You are the councillor….

So for all of you who fancy being a politician, here is an interesting discussion that cropped up at tonight’s Exec to see how you would decide. You can find the background papers for yourself (Item 10 of tonight’s meeting) and this is all in the public domain.

A new business called The Beauty Rooms opened in Park Street, Camberley in July 2011 which is Camberley’s first dedicated beauty salon.  According to background papers, they employ 2 f/t and 4 p/t members of staff and have over 1000 customers on their database with clients travelling some distance for their services.

The owner pays their business rates of £8715 for the year 11/12 to the Council.  However, they then apply to Surrey Heath for a hardship grant to cover this year’s business rates in light of the economic climate. They believe that this hardship will last 6 to 12 months whilst their business builds up. 

This is the first such application made to the Council since 1991 and therefore without any guidance or policy, it falls to politicians to decide whether to grant this.  So the decision is…

Do you decide to refuse this application on the grounds that the owner should have considered business rates as part of their plan and also it would set a dangerous precedent for other businesses to submit other similar hardship applications. This application if granted would result in taxpayers money (around £12k of which about £3k would be from Surrey Heath being spent in essence to prop up a a private enterprise.

Or do you decide to agree the application on the grounds that redeveloping Camberley Town Centre is the Council’s Number 1 priority and the business may otherwise close resulting in another empty unit in the town centre. In addition, the Council has gone on record to state support for small business using the strapline of “Surrey Heath is open for business.” Agreeing the request would also mean 6 staff keeping their jobs and at least 1500 customers continuing to visit Camberley for a beauty service rather than going to other towns? 

Not an easy one and as you can imagine, there were some different views….any comments on the likely outcome?

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4 thoughts on “You are the councillor….

  1. Richard Wilson

    I like this challenge. I don’t know what happened tonight but I’ll risk giving my opinion anyway.

    On one hand, it could create moral hazard where people set up unsustainable businesses and the council subsidises them until they go bust a short time later. Also, the borough is taking a hit to prevent the treasury potentially losing business rates.

    On the other hand, £3k is a small amount to save the jobs and prevent a spiral of decline where custom is lost by one business and nearby businesses suffer, suppliers could also be affected. I believe government, including local government, should intervene in the market to support businesses, within reason.

    The information available, here, on the council website and via Google, does not lead me to believe this business has been irresponsible. My decision is: agree to the application for hardship relief. Do I win a prize?

    Reply
    1. rodneybates Post author

      interesting comments and my own view was somewhere in the middle. I didn’t like the idea of public money being spent on private businesses but neither did I like the idea of another empty shop in Camberley as we are hardly overwhelmed with demand and nor did I want 1000 people taking their custom to other town centres. Therefore, the option I put forward was to defer the decision to the next meeting in order to see a proper business plan from the shop. If this was satisfactory and robust, I would personally have considered giving them the equivalent of 1/2 the rates for this year only but as a loan which would be repayable over a 3 or 5 year period. They would still have to pay the other half as planned.

      However, the decision made eventually was to reject the application outright although they remained open to the idea that repayment schedules could be amended during this year. We will see in time whether this is the right call..

      Reply

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