How business rates impact upon high street performance – the evidence

by Cathy Parker*

There is an ongoing talk about the re-evaluation of business rates, and several high profile reports (e.g. the Grimsey Review 2013) call for drastic measures in the business rates system before it is ‘too late’ for the high street.

The University of Liverpool and Local Data Company are investigating factors that affect business rates (occupation, vacancy rates and rents ) and their preliminary analysis highlighted the disproportions in rents, vacancy rates and business rates – meaning some high streets are suffering more than others.

A CLG (2011) report presented a government plan that allows local authorities to retain a part of the income generated by business rates to reinvest in their own economic development priorities .

However, De Magalhaes’s (2012) highlights the problem with redistribution of business rates to local authorities, which still does not guarantee money will be spent in-line with a particular place’s priorities.

This is in contrast to the surtax generated by Business Improvement Districts, which is always re-invested locally, according to priorities set by the BIDs’ members.

Secondary shopping areas seem to suffer the most from the business rates system, and this was recognised in a scoping paper by Tym et al. (2000) who called for business rates revisions in these areas.

Also, Findlay & Sparks (2009) raised their concerns about business rates and argued whether they are well matched with the buying power of users and types of retailer present in a location.

In our research, business rates came out the 32nd strongest influence on high street performance, out of 200 factors, on a equal pegging with rents.

We will be presenting the order of influence of all 200 factors we investigated at the free High Street 2020 conference in Manchester on 10th July 2014.

Please click here to register.

References:

CLG. (2011). Local Government Resource Review: Proposals for Business Rates Retention – Consultation, (July).

De Magalhaes, C., & De Magalhães, C. (2012). Business Improvement Districts and the recession: Implications for public realm governance and management in England. Progress in Planning, 77(4), 143–177. Retrieved fromhttp://www.sciencedirect.com/science/article/pii/S0305900612000372

Findlay, A., & Sparks, L. (2009). Literature Review: Policies Adopted to Support A Healthy Retail Sector and Retail Led Regeneration and the Impact of Retail on the Regeneration of Town Centres and Local High Streets. Scottish Government. Retrieved April 29, 2014, fromhttp://www.scotland.gov.uk/Resource/Doc/256980/0076301.pdf

Grimsey, B, 2013, The Grimsey Review.

Tym, R. (2000). Secondary Shopping: Retail Capacity and Need —A Scoping Paper. National Retail Planning Forum, (June 9).

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*This article was reblogged from Prof. Cathy Parker’s blog