Council seeks to claw back £300k by hiking costs for local businesses
NELC wants to recoup £309,000 from 185 small and medium companies in Grimsby
By Grimsby Telegraph | Posted: 13 Dec 2017
North East Lincolnshire Council is hoping to claw back more than £300,000 in unrecovered cash from local businesses who have begun to "benefit" from a subsidy aimed at helping small enterprises get up and running.
A total of 185 businesses which occupy authority-owned premises at nine of the Grimsby-area's largest business centres are facing increased charges as NELC looks to cut support offered to small and medium businesses when starting-up.
For a "substantial amount of time" North East Lincolnshire Council has assisted small start-up businesses who may move in to the commercial property market - either buying or leasing privately - by offering a subsidy to the operational cost of managing and operating the places they occupy.
An element of this cost has always been recouped by NELC through a service charge.
However, as the portfolio of businesses has "evolved" over time, many have continued to occupy accommodation and have been "benefiting from the subsidy", according to NELC.
Some businesses have been resident for more than a decade.
Cleethorpes Business Centre, Jackson Place, Wilton Road, Humberston (Image: Jon Corken)
And as the council continues to be placed under "significant financial pressure", officers are proposing to recover the full amount of service charge payable, in return for the subsidy.
Out of a possible £420,000 in recoverable service charge costs, the council has only managed to recoup £111,000, meaning there is £309,000 in missed revenue that it wants to cash in on.
Ahead of a meeting on December 20, cabinet has been presented with three options for recouping the cash, all of which would see businesses charged more from April 2018.
The businesses affected are in Europarc Innovation Centre, Grimsby Business Centre, Alexandra Dock Business Centre, Cleethorpes Business Centre, Immingham Business Units, Nunsthorpe Business Units, South Quay Business Units and Poplar Road Business Units.
Europarc business park, off the A180, Grimsby
In giving the go-ahead to the recovery of cash, the cabinet would ensure that the council continues to hold the portfolio whilst identifying further savings and growth opportunities.
The three options presented to cabinet members are:
Option one - Commence full recovery from April 1 2018; which will achieve the ongoing recovery of service charges (£309k) within the 2018/19 financial year.
Option two – Phase the implementation of recovery over a two year period from April 1 2018; 50% in each year (within the 2018/19 and 2019/20 financial year) to achieve full recovery of service charges from April 1 2020.
Option three - Phase the implementation of recovery over a three year period from April 1 2018; 33.3% in each year (within the 2018/19; 2019/20 and 2020/21 financial year) to achieve full recovery of service charges from April 1 2021.
Europarc Innovation centre, Europarc (Image: Abby Ruston)
Initially businesses were assisted in starting their small enterprises within the borough by the council the incentive of a subsidy to accommodation costs, so to establish themselves in the commercial market.
Now that businesses are established, as well as recouping the costs, NELC want to undertake a wider review of its commercial estate.
In the review, focus will be placed on the purpose for holding individual premises including recommendations on investment, rationalisation, full leasing or disposal of sites which will be reported to Cabinet in early 2018.