City leaders have urged major retailers in Aberdeen to hand back millions of pounds in business rates relief to the council rather than the Scottish Government.
Earlier this month a string of stores – Asda, Tesco, Sainsbury’s, Morrisons and B&Q – announced they would return payments given to all businesses because of the Covid-19 pandemic.
Officers at Aberdeen City Council have calculated the sum due to be repaid in Aberdeen alone stands at more than £9 million.
Under current rules, the money would be paid back to central governments rather than councils.
However, local authority leaders have written to the stores and Holyrood ministers asking if the funds can be redirected to the Town House – and claim it could be used to support other struggling businesses in Aberdeen.
Jenny Laing, the co-leader of the council, said: “Now that supermarkets and other retailers have committed to repaying the business rate relief they received from the UK and Scottish Government we intend to write to the Scottish Government and the retailers concerned to request that they repay the money direct to the city council rather than central government.
“Our officials have calculated that there is £9.1m of business rate relief to be repaid from retailers based in the city and we believe it would be hugely beneficial to Aberdeen if theses business rates could be retained by the council and fully utilised to support other business in the city which have been detrimentally impacted by Covid-19.”
The council leaders’ position is they are better-placed than government ministers to redirect the money to where it is most needed.
Tesco chairman John Allan said the chain would repay its business rates relief as it is “financially strong enough” to do so, while Asda chief executive and president Roger Burnley said the effect of the pandemic “will be much more long-lasting” for other industries and businesses.
Retail bosses have pledged to work with governments in each of the four UK nations to assess how the money can be best put to use.
The Scottish Retail Consortium (SRC), which represents many of the country’s biggest retailers, suggested the returned cash could be used to extend rates relief into the next financial year, or be invested in schemes to entice customers.
Responding to the council’s position on behalf of the retailers, Ewan MacDonald-Russell, SRC’s head of policy, said: “The unexpected fiscal windfall derived from some essential retailers repaying business rates relief should be redistributed within Scotland’s retail industry.
“These funds could help government to provide early clarity over continued rates relief for the coming year, and a short term stimulus to boost consumer confidence and spending – perhaps through a high street voucher scheme like Northern Ireland is implementing.
“Pandemic-induced restrictions and economic downturn are weighing on consumer demand, and a high street voucher scheme could help get the economy moving again and give a much needed shot in the arm to shops and other consumer-facing firms like eateries in the leaner months early in the New Year.”
The cost to councils of the rates relief scheme has already been reimbursed by the Scottish Government.
A Holyrood spokesman said: “We commend the retailers which have committed to reimburse the public finances for the support received through rates relief. Every penny provided to us will be invested in our recovery from Covid-19 and will be used to support those who have been hardest hit by the pandemic. The Scottish Government has already fully funded councils for the cost of the relief.
“We are clear that any revenues voluntarily paid by ratepayers in Scotland should remain in Scotland and not be withheld by UK Government or councils.”