council rental income from those properties on Queens Drive, which they closed a while back, mean a loss at a rate of over £18,300 pa. On top of the rent, they will have lost an as yet unspecified amount of council business rates and beach hut hire income. Oh, and the area now looks derelict.

Though there were claims that the Fun Park site was needed in connection with works on phases 1 and 2, there are plans in existence (see on Save Exmouth Seafront Facebook page) which show no such need for access as yet to the Fun Park.

It seems clear that EDDC have done little or nothing about arrangements for ‘temporary attractions’ on the Fun park site next year – at least as far as the public can determine.

So, we know that already part of the seafront is looking run down and desolate, and is losing money into the bargain. Further, the case for getting rid of the Fun Park seems much more to do with EDDC taking offence at a long established family business having the sheer gall to take EDDC on in pursuit of that families legitimate rights, than allowing them to continue to provide a much-loved service to the community – including thousands of tourists.

No, rather EDDC take a chance that something “might” come up by way of temporary attractions if only it hopes hard enough.

And surely EDDC is breaking its own (well-honed) rules on confidentiality when it voluntarily gives information that one owner allegedly had an outstanding unpaid bill – again.

“Staircase tax” – could mean a 5,000% backdated increase in business rates

“Conservative MP Nicky Morgan is pushing the UK’s property tax agency to detail the impact of the so-called “staircase tax”, amid fears that firms could be forced to stomach a 5,000% hike in bills.

The Treasury Select Committee chairwoman has written to Valuation Office Agency (VOA) chief executive Melissa Tatton for details on how businesses may be hit by the contentious levy.

“At first sight, it seems unfair to tax businesses different depending solely on whether the staircases between their rooms are communal or private,” Morgan said in her letter.

… “It also seems particularly harsh for the increase in rates to be backdated, and I would be interested to know the VOA’s reason for backdating it.”

The staircase tax is the result of a Supreme Court ruling on the definition of a single business space.

It means offices covering multiple floors in a building will be billed separately if their corridors or staircases are communal, rather than private to the business.

And for businesses that have expanded, the decision to take on offices in the same building as existing premises, connected by communal space, could now prove more costly than they first realised or planned for.

Morgan has asked the VOA’s Tatton to explain the decision to backdate the tax to 2015 in England and 2010 in Wales, and to provide details on how many businesses will face a higher rates bill as a result.

She has also requested information on the average bill increase that businesses will face and whether any transitional relief will be made available.

The tax has faced cross-party criticism, not only from Morgan, but from Labour’s shadow business minister Chi Onwurah and Liberal Democrat leader Sir Vince Cable.

It comes amid a backlash from industry groups including the The Federation of Small Business (FSB), which has warned many small firms could be set for a substantial hike in their bills, the Press Association reported.

“This significant escalation of cross-party scrutiny of the staircase tax will be hugely welcomed by the thousands of firms set to be stung by this ridiculous levy,” FSB Chairman Mike Cherry, said.

“No small business should receive a sudden tax hike of 5,000% simply because a workspace has been separated, for years, by a communal area, stairway or lift.

“Some small business owners are discussing whether to knock holes in their walls or stick a staircase on the outside of their premises.”

It is the latest tax debacle to hit British business this year, having been left reeling after the Government’s contentious business rates review this year.

The revaluation, which came into force in March, updated rateable values to take into account property price changes over the last seven years.

Business rent and rates specialists CVS said UK companies are already facing a £4.5 billion increase in business rates over the next 5 years, even before the staircase tax is introduced.

Cherry has called on the Government to repeal the new levy.

“This is no way to run a tax system in the 20th century, let alone the 21st. Ministers have the power to provide relief, and they should do this urgently – to correct this defect in the UK tax system.”

It comes as Chancellor Philip Hammond prepares the first full Autumn Budget, expected to be presented to Parliament between late November to early December.”

http://www.huffingtonpost.co.uk/entry/nicky-morgan-staircase-tax_uk_59b3dfa0e4b0b5e531067ab3

“Lack of transparency threatens English devolution and LEPs, warn small firms

“Local bodies responsible for economic growth and business support across England need to become more accountable and transparent to gain full support from the country’s small firms, according to the Federation of Small Businesses (FSB). The call comes ahead of the 100-day anniversary this weekend of elections for six new Combined Authority mayors.

A previously unreleased FSB survey finds that the majority (70%) of small firms in England with an opinion on devolution support the principle of giving more powers to local leaders. Two thirds (64%) feel devolution deals are good for their individual businesses.

However, small firms are concerned about their ability to feed into devolution deal making. Only one in seven (15%) feel they have been consulted on the devolution process in their area. More than half (57%) feel they cannot contribute to ongoing decision-making and a similar proportion (53%) believe there are not means to hold locally elected leaders to account.

Mike Cherry, FSB National Chairman, said: “The success of devolution deals will hinge on effective collaboration between new and existing local leaders. Transparency is key. Combined Authorities must clearly demonstrate how they are promoting growth and establish channels through which they can be held accountable. No doubt they’ll be heeding the NAO’s warning about becoming ‘a curiosity of history’.

“With new devolution proposals in the pipeline, future deals must be established on the basis of need. What we can’t have is the political affiliations of negotiators playing any role in fresh agreements.

“It’s encouraging to see that our new mayors are already engaging with small businesses in some areas. A number have established business advisory groups, and we urge those that haven’t to follow suit, ensuring they bring together representatives from all sections of the business community.”

Small businesses also flag the need for greater accountability among Local Enterprise Partnerships (LEPs). Less than half (45%) of those with an opinion on the issue believe they are able to communicate directly with their local LEP.

More encouragingly, the majority (53%) believe their LEP represents the interests of their local business community, though only one in three (32%) feel LEPs represent the views of their individual firms.

Mike Cherry added: “LEPs do some great work across England and it’s crucial that they’re equipped to maintain their vital business support services beyond Brexit and play a key role in delivering an ambitious Industrial Strategy. That being said, reform is urgently needed.

“All LEPs are obliged to have a small business champion in place and that obligation needs to be met right across the country. Equally, the Government should produce comprehensive business data, including unregistered businesses, at a LEP level so Partnerships can tailor local growth strategies effectively.”

“LEPs need to be beyond reproach in terms of their governance, overall transparency and representativeness. They should be channels for economic growth and targeted business support, not old boys’ clubs.”

https://www.fsb.org.uk/media-centre/press-releases/lack-of-transparency-threatens-english-devolution-and-leps-warn-small-firms

A new business rates sting for small and medium businesses

“A Plymouth businessman has spoken out against the new “staircase tax” which has cost him thousands of pounds.

Peter Cuddehay, who owns a printing business and art gallery on Plymouth’s waterfront, said new tax rules, which treat different floors in the same building as separate premises, are unfair.

The changes, which affect up to 30,000 small firms, have hit him in the pocket and sabotaged his investment plans.

“It’s an iniquitous tax,” the 67-year-old business owner said. “Where is the fairness? I think it’s wrong.”

Mr Cuddehay has been stung by a Supreme Court ruling which allows the Valuation Office Agency, which recalculated business rates in 2017, to levy rates individually on offices on separate floors or corridors.

Previously they were treated as a single premises.

Some firms face rate hikes of up to £15,000 as a result of the new rules – which are backdated to 2015.

Mr Cuddehay said he has been forced to rip up his accounts for the past two years and start again.

His business operates over three floors, the top one only being a store, which has now been defined by HM Revenue & Customs (HMRC) as “two premises”.

Mr Cuddehay, who employs five people, previously qualified for business rates relief because the rental value of his property was less than £12,000.

But he now has to pay a back-dated bill of more than £5,000 – and will face tax bills in future when before he didn’t have to pay anything for being below the limit.

He faces prosecution if he doesn’t pay up, so he’s handed over the cash, but appealed and is awaiting a date for his hearing.

“It’s a joke. We must have been one of the first companies to have been hit by this,” he said. “A retrospective action is outrageous, I can’t believe they can get away with it.”

And it’s a double charge for Mr Cuddehay, a member of the Federation of Small Businesses as he now expects his Waterfront Business Improvement District levy charge, calculated on rateable value, to rise too.

“All our plans for investment have gone out of the window,” he said. “We’ll also have to go back to out landlord and maybe say we don’t need the top floor storage.”

Mr Cuddehay has now written to Sutton and Devonport MP Luke Pollard about his predicament.

Philip Hammond, the chancellor, is now under pressure from backbench MPs to address the changes and perhaps overrule them when he announces his Budget in autumn 2017.”

http://www.plymouthherald.co.uk/news/business/businessman-loses-thousands-because-new-376567

Community Business Fund

The £10 million Community Business Fund is open oJune until 5 July at 12 midday.

Grants between £50,000 and £300,000 are available to community businesses in England to help them progress towards self sufficiency. The £10 million Community Business Fund from Power to Change opened on 7 June and will close on 5 July 2017.

Community businesses are run by local people for local people. They can revive local assets, protect the services people rely on, and address local needs. There are many types of community business. What they all have in common is that they are inclusive and give decision making power to local people and that the profits they generate flow back into the community to deliver positive local impact.

You can find out more here:

http://www.powertochange.org.uk/funding/grants/community-business-fund/

Business rates: the judgment of Solomon as just who benefits is decided by councils

Can we trust EDDC to be fair? How will we know they if are being fair or unfair. Will they publish their criteria? Will they say why they benefit one business but not another? Will they publish details of appeals?

Trust – it’s all done on trust. Oh dear.

“The government appears to have performed a weekend U-turn on business rates and says a £300m relief fund to help small businesses worst hit by the shakeup is now available for councils to share out.

On Friday the Guardian was told by the Department for Communities and Local Government that although the consultation on how to distribute the money was complete it would require the approval of the new government – signalling a hiatus of several months until after the 8 June general election.

However, speaking in the House of Commons on Monday the communities secretary, Sajid Javid, insisted there would be “absolutely no delay because of the general election”. “It’s going ahead, exactly as planned. Councils are free to start using the scheme and helping local businesses.”

The business rates revaluation triggered a furious political row in February with the government coming under fire from its own MPs over the impact of the changes in their constituencies. Many of the affected businesses are in Conservative heartlands and the pressure saw the chancellor Philip Hammond announce a £435m relief package in the budget.

Half a million shopkeepers, pubs and restaurants saw their rates bills – the commercial equivalent of council tax – increase at the start of this month after a revaluation of property hit parts of the country where prices have surged.

For example, a property boom in the Suffolk coastal town of Southwold forced rateable values up by 152%, with some shop owners saying the resulting hike in their rates bill threatened the viability of their businesses.

Rachael Maskell, the Labour MP for York Central, described the situation created by the revaluation as “totally unfair” as although more small businesses were exempt from rates in her constituency others had seen their rateable value increase by 600%. “No one knows how the new relief funds will be distributed,” she said. “Total chaos.” …

It is now up to local councils, who receive funds quarterly, to decide the local businesses that need help. Local authorities have already been developing their schemes with London’s Haringey, for example, where the rates of most high street shops have increased by 20% to 30%, considering giving preference to small, medium and independent firms.”

https://www.theguardian.com/business/2017/apr/24/business-rates-relief-fund-sajid-javid-general-election