The Business Centre Association is the latest industry group to criticize the Government’s plans to remove empty rate relief.
The trade association, which represents the managed Workspace industry, said the Government’s proposals would ‘place an intolerable burden on the providers of serviced office space and potential future providers’.
It said that because of the constant movement of occupiers between serviced office buildings there were inevitably void periods when operators were seeking new clients.
‘We believe the proposals will seriously harm the serviced office and managed workspace industry, with operators seriously questioning the wisdom of expansion or even entering the industry, given the norm of empty space within any particular operation,’ it said.
It said in Manchester and Leeds operators face empty rate bills of £4/sq ft on space after the three month void has passed and this would double to £8/sq ft if the Government proposals proceed. The association added that an operator in the City of London currently paying empty rates of £6.50/sq ft would have to pay £13/sq ft when the legislation came into effect.
The BCA said the outcome could lead to a new space for small businesses ‘drying up’ and it would be up to public bodies to fill the gap ‘due to market failure’.
It recommended that the government provide protection to service operators and asked that empty rates are not charged to business centres for the first two years to allow centres to fill up.
BCA executive director Jennifer Brooke said: ‘No commercially orientated landlord keeps accommodation vacant deliberately…Introduction of the proposed measures will achieved none of the Government’s stated aims and without the simultaneous introduction of concessionary measures for small properties there will be unintended consequences for the small business sector, the very part of the economy that the Government has been so keen to nurture over recent years.’