Liverpool City Council has held talks with social enterprise Mello Mello after their application for discretionary business rate relief was turned down.
Following the biggest local government cuts in the country two years running, the city council has been forced to tighten up its eligibility criteria.
Because discretionary rate relief has a cost to the council, it is now being targeted at organisations that provide priority services, such as those for vulnerable adults and children.
Deputy Mayor Paul Brant met with Mello Mello earlier today to discuss their concerns, and they have now agreed to look at restructuring part of their business to become charitable. This would entitle them to Government funded, mandatory business rate relief on those particular parts of the organisation, reducing their liability.
Councillor Brant has also committed to working with organisations to help them manage the change, and is encouraging as them to become charities where possible – in order to take advantage of the benefits of mandatory business rate relief.
He said: “Liverpool is a huge champion of the arts and cultural sector and we invest £5 million of funding every year to creative organisations in the city.
“At the same time, we have had to make some extremely tough budget choices in order to save £141 million over the last two years, with over £50 million to be found over the next two years. This has meant difficult decisions over business rate relief, as we have looked to align applications with the priorities of the council. As a result, a very small number of organisations have lost out.
“I fully appreciate that this may be difficult for them and I have therefore asked the Director of Finance and Culture Liverpool to carry out a review and see if there is a different way in which we can help those organisations that we also grant fund. It is possible they too could apply for charitable status, which would entitle them to Government funded mandatory rate relief.
“Although we do not grant fund Mello Mello, I understand the majority of the business rates is in relation to the bar, and am mindful that there are other licensed premises in the area that do not get business rate relief. Given the competing pressures on the city council, we cannot afford to financially support this part of the business.
“However, the city council is committed to working with them to help them over the restructuring period, and wants to see the service they provide flourish.”
BUSINESS RATES FACTFILE
Liverpool City Council collects business rates on behalf of the Government
The rate is not set by councils, but by the Department for Communities and Local Government together with the Valuation Office which are Government departments
Councils are entitled to grant discretionary relief themselves, but part of the cost must be covered by the local authority
Registered charities are automatically entitled to 80 percent business rate relief, which is funded by the Government