Row set to grow as CPPR denies producing £849 million business rate figure

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By a Newsnet reporter

The row over claims that businesses in Scotland face a massive increase to their business rates of £849 million over three years looked set to escalate today after a CPPR source denied the organisation had produced such a figure.

Newsnet Scotland has been told that the press release and report sent out to media organisations on 22nd September made no such claim of an £849 figure.

By a Newsnet reporter and Russell Bruce

The row over claims that businesses in Scotland face a massive increase to their business rates of £849 million over three years looked set to escalate today after a CPPR source denied the organisation had produced such a figure.

Newsnet Scotland has been told that the press release and report sent out to media organisations on 22nd September made no such claim of an £849 figure.

The £849 million figure has been used by several Scottish newspapers and broadcasters in order to attack the Scottish government’s three year spending plans.   The headlines and reports led to Finance Secretary John Swinney writing to a Scottish national newspaper and issuing statements denying the claims.

In a letter to the Herald newspaper Mr Swinney called the figure of £849m “misleading” and went on to explain that the real figure is £493m. Around half of this is due to the annual poundage rate RPI increases that are introduced north and south of the border and which businesses know they have to plan for.

So the actual increase as a consequence of inflation totals £250m over the three-year cycle not the treble plus figure implied in the CPPR report.

Regarding the remaining 50% of the projected increased revenue from Non-Domestic Rates Mr Swinney said: “reflects assumptions about the levels of business activity as the economy recovers and the impact of appeals losses.”

Mr Swinney insisted that the Scottish government will honour its pledge to peg the rate at the same level as in England.

Newsnet Scotland understands that the CPPR will respond to Mr Swinney’s letter with a letter of their own that they say will fully respond to all of the Finance Secretary’s points.

Responding to criticisms that there was no information on their business rate press release available on their website, the CPPR source explained that the document’s publication was delayed due to the ‘Glasgow weekend’ and that it will be published as soon as possible.

Newsnet Scotland was passed a copy of the report sent out to media organisations.

There is also questions over the alleged 23% rate increases, the figures given in the document appear to suggest 21.2% (4.2%, 7.6% and 9.4%) and are in fact based on the cash revenue increases and are not business rate increases as claimed by many commentators and journalists.

Additional comment by Russell Bruce

The CPPR report Scottish Government’s Draft Budget 2012-13 Briefing No 1 and subtitled Analysis of the Scottish Government’s Draft Budget 2012/13 issued to the media and which Newsnet has now received is completely misleading in the way it has been presented.

The CPPR economists have compared figures relating to the present 2011/12 financial year and then used these same figures as the baseline for the financial years 2012/13, 2013/14 and 2014/15.

By doing so they generated an increase of £92m for 2012/13, £264m for 2013/14 and £493m for 2014/15 when the actual increases are £92.5m, £172m and £229m which gives the correct total of £493m as presented by John Swinney in his Spending Review and reported yesterday by Newsnet.

The way 3 year spending reviews work is that Westminster indicates the budget coming to the Scottish Parliament for the coming three years.  John Swinney, knowing what the block grant will be, is then in a position to allocate this expenditure to Scottish Departments and the sums available to local government and to Scottish Government agencies like the Forestry Commission.

As all this information was available to the CPPR when they produced their paper they knew what the annual allocations to local government would be.

As we all did.

So why did CPPR not use the updated information supplied to us all on Wednesday and why did all the media collectively and independently add up CPPR’s misleading data conveniently shown in their report in bold type?

Rolling story Sunday 01.00 Russell Bruce

Because this story has serious implications for academic standards and due impartiality combined with the unquestioning acceptance of so many in the Scottish media of data produced by a body linked to The University of Glasgow, Newsnet Scotland will run this story with continuing reports.

The large number of relevant and informative comments posted by Newsnet readers has contributed greatly to the debate.

Rolling story Monday 1.30 Russell Bruce

The CPPR have said they will publish their Spending Review Briefing paper on their website this week. Like many of the commentators posting on this story I am a little surprised about the holiday weekend explanation as they issued the report to the media last Thursday.

I have asked Professor Harris, Cairncross Professor of Applied Economics at Glasgow University and Director of CPPR if they will take the opportunity to amend table 1 in their report correcting the information that so ‘misled’ our colleagues in the Scottish media prior to publishing it on the CPPR website.

We are all prone to making the occasional typos, and I am not exempt, but there is one on page 4 of the CPPR report with Freudian connotations.

Footnote 1 reads ‘At the time of writing, there was sum uncertainty over the capital budget lines.’ My emphasis.

I also find it surprising that the document is undated as this is standard practice to meet the conventions of academic referencing.

Rolling story Monday 23.59 Russell Bruce

Monday has come and gone and the CPPR remain unrepentant over the confusion they have created.

As expected their Spending Review Briefing, now published on their website, is as issued to the media last week without even the typos corrected or any explanation regarding the double counting.

A case of “I wisnae us mister. Must have been they folk in the media.”

Meanwhile The Scotsman today is still quoting the inflated £849m as having been identified by independent think tank CPPR.

Rolling story Tuesday 00.30 Russell Bruce

Meanwhile we have discovered that Professor Jo Armstrong and Professor John McLaren of the Centre for Public Policy for Regions (CPPR) will present their analysis of the Scottish Government’s recent Draft Budget and Spending Review in a briefing session to MSPs in one of the committee rooms in the Scottish Parliament on 4th October.

The Briefing Session has been arranged by the Scottish Parliament Information Centre (SPICe).

SPICe research briefings are for use by MSPs in support of parliamentary business in the Committees and in the Chamber and are always impartial.

The events of recent days raise the question – Do Professor Jo Armstrong and Professor John McLaren of the Centre for Public Policy for Regions do impartial in order to meet SPICe standards?