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The Small Business Bonus Scheme


One of the recommendations of the 2017 Barclay Review of the Non-Domestic Rates System in Scotland was that an evaluation of the Small Business Bonus Scheme (SBBS) be undertaken. Five years on, it has finally arrived, all 232 pages of it. The Fraser of Allander Institute has laboured mightily – and lengthily – to produce its evaluation. And whilst not being unkind, after all that the answer is that we don’t know what, if any, effect the SBBS has. It is not that there is no effect, we do not know if there is one.

Review of the Small Business Bonus Scheme – available for download here

Now this is not the Fraser of Allander Institute’s fault. In glorious detail the authors take us through both the data difficulties in addressing their core – and on the surface simple, – questions and the extreme and frequent ways their research was delayed, particularly by the Covid19 pandemic and the lockdowns and work disruption caused. One can only imagine and sympathise with their frustrations, which come dripping off the pages.

The evaluation set out to find out who is getting the relief, its impacts and wider benefits and costs and if the current scheme could be improved. This matters, because non-domestic rates generally are a hot topic of contested debate (not least by me, though the 2020 Parliamentary “spat” showed people were interested, including in the SBBS), the SBBS is seen as something of a flagship scheme for small business and that in 2020 £279m was spent through the SBBS on qualifying businesses.

The six key findings of the Review are:

  1. Coverage of the SBBS in broad and usage has increased over time
  2. There is no evidence of enhanced outcomes from SBBS, but businesses perceive there to be benefits
  3. Businesses with similar rateable values vary substantially in size and other attributes
  4. The eligibility thresholds in SBBS are reflected in “bundling” in the Valuation Roll
  5. Data challenges preclude drawing robust conclusions
  6. Suggestions for data collection improvement to facilitate future evaluation are provided.

There are five recommendations which I won’t repeat here. Fundamentally the say don’t start from this position, we need a business not a property register, undertake appropriate, preferably legally enforced data collection on a regular basis and look out for any “game-playing” (my interpretation).

Now this all goes to reinforce a number of my prejudices. My concern about data is long-standing and the suggestions here, especially if geo-location is part of the data and the register being at least partially public, would be a huge step forward.

Secondly, this would also encourage a focus on the aims of this policy and a possible revision. Could we see a revision of SBBS made simpler for users and based on geography, size, sector and organisation type to help meet our wider national ambitions? After all the Barclay Review of five years ago did suggest a closer look at the Northern Ireland system (mentioned again in this Review) which provides a tighter focus.

Finally, hopefully it is another nail in the apparent untouchability status of the current approach to NDR – they really are unfit for so many reasons and purposes. We have to ask the questions Barclay was not set up to do and really question the relevance, balance and appropriateness of NDR’s as part of the fiscal mix and levers. Supporting particular types, sizes and locations of organisations would be so much more effective if we did this. Though to be fair to Barclay it did raise the the potential of introducing primary legislation enabling councils to use NDR to tackle out of town development and online development – this of course has not been taken up. With the recent publication of the Scottish Government and COSLA response to the Town Centre Action Plan Review which commits to looking at NDR and whether it is aligned with government policies, most notably in terms of the climate emergency, perhaps things are changing. As I have noted before for every encouragement (revised and targetted SBBS) there should be an equal discouragement (revised and targetted NDR system).

About Leigh Sparks

I am Professor of Retail Studies at the Institute for Retail Studies, University of Stirling, where I research and teach aspects of retailing and retail supply chains, alongside various colleagues. I am Chair of Scotland’s Towns Partnership. I am also a Deputy Principal of the University, with responsibility for Education and Students.


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