Ray Hurcombe argues that changing the business rates regime in Wales will undermine care delivered by voluntary organisations
The income Tŷ Hafan derives from its 21 charity shops across south and mid Wales is vital to enable it to continue to help the life-limited children and their families the charity works with. Fundraising has been challenging during the economic downturn, but the return from our shops has increased – to £460,000 last year – as people are seeking better value. We also employ nearly 50 staff, provide a hub for over 350 volunteers and recycle 320 tonnes of unsaleable goods.
The charity was concerned that Professor Brian Morgan’s report commissioned by the Welsh Government on Business Rates recommended limiting the rate relief charity shops receive and the locations we can rent. Particularly, the review group failed to consult widely with the charitable sector, it did not take fully into account evidence showing that the presence of charity shops on the high street and it is not limiting opportunities for other retailers.
It is welcome, therefore, that Edwina Hart, the Minister for Business, Enterprise, Technology and Science, has asked Professor Morgan to take another look at the impact of the proposed changes.
One of the arguments made for making the proposed changes was that charity shops are crowding out other retailers. We can show that this is not the case. Our new shops have opened in empty, often dilapidated premises, and we spend up to £30,000 on each unit to bring them up to standard. Many of our shops would be empty if we pulled out, and we know that we have helped rejuvenate high street shopping areas in locations with high vacancy rates such as Merthyr Tydfil, Neath, Barry, Newport and Llanelli.
We would all like to see more vibrant high streets with a mix of independent retailers providing what our communities want. Where we differ from the conclusions of the review group is that we don’t believe this will be achieved by closing some of our shops. Only 3 per cent of the goods we sell are described as new – mostly Christmas cards – so we are not competing directly with independent retailers, or ‘proper’ shops, as the review group claimed in their report.
And we are not clear how the decisions will be made about what is the right sort of outlet to have in which street. Should we be restricting the number of payday loan providers or bookmakers? How many is the right number of charity shops in one street?
What we do know is that if the current proposals are implemented, they will have a seriously detrimental impact on our ability to provide care for life limited children.
The proposals would incur an immediate cost to Tŷ Hafan in the region of £100,000 each year. We would likely have to close three Tŷ Hafan shops, making six staff redundant and losing 60 volunteers, and leaving three retail units empty in areas with vacancy rates of more than 20 per cent. The reduction in income would be equivalent to the cost of providing specialist care for six to seven children per year.
A recent poll by Mori showed 78 per cent of people in Wales thought that charity shops are a positive presence on the high street. Indeed, 6,250 people visiting Tŷ Hafan’s shops recently signed a petition against plans to reduce charity rates relief. Taxing charities in a downturn is not the answer to rejuvenating Welsh high streets.