George Osborne will tomorrow lay out his plans in the Autumn Statement. Business rates are high on the list of things the property sector expects to be talked about. Ahead of that Kevin Muldoon-Smith and Dr Paul Greenhalgh consider how the recent business rates announcements will affect the commercial property sector
A recent flood of announcements concerning the devolution of government powers to local areas signals the greatest transfer of power from Whitehall in a generation. Devolution, growth and city deals are now the order of the day, while the Northern Powerhouse and Devo Manc have been welcomed as a revolution in devolution for local authority working. These changes in the way government is organised have been broadly welcomed by civic leaders and commentators alike as an opportunity for local areas to exert control over their destiny and stand on their own two feet.
So far, there has been very little debate surrounding what these changes mean for the commercial property sector. This deficit is particularly notable with respect to the chancellor’s announcement, at the Conservative Party Conference 2015, of the full localisation of business rates. The statement took many by surprise (the SNP quickly announced similar proposals in Scotland) and initially received considerable attention. After a brief spike in media coverage, interest in the matter has subsequently dwindled to a disappointing level.
Make no mistake, following devolution, local business rates, and by extension the performance and potential growth of local commercial real estate markets, will become a central concern not only for local authority financial planning and investment but the wider business sector and local electorate.
The reality of the situation is difficult to fathom at the time of writing, ahead of the impending public spending review. However, what is positive is the recent exposure of this traditionally esoteric issue and the opportunity for debate. This article reflects on some of the uncertainties, assumptions and ambiguities in the recent business rates announcements and the potential challenges and opportunities for public service provision and the commercial property sector.
Click here to read the full article from this week’s magazine.
