28th November 2017
Leisure and cultural venues currently run by council arm's-length bodies will continue to benefit from charity relief from non-domestic rates.
Following lengthy consultation with stakeholders, Finance Secretary Derek Mackay today confirmed that the Scottish Government will not be accepting the recommendation of the Barclay Review to end this benefit.
It means that local authority arm's-length external organisations (ALEOs) currently providing important leisure and cultural facilities will continue to benefit from reduced rates to support their activities.
Mr Mackay also announced he will take steps to offset the charity relief benefit to councils from any new ALEO expansion in future.
The Cabinet Secretary said: "We are committed to an active and healthy Scotland with a vibrant cultural life and we will continue to support local authorities in providing affordable ways for their communities to take part in culture and leisure activities.
"In my response to the Barclay review I made clear that this was a recommendation that I wished to engage on before coming to a conclusion. In these discussions I have heard a strong and consistent message about the importance of this benefit to sports and leisure facilities and to keeping the costs of these services affordable especially in disadvantaged and vulnerable communities.
“As a result I can confirm that the rates relief will remain in place for qualifying facilities operated by council ALEOs.
“However I am aware that some councils are planning to increase the numbers of ALEOs and the number of facilities no longer paying rates. It is my intention to mitigate against this by offsetting any further charity relief benefit to councils to deter future ALEO expansion."
The Highland Council and High Life Highland have warmly welcomed the decision announced today that the Scottish Government will not be accepting the recommendation of the Barclay Review to end the charity relief for arms-length bodies from non-domestic rates.
Leader of the Highland Council, Margaret Davidson said: “I wrote to Finance Secretary Derek Mackay to express our concerns and so I am very pleased to hear that he has decided not to go down this road.
“ Like many other local authorities across Scotland, Highland Council established an Arm's Length Organisation High Life Highland (HLH) to operate its leisure and cultural services. Its charitable status allows it to generate income through a number of its services which is then reinvested back into the work of the charity to cross-subsidise other areas of the organisation which cannot or should not charge. These areas include mainstream library services or delivering support and working with disadvantaged young people in communities across the Highlands and contribute to national wellbeing strategies around healthy living, obesity and social isolation.
“The removal of NDR exemptions would have resulted in an additional bill of £1.8M a year and would have had a very severe impact on Highland services when taken against an already challenging financial backdrop of reducing funding."
High Life Highland Chief Executive Ian Murray added:“I am very pleased that the Scottish Government has decided not to accept the Barclay recommendations associated with organisations such as HLH. The charity already contributes to national initiatives such as preventative health, obesity and social isolation; we look forward to a positive working relationship with the Government on these and other important priorities.”