Small Business Bonus Scheme Evaluation Short-Term Working Group minutes: June 2022

Attendees and apologies

Attendees

• Federation of Small Businesses
• Fraser of Allander Institute
• Booksellers Association
• UKHospitality
• Scottish Grocers Federation
• National Hair and Beauty Federation
• Scottish Licensed Trade Association
• Association of Convenience Stores
• Scottish Property Federation
• Convention of Scottish Local Authorities
• Scottish Chambers of Commerce
• Institute of Revenues, Rating and Valuation
• Association of Scotland's Self-Caterers
• Scottish Government

Apologies

• Confederation of British Industry (Scotland)
• Institute of Chartered Accountants of Scotland

Items and actions

Welcome and introductions

Introductions were made and apologies noted. Participants were thanked for agreeing to be part of this short-term group which was established following the Fraser of Allander’s (FAI) report of the evaluation of the Small Business Bonus Scheme (SBBS).

It was explained that minutes of the meetings would be produced and circulated to members for agreement. 

Group remit 

The chair referenced the proposed remit for the group (below) that had been circulated in advance with the agenda for the meeting. It was noted that the focus for the group was to consider in particular the report recommendation relating to collecting new information that will make for a more robust assessment of SBBS.

Remit

To inform advice to Scottish Ministers in respect of considering the response to the final report of the Evaluation of the Small Business Bonus Scheme, particularly in respect of the recommendation “that the Scottish Government begins to collect new information that will make a more robust assessment of the SBBS (and potentially other reliefs) possible in the future.

A member asked if this group would consider other non-domestic rates reliefs within the remit, and it was clarified that the focus was on the Small Business Bonus Scheme. It was however noted that the same challenges identified in the evaluation of SBBS could be relevant for other reliefs too. 

It was suggested that the group should be aware of other initiatives across Scottish Government and local authorities of relevance, such as the commitment to explore how best to transform the digital administration of the non-domestic rates system.

SBBS evaluation report – presentation and discussion and collecting new information 

The FAI delivered a presentation on the FAI’s evaluation of the Small Business Bonus Scheme and the findings. This was followed by group discussion, summarised below, which also provided an opportunity for the group to share views on SBBS.  

A member asked if there were any examples that could be shared of businesses in small premises but with a high turnover and whether there are any international examples of linking business data to property data. The FAI offered to look for examples of sectors using small premises, but which may be considered a large business. 

The Association of Scotland’s Self-Caterers (ASSC) noted that 80% of their members receive SBBS relief and it would be hugely damaging to them if it were to be withdrawn. They were not aware of any members who had been surveyed for the evaluation work and were interested in how those businesses had been selected. The FAI explained the survey was sent to a sample of properties to gather additional information to the statistical evidence. Further information on the survey sample can be found in the report.  

The Federation of Small Businesses (FSB) stated the main priority for their members was that SBBS should continue, but they would not oppose making the relief fairer and having better data. They also noted that any changes should not be more burdensome for business who also have other requirements to meet. This was supported by the Scottish Grocers Federation (SGF). 

The FSB also queried how the number of businesses that would be considered “small” and currently eligible for SBBS relief would compare to the number of SBBS recipients in future should a different approach be taken in SBBS eligibility i.e., thresholds based on turnover etc.

The SGF commented that SBBS relief is beneficial to retailers, and it is vital it is maintained in the long term so the sector can recover from the impact of COVID-19. They explained that 84% of independent convenience retailers benefit from SBBS, enabling them to continue to trade, invest in the business and create new jobs. SGF also noted any conditionality attached to the relief would impact on business planning and would also make the scheme difficult to administer. They are also of the view that the individual and cumulative threshold for SBBS should be raised. 

The Scottish Property Federation (SPF) stated that non-domestic rates data has been used for 25 years as the go-to place for business data and notes that better registration of businesses in Scotland would support decisions affecting the tax base. They suggested a large proportion of businesses do not pay rates and there should be an analysis of those businesses. SPF proposed a de minimis payment from all ratepayers.

The Institute of Revenues, Rating and Valuation (IRRV) asked what SBBS relief would be based on if not rateable value and noted that changes could add to local government costs of administering non-domestic rates. They also queried who would be responsible for any new business register and if the costs of creating one had been identified. Scottish Government noted that the focus of this group was SBBS relief data collection, and such work would link with the separate commitments such as considering digital transformation of non-domestic rates systems. 

The Scottish Licensed Trade Association highlighted that licensed hospitality premises in Scotland are rated in different ways including as a percentage of turnover. This means some small businesses in this sector have large rateable values which places them outwith SBBS thresholds. 

The Booksellers Association noted that a majority of their members in Scotland benefit from SBBS. They also enquired whether any cost/benefit analysis had been undertaken on the data collection.

The Association of Convenience Stores noted the importance of understanding, in the first instance, the different types of business receiving SBBS (e.g., in turnover, employee numbers etc.). They also asked what outcomes are sought that are not currently being achieved by SBBS. The FAI noted that Annexes B and C in the report have some analysis regarding distribution in turnover, employment for SBBS recipients. 

UKHospitality indicated a definition of a small business would be helpful. They noted that they have previously asked for non-domestic rates to be considered in the round and that they would support a Scottish business register. 

The Scottish Chambers of Commerce suggested that the discussion has raised both the benefits and challenges of SBBS. They would wish to refer to their business rates advisory group for further insight on their members views aligned with the full NDR system. 

COSLA stated that they have an interest in what sort of information should be collected and raised the question of whether there are opportunities to devolve matters on business support to at a more local level. 

The group were informed that the Scottish Government is looking at ways to improve business data and linkages with other sources. These include working with the Office for National Statistics regarding the building of a UK Business Index and a replacement for the Inter-Departmental Business Register (IDBR) including more information on reference numbers (such as the inclusion of Unique Property Reference Number) which will enable linking of data sources. A pilot is expected by March 2023. 

There is also a piece of work to consider how data about businesses can be gathered together and used to transform the design, delivery, and evaluation of business support services across Scotland’s public sector to build a Master Customer Record of businesses. This work has progressed from proof of concept to case studies using COVID Business Support Scheme data. It was noted that the Government does not want to put extra burden on people/businesses if this can be at all avoided so existing administrative and survey data will be utilised first. 

The Chair thanked the group for offering their views, noting the views on the benefits of SBBS as well as considerations around future business data collection. These will all be considered ahead of the next meeting. 

Date of next meeting 

The chair suggested that the group would meet a further two to three times, and the Scottish Government would get the next meeting in diaries as early as possible. Members were invited to share preferences on future meetings being virtual or in-person.

Action: Date and agenda for next meetings to be circulated– Scottish Government.