The Federation of Small Businesses says that the burden of rising rates bills and ever-increasing rents, coupled with soaring employment costs and pressure from online retailers and out of town shopping centres, are creating a perfect storm in town centres.
The FSB has set out new recommendations in five key areas, which it says should be targeted by policymakers to provide an urgent lifeline for the sector in England:
- Create fairer business rates bills for high streets and beyond;
- Build an easy and simple system for businesses to appeal rates bills;
- Abolish the rate relief rule that penalises small business expansion into additional premises;
- Create more free parking and invest in the maintenance of local road networks, which support local high streets and their customers;
- Put in place measures to safeguard access to cash and banking services.
Michael Weedon, locally-based retail expert and chair of the FSB’s Retail Policy Unit, said: “From our research and speaking with members across the local county, it’s clear the pressure is mounting in our local high streets and town centres.
“Spiralling business rates and ever-increasing rents are piling on to small retailers, hospitality businesses and others on the high street. The high town centre parking costs, poor infrastructure, the blight of potholes and the loss of vital banking services are also ramping up the pressure.
- Pictured: Michael Weedon.
“We know that small business owners are resilient and are used to adapting to market forces. But we want to see government and local authorities come together to look at real solutions to these issues so that our high streets are not only able to survive but to thrive.”
The recommendations include a raft of interventions to the current outdated business rates system in England.
As well as a freeze on rates from April 2019, when the next inflation-linked rise is due, FSB is calling for a £1,000 business rates discount for local shops, cafes, restaurants and pubs, to provide a shot in the arm for high streets.
Government should also look to introduce a type of ‘London weighting’ to Small Business Rate Relief to help struggling firms by increasing thresholds for intensely pressured areas. The concept could also be expanded to other areas most affected by the last revaluation, and whose temporary relief is also now falling away, the FSB says.
It is also calling for the rates relief rule that penalises small business expanding into additional premises, to be abolished.
Current rules mean most small firms lose their existing SBRR when they move into a second property. The relief should be changed to a personal threshold for a business owner, so that it can apply to multiple properties owned by one business, below the combined value of £15,000.
Parking remains a huge issue for high streets. High parking charges and a lack of spaces often put off shoppers from visiting town centres, instead favouring out of town centres with free parking. Local authorities must provide more free parking to encourage shoppers back to the high street all year round, making sure any proposed increases to charges are assessed for their impact on town centres.
Other factors at play include cuts to cash machine funding and the loss of thousands of bank branches, impacting on high street footfall all over the country. FSB is calling for the Post Office network to be protected, with every branch providing a reliable, efficient and standardised core of business services.
Mr Weedon said: “Over the long term, a serious look is needed to overhaul the unfair, regressive business rates tax that hits firms before they’ve had the chance to make their first pound of turnover, let alone profit.
“As the Budget approaches, the Chancellor must provide targeted support to those businesses struggling to keep their heads above water in the face of rates rises.
“With transitional rate relief now winding down, it’s vital that businesses are given the right support, in the form of a rates freeze from April 2019 and a discount for local shops, pubs and eateries.”
Investing in the road network, fixing potholes quickly and providing more town centre free parking would make a real difference to small firms, he added.
“We’re not suggesting there’s a quick fix for the high street, but it’s clear something needs to be done. We’re calling on the government to take control of the situation and, working with local authorities, take the pressure off struggling high street businesses."
Other recommendations include:
- A full market review of access to cash and digital payment methods by government and the Payment Systems Regulator;
- Create a dedicated business rates appeals route for small businesses focusing on speed and compliance, avoiding charges and penalties;
- Increase funding for local road maintenance, fairer distribution of government cash on major road network projects and improved local transport ensuring routes into town centres are in a good state of repair for both businesses and consumers.