Comprehensive rates reform has long been at the forefront of the Northern Ireland Executive’s agenda, meaning the recent unveiling of Finance Minister Caoimhe Archibald’s new strategic roadmap may mark a pivotal moment for the region.
This ambitious framework aims to reshape revenue generation, with the rating system currently contributing £1.5 billion annually to essential public services.
Echoing the vision of former Finance Minister Máirtín Ó Muilleoir’s 2016 ‘A Rates Rethink: Spurring Economic Growth’, the roadmap seeks to balance fiscal sustainability with the urgent need for urban regeneration and economic vitality.
A core element of the roadmap is a comprehensive strategic review cycle, intended to scrutinise rating support measures.
While this thorough approach is welcome, it coincides with significant economic uncertainty and challenges for our towns and cities, most notably the prevalence of vacant properties.
Navigating this landscape will require a delicate balance between fiscal responsibility and fostering sustainable growth.
The Department of Finance (DoF) will conduct reviews of two critical rating policies in 2025/2026: Small Business Rate Relief (SBRR) and Non-Domestic Vacant Rating (NDVR).
Both have significant implications for businesses and urban regeneration.
SBRR, which applies a sliding scale of relief to properties with a net annual value under £15,000, has been crucial for many small enterprises.
However, NDVR, which offers limited relief for vacant properties, has attracted considerable scrutiny.
The growing number of vacant properties in our urban centres is a serious concern.
Empty storefronts and offices detract from urban vibrancy and represent a significant missed opportunity for economic regeneration.
While increasing NDVR liability is a potential response, policymakers will no doubt feel they should proceed cautiously.
Unintended consequences, such as incentivising the demolition of older, unoccupied buildings, could negatively impact our built heritage and urban character.
Instead of solely relying on increased liability, the Executive could explore innovative solutions.
Existing and potential capital grant funding powers could support the regeneration of older buildings nearing the end of their lifecycle.
Transforming these structures into valuable assets for communities and businesses can revitalise struggling urban centres while preserving historical and cultural significance, offering a more sustainable and positive outcome than demolition.
The SBRR review also presents an opportunity to ensure the policy remains effective. Given the evolving economic landscape, it is crucial to assess whether current thresholds and relief scales adequately support small businesses, especially considering inflationary pressures and shifting market dynamics.
A targeted review would ensure the relief is focused where it is most needed and delivers the greatest economic impact.
Ultimately, the strategic roadmap’s success hinges on balancing essential revenue generation for public services with fostering economic growth and urban revitalisation.
By adopting a collaborative and forward-thinking approach, the executive can create a fairer rates system that not only sustains public services but also unlocks the full potential of our towns, cities, and communities.
A carefully considered and inclusive approach to rates reform can be a catalyst for sustainable economic growth in the region.
Mark Jameson is partner in property at Arthur Cox NI
