Deputy Mayor of Liverpool, Paul Brant, has contacted SevenStreets to put across the council’s perspective on the removal of favourable business rates to several organisations in the city, including Mello Mello.
Under rates relief schemes the council is able to offer 80% relief on business rates to any charity, with the shortfall made up by funding from central government.
The council also offers the relief to other organisation it deems suitable, though it must make up the shortfall in these rates from its own resources.
However, Brant says that cuts arising from austerity measures mean that the council will lose over half of its discretionary spend by 2017.
“This has meant difficult decisions over business rate relief, as we have looked to align applications with the priorities of the council, such as vulnerable adults and children,” says Brant.
“As a result, a very small number of organisations have lost out.”
The effect is that many organisations – including Mello Mello and Static Gallery – that currently enjoy the discretionary rates will no longer qualify for the 80% relief.
In the case of Mello Mello, its directors say the withdrawal of rates relief will result to a stiff increase in rates from around £6K per annum to around £30K per annum.
The Deputy Mayor says that the council has held talks with several of the affected organisations, including Mello Mello, and has encouraged some to re-form as charities.
Brant says that Mello Mello no longer qualifies for rates relief in its current form, a Community Interest Company (CIC), and that while the venue does provide artistic spaces at little or low cost, two thirds of their rates arise from the bar and café.
He adds that as there are many other bars and cafes in Ropewalks paying full business rates, the council’s support of Mello Mello through discretionary rates relief does not make for a level playing field.
However, the council says that it will support Mello Mello if the directors decide to turn the part of the business devoted to rehearsal and community space into a charity.
But Brant says that while the council wants to see Mello Mello prosper, it cannot justify giving continued support to the bar/café area “in any event”.