Tackling Empty Properties

My first debate after the October recess in my role as Labour’s Shadow Cabinet Secretary for Local Government will be on the Scottish Government’s Bill on unoccupied properties.

On high streets across Scotland, the sight of empty shops has become increasingly familiar. At the same time, the number of long-term-unoccupied residential properties continues to be a problem, particularly in Edinburgh where there is a shortage of housing supply. The Scottish Government has introduced legislation to try to address the situation.

The Local Government Finance (Unoccupied Properties)(Scotland) Bill would change the system of rates relief currently offered to owners of empty commercial and industrial properties. It would also allow councils to charge owners of long-term-empty homes an increase in their council tax to encourage them to either sell or let out their property.

While the ideas of varying Council Tax levels in order to incentivise owners to bring empty properties back into use isn’t a bad one – the detail will be crucial.    There has been consultation on both the principle and the detail of the proposals with the latter closing on 5 October.   The next step will be a Statutory Instrument being proposed to the Parliament which will empower local councils to charge more for empty houses.

However the proposals on commercial properties have been extremely badly handled by SNP ministers and could create more harm than good.   The proposals are controversial because we are in a recession and the main reason commercial properties are left lying empty is lack of demand.  

At present, owners of empty commercial properties pay no business rates for the first three months. After this period, they receive a 50% discount. However, under the new proposals, after the first three months, the discount would be reduced to 10%.

The logic goes that if the savings that owners can make by keeping a property empty are substantially reduced, they will be more inclined to ensure that the property is let out or sold to a commercial operator.  

During Stage 3 discussions on the bill I will be raising the legitimate concerns expressed by the business community that need to be addressed.  I am particularly concerned at the lack of detail coming from the Scottish Government and the lack of rigour in the proposals.

A similar system was recently introduced in England and there has been evidence to suggest that some commercial property owners have opted to cut losses and demolish older buildings rather than invest in regenerating them.

At the same time, organisations like the Scottish Chamber of Commerce and CBI Scotland have suggested that the problem of empty properties has more to do with the lack of demand from consumers rather than unwillingness on the part of owners to make property available.

When the Parliament’s Finance Committee looked at the Scottish Government’s figures for the bill, a number of criticisms were made.

I am particularly concerned that the Scottish Government did not carry out a Business Impact Assessment that would provide more information on the impact of the proposals on businesses. It is also concerning that no attempt was made by the Scottish Government to identify how many properties they expected to be brought back into use as a result of the legislation. Unless such details are identified, it becomes incredibly difficult to monitor progress.

I don’t hold out a great deal of hope that these points will be taken on board by the Scottish Government as not one amendment from Labour members was accepted at Stage 2 in committee.   But I’ll be reiterating these points when we debate the bill in the Chamber after the October recess.