The Federation of Small Businesses (FSB) is calling for more support for rural businesses and more to be done by offering higher business rate relief.

 The Federation of Small Businesses covers Dorset, Hampshire and the Isle of Wight and represents over 10,750 FSB Members.

A new FSB report, A new approach to the rural economy, is calling for the Treasury to make more funds available to local authorities so they can grant 100 per cent rate relief for a fixed period of just 12 months to help these vital village businesses weather the downturn.

At the moment the following types of businesses, which are based in rural areas with a population of below 3,000 and are within a rural settlement area, qualify for 50 per cent mandatory rate relief with local authorities able to grant further relief at discretion. 

• Sole Post Offices / General Stores / Food Shops
  At the moment sole post offices and general stores, with a rateable value of up to £7,000, qualify for 50 per cent mandatory rate relief.
• Sole Pubs / Petrol Stations
  At the moment sole pubs and petrol stations, with a rateable value of up to £10,500, qualify for 50 per cent mandatory rate relief.

The report outlines a mixture of short term and long term actions the Government must take to relieve the problems of the rural business owner and plan for a successful rural economy of the future.

These include:

• A planning system that encourages the development of a vibrant and diverse business community in the countryside
• Incentivising local authorities to encourage tourism
• Greater fiscal help for our rural small businesses

Chairman of the FSB’s Wessex Region, Ken Moon, said:

“We are calling for urgent help for village shops and pubs at risk of closure. This week we will see the UK’s leading agricultural show welcoming visitors for the final time after 160 years, our village shops and pubs could go the same way as the Royal Show unless urgent action is taken.  These businesses are at the heart of village life and the failure of such a business can devastate local communities The Rural Rate Relief  scheme was specifically set up to help these rural businesses and is being chronically underused.  Treasury must enable our local authorities to give 100 per cent rate relief during this downturn.”

Single shops, pubs, post offices and petrol stations in small rural settlements are eligible for vital funds from the Local Authorities which could help them through the recession, but according to the FSB, 47 per cent are currently missing out.

Village businesses, such as shops and pubs, are entitled to 50 per cent relief on their business rates under a Rural Rate Relief scheme, which also gives local authorities discretionary powers to grant up to 100 per cent business rate relief.

However, many local authorities fail to offer significant relief above the mandatory 50 per cent to half of all small village firms, which could mean the difference to those firms between survival and closure. 

The village shop network is losing between 300 and 500 shops each year, and 13 rural pubs close each week, yet the existing Rural Rate Relief scheme is not being fully used to help save these businesses, which form the heart of village life.

The Federation of Small Businesses covers Dorset, Hampshire and the Isle of Wight and represents over 10,750 FSB Members.