Colliers despair at slowness and inefficiency of the system that promised to alleviate troubled businesses impacted by COVID-19.
Thousands of businesses promised business rates relief through the £1.5 billion COVID-19 Additional Relief Fund (CARF) are still waiting to receive support despite government promises over a year ago - as distribution of the fund continues to descend into a post code lottery.
According to latest figures just revealed by the government, to the end of June 2022 only £419.3 million (or 28%) of the £1.5 billion fund announced in March 2021 has actually been allocated to businesses, with only 82,573 hereditaments (properties) awarded relief across England.
Of this £420 million, £144.7 million has been distributed to businesses in the offices sector, £112.4 million to those in factories/industrial and £94 million for warehousing, storage and distribution.
The CARF scheme was announced in March 2021 following the government’s unprecedented step in announcing that businesses impacted by COVID-19 would not be able to appeal their business rates on grounds of a Material Change of Circumstance (MCC) - a move that was lambasted by the rating profession at the time and put paid to the hopes of hundreds of thousands of businesses who had started the appeals process against their rates bills, on the grounds of the impact the pandemic had had on their businesses.
Instead, the new £1.5 billion relief fund was announced to be for those businesses affected by COVID-19, outside the retail, hospitality and leisure sectors, and would be distributed by Local Authorities to “get cash to affected businesses in the most proportionate and equitable way”.
According to Colliers and others, this new fund vastly under-estimated both the size of the problem and the capability of local authorities to pay out in an efficient and consistent way.
Indeed, the system continues to be mired in bureaucracy and delay, primarily according to Colliers Head of Rating John Webber because the government allowed local authorities discretion to allocate funds as they saw fit rather than provide a standard guidance for allocation and distribution. This created “carnage” and a “postcode lottery”.
Webber points out that the system has been particularly difficult for any business with multiple sites, having to manage multiple schemes each with its own criteria, exclusions, varying evidence and information requests and deadline.
The latest figures: just published, reveal that whilst 258 local schemes have now been approved, as of end June 2022 only 167 of those local authorities had made any awards at all, that is just 54% of the 309 billing authorities in England.
In terms of individual local authorities, the biggest distributor by far as of end June 2022 was Westminster Council paying out £77.5 million to local businesses, followed by Manchester £10.36 million, Bradford £9.9 million, and Ealing £9.45 million.
However, many local authorities have still not released their schemes or are in the middle of complex and lengthy application processes. Local authorities across England, including Barrow in Furness, Dudley, Kensington & Chelsea, Mansfield, Cornwall, Nottingham and Reading - to name but a few - still do not have their schemes approved or launched on their website.
And according to John Webber, “And of those the 169 LAs who do have an application process, a good number have not spent their allocation, since their application processes were either too complicated, restrictive or not well publicised enough and they are now either looking to re-launch their schemes, introduce additional application rounds or to identify and award relief to recipients based on the business rates data they hold.”
He concludes, “The picture is a disgrace. Fifteen months on from the time businesses were denied their right to appeal their business rates, less than one third of the allotted £1.5 billion has been allocated to such businesses.
“And time marches on. Because this relief is classed as discretionary relief, the deadline for awarding it is 30th September 2022. So, there is still an awful lot of work for many local authorities to do if businesses are not to miss out. It is a nightmare for all concerned- from local authorities to ratepayers and those who manage on their behalf.”