Charity retailers could face a squeeze as more local authorities tighten their criteria on discretionary rate relief, according to Oxfam.
The charity told LGC’s sister publication Materials Recycling World that eight councils had cut rate relief on its sites in the last two years, affecting 14 of its stores.
Charities are currently eligible for a mandatory 80% rate relief and local authorities are able to give up to 20% additional discretionary relief.
According to Oxfam, stores affected included three in Ealing LBC, three in Amber Valley BC, two in the Haringey LBC and one in Gwynedd Council.
Andrew Horton, Oxfam trading director, said: “We are seeing a small increase in local authorities cutting back on our business rate relief but others may be considering it, and we are concerned about the impact this will have on our shops’ ability to perform.”
He said that the stores’ function was wider than raising money for the charity.
“They also serve as a local community focal point, bringing together volunteers, donors and shoppers, and play a vital role in the reuse and recycling of unwanted textiles, keeping them out of landfill and maximising their charitable value instead.”
Amber Valley confirmed that the authority no longer provided the 20% relief for charity shops, although it does offer it for other types of charity organisations. A source told MRW it was considered unaffordable and not the right use for people’s council tax when the establishments already got 80% mandatory relief.
Ealing council said that since last April it had considered applications for the discretionary rate on a case-by-case basis, with those getting less than £1,000 in relief continuing to receive the award.
A spokesperson said: “In considering an application the council looks at factors such as what benefits an organisation brings to Ealing residents and the applicant’s financial position.”
Concerns have been raised that business rate relief gives charities, some of which are large organisations, an unfair advantage over other high street retailers and businesses
The LGA said that £10bn of cuts to local government funding meant councils were having to make difficult decisions but would help charities with the impact of any new arrangements.
The Welsh government is due to report on a consultation to cut the mandatory 80% relief to 50% next month. Earlier this month, the Charity Retail Association warned that the cut could impact on recycling targets, as some charity shops, which divert 20,000 tonnes of textiles from landfill each year, would have to close.