Many will know that in addition to my day job at Montagu Evans, I am privileged to hold the position of President of the Rating Surveyors’ Association (RSA) and write here on behalf of both organisations.
The retail, leisure and hospitality industries have – quite understandably – been at the forefront of government aid during the past year. The office sector has been affected as well though; so too have manufacturing, car parks and many other sectors.
But despite asking people to work from home where they can, and in effect requiring businesses to take on the burden of maintaining productivity and morale away from their usual bases, the government is expecting all office-based businesses to meet their rates bills in full. Only the smallest have been able to benefit from the initial government grant schemes.
This disruption is evidenced by the sheer number of businesses appealing their rates on the grounds of Material Change of Circumstance (MCC) – the highest in rating history.
The latest Check Challenge Appeal (CCA) figures reveal there were 281,710 Checks (the first stage of the appeals process) between April and December 2020, of which at least 70% are thought to be related to Covid-19 MCC. Since then, appeals have rocketed and the RSA – which represents 85% of those ratepayers with outstanding Covid 19 checks – estimates the number of outstanding checks is now around 400,000 and expected to increase further.
As these Checks move through to Challenge and Appeal, the RSA is expecting growing pressures on an already overburdened system, tying up millions of pounds at a time when this money should be put to use refloating businesses, rehiring staff, investing for growth and helping to get the economy moving. We estimate that £5 billion is at stake.
Given the pressures on the current appeals system, the most sensible thing to do would be to agree appropriate reductions at a sector-wide level for 2020/21 and to give effect to those reductions as quickly as possible. This approach would prevent potentially years of uncertainty while the VOA works through appeals one-by-one. It would also release funds to local authorities to help maintain essential services with greater speed.
And until the autumn, these sector-specific discussions were underway, with airports, advertising rights and car parks nearing conclusion while a plan to provide a significant reduction for businesses in the office sector was also tabled.
Since December, though, the VOA has, without explanation, refused to continue discussions.
We would urge them to come back to the table.
While this is a significant task and everyone is under pressure, protracted discussions and lengthy litigation are in no-one’s interest, and no new evidence is going to come to light that changes these this position.
Business need speed and certainty, and constructive dialogue is the quickest way to get there. These are unprecedented times and companies of all sizes and in all sectors need a system that serves their needs better.