'RECENTLY, the Finance Secretary, Derek Mackay, announced the Scottish Government’s response to the Barclay Review of non-domestic rates. This was long-awaited by those in sectors like hospitality who have seen massive hikes in their rates bills following the revaluation earlier this year.

There was much to be welcomed in what Mr Mackay announced. He picked up a number of the recommendations from the Barclay Report that were well received, including a move to a three-year cycle for revaluations (rather than five years), introduction of a new rate relief for day nurseries to help facilitate an expansion of the sector, a new 60 per cent rate relief for hydro schemes, and the standardisation of bills.

There were two other significant changes proposed by Barclay that the Finance Secretary indicated he would be taking forward. Firstly, the introduction of a new “business growth accelerator”, whereby new properties would pay no rates for an initial twelve months, and that new properties would only be entered on the valuation roll once they were first occupied. This addressed a real concern that the removal of empty property relief by Mr Mackay’s predecessor, John Swinney, was acting as a disincentive to the development of new business premises.

Secondly, the large business supplement, which Mr Swinney had set at a rate double that in England and Wales, is to be reduced, although no set timescale has been agreed. It was not lost on many observers that all Mr Mackay was doing was reversing decisions taken by his predecessor, which have now been shown to damage economic growth.

But not everything that the Finance Secretary said was to be welcomed. The Barclay Review had recommended the removal of certain rates exemptions for charitable bodies, including independent schools, sports clubs, and local authority ALEOs (arms-length organisations), the last being those quasi-public bodies set up to run swimming pools, leisure centres, gyms, museums and libraries. Barclay recommended that these premises should be charged business rates in the same manner as private sector business.

The consequence of such a move would be that these ALEOs would either have to go back to their “parent” local councils and ask for more funding, or hike their user charges. So those using gyms, sports clubs, or taking their children swimming, would likely see substantial increases in costs.

This seems to directly contradict the direction of government policy in other areas, including the need to encourage active lifestyles and combat obesity. How making it more expensive for people to go swimming or become more active would help create a healthier population, is lost on me.

It is clear that the consequences of such a change simply haven’t been properly thought through. The Finance Secretary seemed to recognise the danger, announcing that he would consult on changes prior to announcing implementation later this year.

While there is much in what the Scottish Government announced on rates that is welcome, this week’s announcement shows, once again, that this is an SNP administration increasingly losing touch with the people of Scotland'.