Agenda item

The purpose of this report is to set out a discretionary business rate relief policy to help stimulate commercial development on greenfield and brownfield sites in the district.

Members considered the Discretionary Policy to Stimulate Commercial Development Report presented by Councillor Benney.

·         Councillor Cornwell said he can see where this report is coming from and understands the intention but asked if we are not at risk of ending up with a situation similar to what happened in Chatteris, where buildings were developed but the Council had no income from them and one of our saving graces was that we were able to get business rates out of those properties, he is thinking particularly about Tesco. Councillor Benney responded that he could understand the question, but the risk is not the Council’s, this would be to the commercial markets to take that risk whether they build or not. If they do, we are currently getting nothing in terms of council rates on green or brownfield land but after this 12-month period we will then get the commercial rates back on that, or once that building is let to its first tenant. Councillor Cornwell thanked Councillor Benney.

·         Councillor Boden agreed the proposal is time limited, and in two ways. The first is that the grant will only be available for a maximum of 12 months or until the first occupation takes place but secondly it is also a 12-month pilot. This is because the Council wants to encourage more developers to build more speculatively primarily, but not exclusively, for small and micro businesses. There is a massive shortage of capacity within Fenland to provide this sort of accommodation which has led to businesses leaving Fenland because we cannot give them the accommodation they require. This provides the Economic Growth Team with an additional tool to encourage the necessary development to take place.

·         Councillor Yeulett stated that he welcomes this and anything that will provide an incentive for businesses to grow; after all it is better to get 5% of something rather than 5% of nothing. 

·         Councillor Booth said he should point out for the public record that he is an employee of the company that Councillor Cornwell mentioned but this is a forward-looking policy, so he does not believe he has to declare an interest only having recently joined them. To follow up on Councillor Boden’s point about time-limiting, there is not a time limit if looking at occupation by the first tenant because in theory that could go on for some time. It does have the deadline of 31^st March 2024 so he assumes it would be 2025 in theory, so is that correct? Councillor Benney said it would be from when the building is complete, i.e., 12 months from the date of building completion or from the first tenant moving in. Councillor Booth said he accepts this as long as that is clear and what people are intending.

·         Councillor Booth added that he welcomes this also, but it is a pity that there is not better information in the Financial Implications because it says there will be no financial implications, but if this policy works then it will generate more revenue for the Council. Also, it would have been good to get an idea of the number of enquiries the Council currently gets to give an idea, it is speculation, but it reinforces the reasons for it. Secondly, the Local Plan currently does not have designated sites. The Plan that is out for consultation currently does have designated sites.  He wondered if we need to make it clear about the difference between the two local plans.

·         Councillor Benney said in respect of the first point, it will have a positive effect after 12 months to bring this forward, but it is risk to the Council, currently it is negative cost to us. In terms of the local plan, yes there are different areas within the plan designated for industrial use but there is also the windfall policy and that would be down to Planning Committee to decide whether that was deemed policy compliant, so it would be down to FDC to set the environment. 

·         Councillor Booth said Councillor Benney was not here when the existing local plan was adopted many years ago when it was confirmed that the Council has no windfall policy in the current local plan. In the new local emerging plan we will have designated sites, the problem with the existing local plan is it is more policy-led and more down to individual interpretation.

·         Councillor Mason asked if there is anything in the policy that prevents a tenant moving in for 12 months on favourable terms and then moving out and into another property on favourable terms. Councillor Benney responded that if a tenant moves in it is the landlord who gets the benefit rather than the tenant and if they build a second industrial unit, that policy will still apply. Councillor Mason said that seemed like the Council would not benefit. Councillor Boden explained that what is being proposed is the postponement of the start of a liability for payment of NNDR; once that postponement has finished, either at the cessation of the 12-month period or a tenant moves in, then from then onwards the property will be subject to NNDR. The tenant will be almost irrelevant in this because it is not they who will be benefitting from the policy, it will be the developer of the property who would otherwise have a liability as soon as the property is completed to a certain stage. If the tenant moves out, there is still the liability for NNDR, but it would just pass to the property owner, so there is no additional potential liability to the Council.

·         Councillor Connor said this is an excellent report and what is not to like about it. Hopefully it will bring more prosperity to Fenland.

Proposed by Councillor Benney, seconded by Councillor Boden and Council AGREED to adopt the proposed Discretionary Business Rate Policy – Commercial Development for an initial pilot period of 12 months.