Publication - FOI/EIR release

Business rates relief to retail, leisure and hospitality businesses in Scotland: FOI release

Published: 5 January 2024
Topic: Public sector
FOI reference: 202300339424
Date received: 23 January 2023
Date responded: 20 February 2023

Information request and response under the Freedom of Information (Scotland) Act 2002.

Information requested

Retail, leisure and hospitality businesses in England and Wales are receiving 75% business rates relief in the year 2023/24 up to a maximum of £110,000 of relief per business. This was announced in the UK budget in November, and in December by the Welsh Government.

How much additional funding was or is to be allocated to Scotland under the Barnett arrangements as a result of the business rates relief announced by the UK Government in the November budget?
Given this additional funding resulted from a decision to support retail, hospitality and leisure businesses, why have the Scottish Government not made the funds available to support the same types of businesses in Scotland?
Please provide copies of meeting minutes where the decision not to pass on the business rates support to businesses in Scotland was made by Government together with the rationale which was used to reach this decision.
It is clear that the Scottish Government has received representations on behalf of business representative groups including Dr Pete Cheema OBE, Chief Executive, Scottish Grocers’ Federation, David Lonsdale, Director, Scottish Retail Consortium, Andrew Goodacre, Chief Executive, British Independent Retailers Association, Howard Davies, Head of Policy, and Public Affairs (Acting), Booksellers Association. Please provide copies of all correspondence between the Scottish Government and all business Associations and Groups relating to the subject of business rates relief in Scotland for the 2023/24 year.
Please provide copies of any and all communications from the UK Government to the Scottish Government regarding the additional Barnett consequential funds received or to be received by the Scottish Government as a result of the November budget, showing which budget measures have driven the additional funds being allocated and any rationale or reasoning surrounding the funding which was provided by UK Government.
Please advise how the Scottish Government have allocated the additional Barnett consequential funds received or to be received as a result of the UK Government business rates relief in their budget/spending for 2023/24.

Response

1. The gross consequential funding to Scotland in respect of 75% relief for the Retail, Hospitality and Leisure sectors up to £110,000 cash cap, announced for England for 2023-24, is £199.359 million.

The gross consequential funding to Scotland in respect of Transitional Relief announced for England in 2023-24 is £169.065 million.

The gross consequential funding to Scotland in respect of Small Business Transitional Relief announced for England in 2023-24 is £110.360 million.

It is important to highlight that consequential funding, both negative and positive, accrues to Scottish Ministers as a whole at fiscal events when the UK Government makes a policy decision in relation to matters that are devolved in Scotland, such as non-domestic rates. It is for Scottish Ministers to decide how all the resources available to them should be allocated.

This context is critical because it means that one cannot look at any individual consequential funding line in isolation as the budget will include both positive and negative consequentials. The overall budget is also subject to Block Grant Adjustments to reflect the new powers devolved under the Scotland Acts. There is therefore inevitably a difference between the gross consequentials received and the net consequentials available for allocation.

2. The information you have requested was provided in response to Parliamentary Question S6W-13341, and is available from the Scottish Parliament’s website. Under section 25(1) of FOISA, we do not have to give you information which is already reasonably accessible to you. If, however, you do not have internet access to obtain this information from the website(s) listed, then please contact me again and I will send you a paper copy.

3. An extract of the information you have requested has been attached. Some of the information has been redacted as it relates to a different topic and does not fall within the scope of your request.

While our aim is to provide information whenever possible, in this instance we are unable to provide some of the information you have requested because exemptions under section 38(1)(b) (personal information), section 30(a) (convention of collective responsibility of Scottish Ministers) and section 30(c) (substantial prejudice to the effective conduct of public affairs) of FOISA applies to that information. The reasons why that exemption applies are explained in the Annex to this letter.

4. Most of the information you have requested has been attached. While our aim is to provide information whenever possible, in this instance we are unable to provide some of the information you have requested because an exemption under section 38(1)(b) (personal information) of FOISA applies to that information. The reasons why that exemption applies are explained in the Annex to this letter.

5. While our aim is to provide information whenever possible, in this instance we are unable to provide some of the information you have requested because an exemption under section 27(1) (information intended for future publication) of FOISA applies to that information. The reasons why that exemption applies are explained in the Annex to this letter.

6. As noted in the answer to question 2, the Barnett consequentials received as a result of the UK Government’s announcements on business rates relief in England on 2023-24 accrue to Scottish Ministers as a whole at fiscal events and individual consequential funding lines cannot be looked at in isolation.

With regards to the non-domestic rates package announced in the Scottish Budget 2023-24 on 15 December 2022, freezing the non-domestic rates poundage is estimated to save ratepayers £308 million compared to an inflationary increase, higher than the £169 million of consequentials received for the equivalent policy in England.

The non-domestic rates relief package available in Scotland in 2023-24 is estimated to be worth £744 million. A breakdown of this figure for individual reliefs is available on the Scottish Fiscal Commission’s website, noted under “Charts and Tables”, “Chapter 4 – Tax – Supplementary Figures”.

ANNEX
REASONS FOR NOT PROVIDING INFORMATION

An exemption applies
Section 38(1)(b) of FOISA (personal information)
An exemption under section 38(1)(b) of FOISA (personal information) applies to a small amount of the information you have requested because it is the personal data of a third party, i.e. names and contact details of individuals, and disclosing it would contravene the data protection principles in Article 5(1) of the General Data Protection Regulation and in section 34(1) of the Data Protection Act 2018.

This exemption is not subject to the ‘public interest test’, so we are not required to consider if the public interest in disclosing the information outweighs the public interest in applying the exemption. An example of this exemption in this response is redaction of names and email addresses of third parties.

Section 30(a) – convention of collective responsibility of Scottish Ministers
An exemption under section 30(a) of FOISA (convention of collective responsibility of Scottish Ministers) applies to some the information requested. This exemption applies because disclosure would, or would be likely to, prejudice substantially the convention of the collective responsibility of Scottish Ministers for the Scottish Government’s decision on non-domestic rates reliefs. Government in Scotland, as in the rest of the UK, has long worked under the convention that Ministers are collectively responsible for non domestic rates policy and its delivery. Collective responsibility requires collective discretion, and ensures that Ministers can express their views frankly in internal discussion of an issue while maintaining a united front once decisions have been reached. Disclosing communications of individual Ministers would prejudice substantially the maintenance of the convention.

This exemption is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is a public interest in disclosing information as part of open, transparent and accountable government, and to inform public debate. However, there is a greater public interest in maintaining collective responsibility for the Scottish Government’s decision on retail, hospitality and leisure relief, once a settled policy decision has been made. Disclosure of these internal discussions between Ministers would be likely to have the effect of undermining the Government’s position on non-domestic rates reliefs, and thus the effectiveness of the decision, which would not be in the public interest.

Section 30(c) – substantial prejudice to the effective conduct of public affairs
An exemption under section 30(c) of FOISA (effective conduct of public affairs) applies to some of the information requested. This exemption applies because disclosure would, or would be likely to, cause substantial prejudice to the to the effective conduct of public affairs in relation to communications with external stakeholders.

This exemption is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is a public interest in disclosing information as part of open, transparent and accountable government, and to inform public debate. However, there is a greater public interest in maintaining good relations between the Scottish Government and other parties and in protecting the free exchange of information between both to ensure that we keep each other fully and regularly informed about matters of mutual interest. There is no public interest in disclosing information when that will damage relationships and disrupt future communications.

Section 27(1) – information intended for future publication
An exemption under section 27(1) of FOISA applies to some the information requested because the UK Government intend to publish that information by the end of March, which is within 12 weeks of the date of your request. We consider that it is reasonable to withhold the information until that date, rather than release some of this information before the planned publication date.

This exemption is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is some public interest in release because it provides details of consequential allocations to Scottish Government, and this will be met by the planned publication. In the meantime, details of the consequential allocations for retail, hospitality and leisure relief have been provided in response to the first question in your FOI request, and there a greater public interest in taking the time necessary to ensure that the information has been properly collated before it is published as planned. Also, we see no public interest in disrupting the programme of work to release the information ahead of the intended publication date.

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at http://www.gov.scot/foi-responses.