Business rates have become a hot topic for debate in Lancaster city centre over recent weeks.
Lancaster City Council said the charges are in need of “urgent wholesale reform”, while small businesses say that barely affordable business rates – coupled with the rise of internet shopping, one-stop shop supermarkets and parking prices – are having a serious negative impact on the high street.
A quick stroll around the city centre with a notepad and pen reveals quite a few gaps in Lancaster’s high street offering.
Old signage still adorns many of the now closed shop fronts, leaving memories of long gone or recently departed businesses.
I counted at least 20 empty units in Market Street, New Street, Cheapside and Slip Inn Lane alone before interviewing staff on their final day at BHS – the latest big high street casualty – on Monday August 8.
In Market Street, the heart of Lancaster, there are currently eight empty shop units – BHS, Greenwoods and MyLocal being the most recent major brands to close – with Ann Summers due to shut for good on Saturday.
Three units in a row lie vacant in New Street, with another two also shut down, while a significant unit on the corner of Penny Street and Common Garden Street has been empty for some time.
It’s not all doom and gloom however. New businesses are still springing up on a weekly basis, but some of these, sadly, don’t seem to last long.
Could clothing giant Primark be the answer to Lancaster’s flagging retail experience? Time will tell...
Some have blamed the crippling costs of opening and maintaining a physical presence in the high street, with business rates seemingly a major culprit – but are they really to blame?
Fishmonger Ron Shaw, 68, from Shoreway Fisheries in Marketgate Shopping Centre, said his family business is struggling week in week out and that rates are just too high for the city.
He said that when his shop flooded last year, he still had to pay £9,000 in rates and keep up his Business Improvement District (BID) payments, despite not operating from the shop.
He said: “The way all these shops are shutting down at the moment, the problem is the rates are too high. We pay £12,000 a year, and Marketgate charge £10,000 a year for service charges. Rent is £450-500 a week, So we’ve got to find £50,000 before we can make any money.
“One of the other major problems in Lancaster is parking and supermarkets are also having a huge effect.
“They’re prepared to lose money on certain things like fish just to get people in. All this will do is run businesses out of town. At this rate there won’t be any shops open and it needs addressing now. We’re struggling week in, week out. My son Damian is losing his rag with it. The city centre just seems to be being run down.
“Reduce the rates and you’ll get people coming in. I can get a shop in London for £6,000. Here in Lancaster you’re paying £12-13,000 a year.”
Business rates are charged on most non-domestic properties, like shops, offices, pubs, warehouses, factories and holiday rental homes or guest houses.
Local councils send out a business rates bill in February or March each year for the following tax year, but do not currently keep the money.
Business rates are worked out based on a property’s ‘rateable value’, an open market rental value on April 1 2008, based on an estimate by the Valuation Office Agency.
Revaluations – where the government adjusts the value of business rates to reflect changes in the property market – usually every five years.
The most recent revaluation came in England and Wales on 1 April 2010, based on rateable values from 1 April 2008.
The next revaluations will be in 2017 in England, Scotland and Wales.
Sam Jones, owner of Hustle nightclub in Spring Garden Street, said the council needed to be more flexible and do more to support businesses.
He said: “We pay £900 a year for the BID. I haven’t heard anything in the past year about how it is going to support nightlife. I’ve not been approached.
“Lancaster nightlife has changed compared to what it used to be. Elements and Mojo are boarded up. We’ve lost the Friary. Revolution has been closed for over a year. We’re not sure what’s happening with the bottom Wetherspoons.
“If you lose your nightclubs, you lose your taxis and your takeaways and end up with clubs and takeaways boarded up. Are Lancaster City Council bothered about that?
“We also pay a ridiculous amount of £3,000 business rates a month on top of rent and overheads. Even if my rates were reduced by a quarter I wouldn’t have to open later hours.
“There are a lot of empty shops. When Primark opens I hope we get a few more big shops coming here.
“Now BHS has gone that city centre space is open for a whole new brand to come in, but there needs to be the footfall there before anyone looks at it, and if the business rates are too high we won’t get the footfall in Lancaster because there won’t be shops there for people to use.”
Coun Janice Hanson, who has responsibility for economic regeneration and planning for Lancaster City Council said that despite the council taking action, the state of the economy nationally and government policy have a huge effect on the health of high streets.
She said: “The high street is at the heart of our communities and integral to our economic success, creating jobs and sustaining families.
“The city council wants to see them thrive and that’s why over the last four years we’ve invested heavily in making them more attractive places to visit. The Square Routes project in Lancaster, for example, saw more than £1m invested to strengthen the city centre’s position as a quality destination both for visitors and residents of the district.
“It’s important to remember, however, that although the city council can, and does, take some action, ultimately the state of the economy nationally and Government policy have a huge effect on the health of our high streets. Business rates, which are set by the Government, in particular are in need of urgent wholesale reform to encourage the growth of small and medium sized business that are the lifeblood of our economy.”
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