Colliers calls for a ‘radically different’ approach to rates

Business rates experts at Colliers International are calling for a radically different approach from the Government and Valuation Office Agency (VOA) to cope with unprecedented volumes of business rates appeals. Latest figures released by the

Government on ‘Check Challenge Appeal’, the new business rates appeals process, show that the system – introduced in 2017 – is already in danger of collapsing under the weight of cases. The VOA’s figures show that in

England, in April, May and June, there were 145,000 of new checks - the first stage of the system process - registered. This is nearly the same as the

latest three-year figure, where 158,910 checks had been registered. The new figures effectively

double the total number of checks registered up to a massive 303,820, of which 69,480 are unresolved. The massive increase in the

number of appeals is because of an increasing number of companies are claiming a ‘material change of circumstance (MCC)’ as a result of the impact of Covid-19 on their businesses, John Webber, head of business rates at Colliers, explained. He said: “Covid-19 has led to the

John Webber: rates appeal ‘bloodbath’ has only just begun

biggest material change of circumstance (MCC) the country has seen in rating history and the system has been around for over 400 years. “You could say we are on a

wartime footing. Businesses are claiming MCC either as a result of the impact of the initial lockdown and/or on the impact to businesses as they have re-opened. “With social distancing and

consumer and worker fears about returning to the shops or offices to work, few businesses in the country

are operating on pre-Covid levels. There is no doubt that their circumstances have changed materially. “Footfall has reduced massively,

and many offices, shops and restaurants remain closed or on reduced capacity – these are all valid reasons to reduce the rating assessments.” Mr Webber says a radical

approach is needed: “If the VOA takes its time and waits for all the evidence to come in, many businesses will simply not be around by the time it decides what to do. “We urge for a collaborative

approach with the VOA getting together with the ratepayers and their agents as soon as possible to agree sensible and fair reductions across the board to those sectors most impacted. This will be essential if businesses are to plan ahead and hopefully work through this crisis. “With a delayed Revaluation until

2023, the VOA will hopefully now have more resource to dedicate to making sure CCA works as best as it can. We cannot leave things to chance – or we will see more closures and job losses. The bloodbath has only just begun.”

Selfridges Birmingham has launched a new sustainability initiative, in a bid to reduce carbon emissions within the retail sector. The department store’s ‘Project Earth’ campaign aims

to help customers change the way they shop in three ways: by addressing the materials used in products, launching and exploring new retail models such as repair and re-sell, and changing people’s mindsets.

Selfridges Birmingham launches sustainability initiative Alannah Weston, Selfridges Group chairman, said:

“For the last decade we have taken ground-breaking steps to put people and planet at the heart of our business, embedding sustainability alongside creativity. Project Earth is not only our bold, new commitment to stretching environmental targets, it is about imagining new ways to do business, within the next five years.”

Sector Focus

Retailers call for more support

‘Positive action’ is needed to help retail businesses meet rent demands as they continue to recover from the Covid-19 crisis, the British Independent Retailers Association (Bira) has said. It is backing the British

Retail Consortium's (BRC) proposals for a Property Bounceback Grant, after new research revealed independent retailers were concerned about paying their rent while trade struggled to return to pre-lockdown levels. Under the BRC’s proposals,

a Government grant scheme would be established to bridge the gap between what tenants can pay and what landlords can forego. According to the draft document, the grant would cover rent and service charges for properties in the retail, hospitality and leisure sectors that have been required to close by the Government. Andrew Goodacre, Bira's

CEO, said: “Many retailers need more support with rental payments if we are to avoid even more job losses and potential business failures. "The research shows that independent retailers have real concerns about future rental payments and the attitude of landlords. “It is clear that retailers

need ongoing support as they continue adjust their business to current trading conditions, which as we all know are not easy. We have seen some new proposals from the BRC regarding Government support for rental payments and Bira supports this initiative.”

Pick-up in retail sales - but caution remains

Retail sales volumes recorded a 3.6 per cent rise in July, as the sector benefited from a full month of non-essential retailers being allowed to open, according to the economic forecasting outfit EY Item Club. Volumes were up 1.4 per cent year-on-year in

July, the first annual gain since January. They were also 3.0 per cent above February’s level, said Item, whose sponsor is the financial services company EY, which has an office in Birmingham. Retail sales were helped in July by the opening

up of pubs, restaurants and hairdressers pushing up footfall. However, the opening of the hospitality sector

and other consumer service sectors may have diverted some consumer spending away from retail sales towards services. Online sales remain significantly higher than

they were before the pandemic. However, the opening of the retail sector has led to a fall back in online share of total sales from the record high seen in May, with a dip in volume in July. Consumer spending looks on course for a

substantial boom in the third quarter, after contracting by a record 23.1 per cent in the second quarter. The full opening up of the retail sector is

unleashing pent-up demand, while the opening up of the hospitality sector and other consumer services from early July is further fuelling consumer spending. Item believes that there will be growth of at

least 12 per cent in the third quarter, although there is considerable uncertainty whether this will be sustained, going forward. The EY Item Club suspects that the upside for

consumer spending will be constrained by cautious consumers, higher unemployment and limited pay. Any upsurge in Covid-19 cases could hit

consumer confidence as well. On the positive side, four months of repayment

of unsecured consumer debt totalling £15.7bn between March and June has improved many households’ balance sheets, which will help some consumers’ purchasing ability. Howard Archer, chief economic advisor to the

EY Item Club, said: “Retail sales clearly benefitted in July from a full month of non-essential retailers being allowed to open, pubs, restaurants and hairdressers, all pushing up footfall. “However, the opening up of the hospitality sector and other consumer service sectors may have diverted some consumer spending away from retail sales towards services.”

October 2020 CHAMBERLINK 59

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