This item was published during the term of a previous administration that ended in April 2007
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Economic measures for businesses
23/11/2005
A range of measures for businesses, aimed at bringing the rates poundage in Scotland in line with England by 2007, were announced in Parliament today.
The rate is currently 46.1p in Scotland and 41.5p in England. The rate in Scotland will be cut to 44.9p from April 1, 2006.
Finance and Public Service Reform Minister Tom McCabe also announced:
- The small business rates relief scheme - which benefits 72 per cent of businesses in Scotland - will continue and that the surcharge for bigger businesses has been reduced
- Offshore windfarms will be non-rateable, in line with England and Wales
- Rate relief for renewable power generator operators will be examined in 2006
The Executive's core funding to local authorities for 2006-07 and 2007-08 was also confirmed.
Mr McCabe said:
"Our top priority is growing the economy and creating an environment where all businesses - large and small - can thrive. We have underlined that commitment by pledging to bring our business rates poundage in line with England. This is the first step towards delivering fully on our pledge by April 2007.
"But the poundage is only one half of the business rates equation - on average, our rateable values are lower than England. I believe, therefore, that we are not only moving towards a level playing field, we are moving towards enjoying a competitive edge over the rest of the UK.
"There is further good news for businesses in this package of measures. I can announce that we are continuing the Small Business Rates Scheme to ensure more than 70 per cent of our businesses continue to receive a reduction of up to 50 per cent reduction in their business rates. And we have achieved this in spite of cutting the poundage rate payable by larger businesses which helps support this scheme from 0.45p in 2005-06 to 0.4p for 2006-07.
"I have also made a commitment to take statutory measures to make all offshore windfarms exempt from paying rates - before the first windfarm comes into operation. Renewable energy can make a big contribution to our economy, as well as help safeguard our environment from harmful emissions.
"This is why I will be seeking views in due course on possible rate relief for renewable power generator operators."
Confirming the 2006-07 and 2007-08 local government settlement, the Minister added:
"I believe our ability to compete in a rapidly-changing world is linked to our ability to provide world-class public services. That is why first-class public services are vital to our continued success.
"I can confirm that the total core funding through Aggregate External Finance for local authorities in 2006-07 is £8.3 billion. This means funding has increased by almost £2.6 billion over the past six years. By 2008, funding will have risen by around 55 per cent since 1999.
"For local communities, this means key services should be able to receive increased funding of more than £300 million next year and £540 million the following year.
"Whilst recognising these increases are lower relative to those we were able to provide in recent years, they must, of course, be considered in light of the wider context of our work to ensure the public sector is as efficient and effective as possible, notwithstanding some of the spending pressures local authorities are currently facing. Never before has it been so important for local authorities, as well as the wider public sector, to be innovative and rise to the challenge to bring long-term change in the way we deliver public services.
"Money and time can no longer be wasted on unnecessary bureaucracy or inefficiency. We need that time and money to be ploughed straight back into frontline services to ensure the people of Scotland enjoy better public services.
"I am prepared to consider the case for some further additional resources for local government 2007-08 - but only if local government shows significant progress towards the Efficient Government targets.
"I believe this - and other factors like aligning resources to priorities and ensuring income-generation is as efficient as possible - will allow local authorities to exert downward pressure on council tax levels.
"On these fronts, as well as on others, we will continue working with local authorities and the business community to achieve the first-class public services and thriving economy the people of Scotland deserve."