NEW powers allowing councils to offer business rate discounts could be used to try to attract investment to Edinburgh’s waterfront, experts say.
Finance Secretary John Swinney is giving local authorities the ability to cut business rates so they can offer incentives targeted at particular areas or sectors in a bid to boost the local economy.
Graham Birse, director of the Edinburgh Institute at Napier University, said the move was a good one.
He said: “There is an opportunity to target particular areas like Leith and the waterfront to attract renewable energy investments, for example. I’ve no doubt the council will be looking at that. You could also look at sectors you want to encourage, like renewables or life science investors.”
But he said councils would have to consider the loss of revenue from offering discounts.
“They would need to think what the impact of reduced income would be. Local authorities are not in a position to do without revenue. It would need to be looked at in terms of the greater gain over time from the arrival and growth of new investors.”
Conservative group leader Cameron Rose praised the new flexibility which he said would allow councils to respond to particular needs.
He said: “There are areas that are difficult to get moving, where it’s difficult to attract investment. The waterfront has failed to reach the potential it was seen as having and that would be an obvious area where we could look to attract business – some areas of Leith, too.
Gordon Henderson, of the Federation of Small Businesses, said the new powers were welcome but would have to be used wisely to avoid a “race to the bottom”.
“What we don’t want is local authorities starting to work against one another, with one making their rates lower to attract businesses from a neighbouring area.”
He said he hoped Edinburgh and the other Lothian councils, who are co-operating on proposals for a City Region Deal, could work together on rates.
He said: “Hopefully we could have some joined-up thinking and a sensible use of the power to help businesses rather than councils competing with each other.”
Green finance spokesman Councillor Gavin Corbett said it was hard to see how councils could afford to cut rates without also being able to increase them for businesses which were doing well.