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12/05/2020

Issues Raised at STA Council Meeting, 12th May

The following issues were raised at the Scottish Tourism Alliance Council Meeting on 12th May, which was attended by the Cabinet Secretary for Rural Affairs and Tourism, Fergus Ewing MSP.

Small Business Grant Scheme: Islands (Scotland) Act

Orkney’s MSP, Liam McArthur, called on Ministers to further amend the eligibility criteria for the Coronavirus Business Support Fund to allow more tourism businesses in the islands to apply for much needed support (6th May).

There has been ongoing confusion over recent weeks as to whether or not self-catering businesses need to prove that properties were booked for 140 days last year, or merely available to book. While guidance to local Councils suggested the former, a recent response from Fergus Ewing MSP to Shetland MSP Beatrice Wishart suggested the latter. Mr McArthur wrote to the Finance Secretary, Kate Forbes, seeking clarity and has been told that 140 days of bookings are required in order to be able to access support.

Mr McArthur said: “Getting the eligibility criteria right for these funding schemes was never going to be easy. The Finance Secretary deserves credit, however, for being willing to make changes based on feedback from myself and MSP colleagues, as well as businesses directly.

“However, almost two months into the lockdown, and it is clear that many self-catering businesses in Orkney are still falling through the gaps, despite being able to evidence self-catering as a primary source of income.  This not only threatens the future of these individual businesses but also potentially Orkney’s wider tourism sector.”

Many of the local authorities with the majority of respondents in the ASSC’s recent survey also have island communities. The Islands (Scotland) Act requires local authorities and the Scottish Government to ‘island proof’ any legislation or policy decision affecting Scotland’s island communities. Under the Act, an island communities impact assessment should be prepared when a new or revised policy, strategy or service is likely to have a significantly different effect on island communities. Many of these island communities are the very ones who are being disadvantaged by the eligibility criteria for self-catering grants as they are less likely to be able to evidence 140 nights occupancy.

Expecting self-caterers in the islands to be able to evidence almost five months of bookings for their property is often unrealistic given that the tourism season is typically shorter here than in other parts of the country, and can be negatively impacted by weather and ferry cancellations.

Can we have some reassurance that an impact assessment was made prior to introducing the eligibility criteria for the self-catering sector?

ASSC would urge the Cabinet Secretary for Rural Affairs and Tourism and the Cabinet Secretary for Finance to discuss the eligibility criteria for self-caterers again, to ensure that perfectly legitimate businesses receive the financial support that they need as a matter of urgency.

Rates Calculation

There is concern that while some businesses are covered by one Rateable Value, others have multiple RVs. This has an ongoing impact on grant eligibility.

According to the Scottish Assessors Association, if all the units are on one site or location they would normally be included in the Valuation Roll as a single entry. However, where it is not as simple as that, multiple entries could result. Examples of this could be where there is different “ownership” of units, meaning that one or more of the units are in a separate occupation. A fairly recent case in England found that if a group of properties are in the occupation of more than one person meaning that access between them is shared, then all of the subjects should be entered separately in the valuation roll. Another example could be where a site is split by a public road. There are various different scenarios.

The assessors will circulate the question round the various Assessors’ offices to see how common this is.

Local Authority Performance: Distribution of Grant Allocation

ASSC is still receiving representation that grants are being withheld or not processed for self-caterers in a number of local authorities.

COSLA is aware that there have been “issues with the guidance that has meant some applicants, including self-catering, have been on hold and in some areas that is also a function of the constant back and forward with applicants as people applying fail to provide enough or the right information which causes delays” (Hugh Lightbody, COSLA, 8thMay).

On 5th May, Highland Council had only received 719 grant applications, despite there being over 4,000 SCUs on the rates roll. Concern remains that a huge number of businesses believe they are ineligible for support based on the overly strict criteria.

Many businesses have had no response to an application over a month later.

The ASSC has asked for access to data regarding the distribution of grants to the self-catering sector from COSLA. We assume that this would be easy enough, given the associated eligibility criteria that has been introduced soley for our sector. This would be extremely helpful in assessing the distribution of grant allocation and ensuring that the self-catering sector is not being disadvantaged by the current grant eligibility criteria.

Business Interruption Insurance

Thousands of small businesses across Scotland are trying to claim on their insurance policies because of the interruption to their trading caused by the lockdown.

Despite the UK Government announcement on 17th March, the insurance companies are not stepping in to help, and will not do so unless Government intervenes. Businesses urgently need a package in place to offset the fact that vast numbers of insurance providers will simply not pay out.

We need an urgent agreement between UK Government and the Association of British Insurers.

At First Minister’s Question Time on 6th May, the following question was asked regarding insurance company obligations:

“Several insurers have been accused of wriggling out of their obligations, which puts at risk the future of many businesses. Will the First Minister meet insurance companies and spell out to them that leadership and social responsibility are crucial during the pandemic, so that, when the lockdown ends, we can still have a functioning economy?” (David Stewart (Highlands and Islands) (Lab).

ASSC would urge the Cabinet Secretary for Rural Affairs and Tourism and the Cabinet Secretary for Finance to have a more direct discussion with the insurance sector, alongside their counterparts in the UK Government to secure an intervention.

For those insurance providers who have accepted liability for accommodation providers eg NFU, they are deducting the £10k or £25K Small Business Grant from any loss of income / Business Interruption payout due. The Grant should be seen as support for ongoing business costs (including standing costs such as insurance and utilities). The Business Interruption cover should reflect loss of income during the lockdown, when Government enforced closure of non-essential businesses on 23rd March, including self-catering accommodation providers.

We would urge that this is highlighted to the Financial Conduct Authority and UK Government and intervention is sought.

Furnished Holiday Let Income

UK Government’s Department for Digital, Culture, Media & Sport has announced on 5th May that the Government is holding to its view that self-catering income is not eligible for self-employed support (SEISS).

The view is that self-catering businesses can apply for funding through the new £617m discretionary fund that the UK Government has given councils. The Tourism Alliance has made representations that self-catering should be included alongside B&Bs in the more detailed guidance that’s being developed – although they are not hopeful that this will be achievable.

This is obviously disappointing, especially in light of the eligibility criteria in Scotland for Small Business Grant support.

Self-catering businesses in Scotland should not be disadvantaged.

ASSC seeks reassurance that this funding will be replicated in Scotland, and that it will cover self-catering businesses that are not on Non-Domestic Rates.

2022 Rates Revaluation

UK Government announced on 6th May that a revaluation of business rates will no longer take place in 2021 to help reduce uncertainty for firms affected by the impacts of coronavirus.

I understand that the Scottish Assessors have received somewhere in the region of 3000 appeals against the Rateable Values now in the Valuation Roll, due to the Covid-19 outbreak. The appeals received in March 2019 have to be disposed of one way or another within 12 months. So, if they are not agreed or withdrawn, they will require to be heard by Valuation Appeal Committees. That could be an extreme use of resource in what is supposed to be a year when the Assessors are carrying out revaluations in preparation for 2022

Under the circumstances, will there be an extension to that timescale, from the Scottish Government?

Agents are looking for a reduction in rateable value because of the Covid-19 outbreak, as they suspect that rental levels will fall. That can’t be evidenced for some time, but they are protective appeals. The law changed on 6th April, however, to determine that a material change affecting value can no longer be on the grounds of economic downturn. It has to be a physical change.

The tone date for the 2022 rates revaluation in Scotland is 1st April 2020. Is this still viable, or should the revaluation be postponed?

 

 

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