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Regeneration chief attacks Brown on Today programme

One of the government's most senior advisers on regeneration has told the BBC’s Today Programme of the chaotic effects taxing empty properties is having on regenerating the most deprived areas of Britain.

FOR MEDIA: Andrew Teacher, 07968 12 45 45, ateacher@bpf.org.uk
EMPTY RATES HOTLINE: info@emptyrates.com

John Nicholls, chairman of the government-funded urban regeneration companies (URCs) chief executives group, said this morning that owners are demolishing empty buildings to avoid paying the tax introduced in the most recent budget, leaving parts of the country "resembling bomb sites". Regeneration projects had been rendered unworkable, threatening jobs and new homes, he said. Some developers are simply leaving sites unfinished rather than risk liability for the tax.

The British Property Federation (BPF), has been leading a campaign against the tax, and is calling for those affect to use its hotline (info@emptyrates.com) so it can gather evidence of the effects.

Before the changes, vacant offices and shops received rate relief of 50% and industrial units gained full relief. Now all unused commercial property has to pay full business rates after a three-month period of grace for commercial premises and six months for industrial property and warehouses, adding about £1.3bn a year to government coffers.

The URCs warned privately of the potential adverse consequences of the reforms in May last year, but have now decided to take the campaign to ditch the tax public.

When asked what he hoped to achieve, Nicholls responded:

“First of all, to draw attention to the fact that this isn’t just a problem for the development and property industries, important though they are, it’s really impacting on the business of urban regeneration and also to point out that it’s not all about demolitions.

“This is starting to affect the supply of much needed new property and job-generating property in our urban areas.”

So developers are not building new properties because they’re worried they won’t get new tenants in and then face huge tax bills?

“That’s right. But also, when they’re assembling sites – which is often a long and painstaking business in urban areas – they might be liable for empty rates on the bits they’ve accumulated, so what they’re doing is to demolish those properties.”

It’s clear the government ignored your warning, what response did you get?

“We got a polite acknowledgement in fairly generalised terms; a fairly standard response.”

How typical is the case we had on the Today Programme earlier (click here to listen), of a developer in Sunderland demolishing an industrial building?

“It seems to be a growing pattern. There are URCs across the country – 20 of us – and some of my fellow chief executives in Bradford, Sunderland, Swindon, as well as here in Leicester, all report this sort of thing happening.

“Part of the problem is lack of clear figures about the effects, but given this brings in about £1bn Treasury isn’t going to change its mind based on anecdote. There needs to be some expansive exploration of what’s happening. It is really beginning to have an adverse impact on regeneration.”

An earlier Today Programme slot from 6.20am can be heard below. Additionally, John Nicholls was also interviewed on Radio5, which can also be heard below.