Croydon Council last night unveiled a business rates reduction scheme using £1.1million-worth of the Mayor of London’s riots recovery fund – and targeted at an area away from the zone worst-hit by the arson, looting and rioting on 8/8 last year.
The scheme, announced by Vidhi Mohan, a councillor for Fairfield ward and the cabinet member responsible for economic development on the Conservative-controlled council, is targeted at large, and mostly empty, office buildings around East Croydon station and it promises – but does not guarantee – to create up to 2,000 jobs.
Nor does it offer any riots relief for existing Croydon businesses, many of them small, independent traders along the London Road or in Old Town, who were among the worst hit by the riots.
Since the riots last August, central Croydon has been further devastated as major employers including Nestle, Bank of America and Allders have fled or closed up shop, with thousands of jobs lost to the area.
Speaking at a reception held at Jury’s Inn, Mohan announced a partial rate relief programme for businesses moving in to central Croydon. Fuller details were provided by a representative from Deloittes.
The proposal is pale imitation of the Enterprise Zone that was offered to Croydon but turned down by the Tory-run council despite enthusiastic support for the idea from Mayor Boris Johnson and local MP Gavin Barwell.
Sources suggest that Conservative councillors on the planning committee resented losing some of their powers under the EZ’s attempt to reduce red tape.
On Thursday, Mohan said that he would be happy to apply for an EZ, which offers 100 per cent rate relief in the agreed area. “Anything that helps, we are happy to look at,” Mohan said.
Under the Croydon Council scheme announced last night, new businesses in an area from Fairfield Road to Lunar House and to the east of Croydon’s eight-lane urban motorway and to the west of the London-to-Brighton railway line, plus the area near the top part of Cherry Orchard Road, and West Croydon station and Prospect West are to get some business rate relief in the next two and a half years.
The limited area has been selected to try to maximise the effect of the projected £1.1million rate subsidy “to fill office vacancies”, according to a Croydon Council officer at the presentation.
The council says, “The offer of reduced business rates could in part help reduce the number of empty shops and offices in the area by up to 10 per cent over three years.”
Asked by Inside Croydon about the thinking behind the selection of the area, Mohan said it was “to take full advantage of the excellent transport links”.
The large area of the proposed Ruskin Square development in the centre of the tax-discount zone still awaits the developers, Stanhope, securing some pre-lets. It seems unlikely to be fully developed or let before the end of the tax discount period.
The proposed grant applies to properties that exceed £25,500 pa in business rates, with 65 per cent of the rates bill exempted in the first year, reducing to 20 per cent by year three.
Job creation is Mohan’s principle aim. “This business rate grant will help the council to encourage small and medium enterprises to move into the town centre, where there is available office space.
“The savings made by each business will mean that cash can be put back into growth and job creation in Croydon.”
Businesses that apply will have to demonstrate that they will be employing more people as a result of taking on new premises.
The council also unveiled an investment prospectus Croydon, LONDON that has the council’s own £145 million Headquarters building development on the front and back covers – which may send out the wrong signals as far as where Croydon Council’s priorities lay as far as development across the borough is concerned.
The HQ is the only main development in Croydon except for the new office building development emerging on Dingwall Avenue. This subsidy may help to let that building.
CROYDON’S RATES DISCOUNT SCHEME comes up short when compared with the 100per cent, five-year exemption that a Government-driven Enterprise Zone might provide.
Local government minister Eric Pickles said: “Enterprise Zones are set to become the crown jewels of how we make Britain the best place in the world to start and grow a business.” But not in Croydon, apparently.
An EZ provides:
- 100% business rate discount up to £275,000 over 5 years for businesses moving into an EZ
- All business rates growth in the Zone for at least 25 years will be retained in the London borough where development starts
- Radically simplified planning approaches to get jobs now
- Government support for roll out of super fast broadband in the zone, including funding
In some cases there are very large capital tax reliefs.
Under the Croydon Council scheme announced this week, Mohan said that he expects that the average discount to a business over 30 months will be… £19,000.
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