Barclay Review is good news for renewables, but there’s still work to do

Business rates have been a key issue for Scottish Renewables members over the past few years.

Pan-renewables rates relief was removed in 2015, coinciding with tariff cuts from Westminster.

Revaluations in early 2017 brought in some staggering bill increases, threatening the viability of some projects.

While Scottish Renewables successfully argued for relief for those worst affected by these changes, the Scottish Government had already commissioned Ken Barclay to conduct an independent review of the ratings system.

Barclay’s job was to present revenue neutral proposals which will now be considered by Scottish Ministers.

Though the review’s remit didn’t extend to the 2017 revaluation and the difficulties it was causing, it did signal an understanding from the Scottish Government that the ratings system, with its origins dating back to the 17th century, was in need of an overhaul.

The review, published earlier this week, delivered three key recommendations for the sector, all of which had been called for by Scottish Renewables.

The first: more frequent revaluation cycles.

We argued that holding valuations every three years rather than five, and condensing the time between the snapshot ‘tone date’ and implementing the revaluation, would help the ratings system respond to economic change.

Barclay agreed, setting out that from 2022 revaluations should happen every three years and be based on market conditions one year prior to the revaluation.

The second: a review of the Plant and Machinery regulations, which sit behind the valuation process.

We argued that there were a number of inconsistencies in those regulations and that they should be reviewed to accurately capture developments in renewable energy technologies and account for changes in the energy sector and the wider economy since the regulations came into effect in 2000.

The Barclay Review supports

“a separate review of Plant and Machinery valuations with particular focus on renewable energy sector valuations”.

Perhaps more importantly, it wants this to be done with industry, and to begin speedily.

Thirdly, we called for rateable values to be calculated more transparently and consistently.

Again, this has been picked up by Barclay.

The report calls for rates assessors to provide

“more transparency and consistency of approach”, and even suggests that “if this is not achieved voluntarily, a new Scotland-wide Statutory Body should be created which would be accountable to Ministers”.

The task now is to ensure that Scottish Ministers act upon these recommendations as quickly as possible.

There is no time to waste in acting to ensure the ratings system is consistent, up-to-date and transparent for all businesses in Scotland.

Blog by Policy Manager Hannah Smith.