These changes could be made to charity rate relief

A new policy could exclude most charity shops from the scheme, as Dorset Council struggles to balance its budgets. They will still be able to claim mandatory relief of 80 per cent.

The council area currently has 369 organisations which get some form or rate relief, totalling £443,600 a year and costing the council an estimated £217,360.

All of those who receive the discretionary relief, of up to 20 per cent, were notified earlier this year that the system might change and that they would be given the chance to apply for relief again before April 1st 2020. There has also been a consultation exercise with key stakeholders, although only three of the 13 which were asked for their views, responded.

The majority said they were not in favour of discretionary rate relief going to charity shops although one of the three said it should be allowed if it was a local charity which was struggling to survive.

All of those who responded said that 20 per cent relief should continue to be awarded to village halls, managed by charities with open access policies; with similar views expressed for organisations such as the Scouts, Guides and youth clubs operated by charities and not for profit organisations.

There was also support for continuing relief for organisations who carried out function which would normally be offered by the council.

A Cabinet report by corporate development director Aidan Dunn concluded: “As the council now has to meet a large percentage of the cost of relief, Cabinet may feel that awards should only be made if it is in the council taxpayer’s interest to do so.”

His recommendations, to be considered at a meeting tomorrow, includes a recommendation that the council will not, generally, award discretionary rate relief for charity shops, although it may consider up to 20 per cent relief when the organisation is local; if it needs the relief to help it continue; or if it is in the council taxpayer’s interest to make the award.

There may also be a general tightening up of the rules where organisations have to be a registered charity or a not for profit group, with a look at each organisation’s open access policies, its finances and whether or not it shares it facilities with other community groups.

Councillors are also being asked to approve a system for applying for relief and an appeals process for those who are not successful.

The current rules say that charities and similar organisations are entitled to receive mandatory rate relief of 80% against their rates liability. The Local Government Finance Act 1988, provides councils with the discretion to award rates relief (up to a maximum of 20% in respect of charities and up to 100% in respect of other organisations) where it considers it to be appropriate.

Generally, 49% of the cost of awarding discretionary rate relief is borne by the council, 1% is borne by the Fire and Rescue Service and the remainder is met by central government.