Shard attraction pays no business rates due to bureaucratic logjam

Since it opened in February the Shard's viewing gallery has not paid a pound in business rates, Southwark Council has revealed – although the authority is keen to stress that the attraction's operators are not to blame.

Cllr Richard Livingstone, Southwark's cabinet member for finance and resources, has written to communities secretary Eric Pickles to alert him to the backlog of new buildings awaiting assessment for business rate liability by the the Valuation Office Agency, part of HM Revenue and Customs.

The borough says it now has a long list of new buildings that have not been entered into the rating list including the Shard.

From the start of this month the Government changed the way business rates are distributed, allowing councils to retain a proportion of the money raised locally. Councils in London can retain up to 30 per cent of any growth.

20 per cent goes to the Greater London Authority and the remaining 50 per cent to central government.

With the delays in processing the valuation of new commercial buildings, Southwark and councils across the country are losing out on substantial amounts of money that they should receive.

Cllr Richard Livingstone said: "Councils are losing out financially in so many ways at the moment, with unprecedented budget cuts, and increasing demands on our resources.

"Southwark has been one of the hardest hit. In light of that, the opportunity to keep some of the business rates that we generate through drawing businesses into the borough is hugely important to us.

"But unless national bodies like the Valuation Office Agency get their act together, local councils like us are going to continue to lose out in this way too. The impact will be felt across the country, not just in Southwark.

"I don't doubt that the businesses we have in the borough – many of them global organisations – are more than happy to pay their rates and would rather do so now than let debts build up.

"And central Government, the council and the GLA can all benefit from their contributions. But due to administrative failings, we are all missing out on this much-needed funding.

"Although we will hopefully get hold of this money at some point once the Valuation Office Agency has cleared the backlog, that doesn't help us now, when we aren't getting the money we desperately need to provide essential services to residents and to help plan to manage the cuts that have been passed on to the council. I hope that central government will take notice of the issue we've raised and get this sorted out immediately."

A spokesman for the Valuation Office Agency said: "VOA are currently working on the assessments for the The Shard – parts of which are not yet finished – and have already completed the work for the retail units.

"The time taken to complete a valuation will depend on its complexity. We are committed to working with local authorities to ensure the rating list is regularly and promptly updated as changes occur."