A new report has revealed that reducing the burden of business rates could unlock almost 4,000 jobs and £1.75bn development over the next five years – more than the combined development value of the Shard, Walkie Talkie and Cheesegrater. 

The report, launched by the British Property Federation, (BPF), British Council of Shopping Centers (BCSC) and British Council for Offices (BCO), written by Regeneris Consulting, has revealed that over a period of two to three years, approximately three quarters of any increase in business rates is transferred to landlords as occupiers push for lower rents.

The report shows that over the past three years, increases in business rates may have led to the economy missing out on as much as £670m of new development, and in addition may have resulted in as many as 6,000 fewer jobs among occupiers of property.

The organisations have further calculated that over the next five years projected increases in business rates could lead to approximately £1.75bn of new commercial property development being foregone. Rising rates will also reduce occupiers’ profits by approximately £585m, which could affect as many as 4,000 jobs.

Ahead of the outcome of the Government’s review of business rates, which is expected to report at Budget 2016, the organisastions have called on Government to reduce the burden of business rates and introduce more frequent revaluations.

Ion Fletcher, director of policy (finance) at the British Property Federation, said: “Business rates are often seen as a cost for occupiers; one that gets in the way of growing their businesses. This research shows that business rates also harm landlords and in particular they discourage new, economically valuable development.

“The government’s desire to maintain a high level of income from business rates, although understandable, means we are missing out on opportunities to provide new jobs, skills and growth in various sectors of the economy, not least construction and retail.”

Dr Stephen Rosevear, director at Regeneris Consulting, added:  “The study has important messages for policy makers, investors and occupiers alike, not least of which is the very real impact rising business rates could have on employment and development. This was a complex, but important project cutting across many of our core business areas. It is an extensive work, built on the best available data and analytical techniques.”