A small retailer in Tunbridge Wells who faced an ‘uphill battle’ to stay open is urging central government to fast-track moves to devolve business rates to councils or risk towns losing their identities.
The call for action comes after the council previously said it would press for extra powers to ‘make more decisions concerning business rates locally’ adding: “This would include the ability to vary reliefs and premiums to encourage the right composition and support the high street whilst nurturing new businesses.”
However, recent decisions by central government mean even when rates are finally dissolved by the end of the Parliament as planned, the council could still find it lacks the resources for flexible rates.
Flamingo Trends, an independent fashion boutique, operated out of Ely Court for 18 months before being forced to relocate to Mayfield, a move which cut its overheads by 75 per cent.
Despite receiving ‘wonderful support’ from Royal Victoria Place, their former landlords, the boutique was no longer able to operate in the town once its business rate relief expired.
Co-founder Louise Kierstenson said: “The team at the centre did their best to be accommodating but their hands were tied and we tried to survive in town as long as we could.
“Our rates were over £1,200 per month, which for a two-person company was unsustainable. Neither of us have even taken a salary since we started.
“As a small independent we were entitled to concessions on the rate when we first set up, but once these expired you go full whack and it just was not realistic.”
Their relocation in December coincided with the decision by central government to raid the share of business rates, just 4p in the pound, retained by Tunbridge Wells Borough Council to fund less well-run authorities.
This could have an adverse impact on the council’s ability to tailor rates to the town’s needs, especially as it is now looking at the prospect of handing £600,000 a year back to central government by 2020.
However, the situation looks set to worsen for the high street after a survey by Colliers International, also released in December, predicted rates in Tunbridge Wells would go up 17.4 per cent at the next evaluation in 2017.
Mrs Kierstenson added: “The crazy thing is when we made the decision to move, we looked at other locations before settling on Mayfield and found the business rates at Blue Water were roughly the same as in Tunbridge Wells.
“That is despite a much higher footfall in Blue Water. It just makes you think how unbalanced the system is.”
However, Mrs Kierstenson said she did not blame the council for the situation as she recognised their inability to make business rates more flexible for the town.
She added: “When the rates are set by central government they are not taking into account the diverse nature of Tunbridge Wells.
“There is a misconception the town consists of a certain type of person, but it is silly to think it is just made up of yummy mummies and commuters who all earn a lot of money.
“There are many independents in the town who cater to a range of people and it would be so sad to see more empty shops.”
Federation of Small Business Chairman Bill Fox says:
“Small firms face a challenging start to 2016. Measures to devolve powers over business rates to local authorities provide opportunities but also risks for small businesses. We look forward to engaging with the Government on this agenda. But also we urge the Government to deliver on its commitment to fundamental reform of the wider business rates system.
“Small businesses really need total reform of the business rates system. Business rates are the biggest cost for most small firms after rent and staff and pushes many businesses to the brink. What we currently have is a system that takes no account of ability to pay, or changes to economic conditions. The FSB wants to see a level playing field for all businesses and that means starting from scratch to devise a fairer system.”