Anger has erupted after cash-strapped Blackpool Council was ordered to pay back hundreds of thousands of pounds in business rates.
A London-based property management company has won exemption from paying rates of £236,000-a-year on the former government offices it owns in North Shore.
This follows a ruling by an independent tribunal which reduced the rateable value of the Mexford House offices from £490,000 to just £1.
Town hall bosses are livid, not only because they will lose future business rates, but by the fact the decision has been backdated to April 1, 2010.
This means the council, which is currently axing hundreds of jobs and slashing services as part of multi-million pound budget cuts, must now refund the rates it has already collected over the last four years from Mexford House owners Telereal Trillium.
Town hall leader, Coun Simon Blackburn, today branded the decision a “kick in the teeth”.
And hard-pressed businesses in the town said it was “unfair” the huge building – which has a market value of around £2.75m – was now exempt from the charges.
The three-storey Mexford House was occupied by staff working for the Department for Work and Pensions and Inland Revenue before its closure in 2009.
On the Valuation Office Agency’s (VOA) website the building is now described as “obsolete”.
Coun Blackburn has called for an urgent investigation.
He has written to Communities and Local Government minister Eric Pickles to raise his concerns about the situation.
Coun Blackburn said: “I cannot even begin to understand why the Department for Work and Pensions is exempt from business rates to the tune of £236,000 a year when every other Blackpool business has to pay it, including ourselves.
“It seems they have used every trick in the book to avoid paying, and now a 63,000sq ft vacant property has a rateable value of £1 – it beggars belief.
“It’s a kick in the teeth to all the other businesses that are trying to sell vacant premises while still paying the full business rates.”
Under normal circumstances, owners of empty properties are liable to pay business rates after three months.
But in coming to its decision the Valuation Tribunal said it was satisfied Telereal Trillium had shown “there was no market demand for the appeal property”.
In its written conclusion, the panel added: “The appeal property has been on the market for more than five years which further showed that there was no demand, even on a floor by floor, wing by wing basis.
“As valuation officers had placed nominal values on other large offices where there was no demand, the panel decided to reduce the appeal property’s assessment to a nominal value, say rateable value £1.”
Now the VOA, which is a Government department, is appealing the decision.
A spokesman said: “We always review Valuation Tribunal decisions in detail before deciding whether or not to make an appeal.
“We have appealed against the Valuation Tribunal’s decision so it would be inappropriate to comment further at this time.”
A spokesman for Mr Pickles’ department confirmed the decision was being challenged.
Business owners in Blackpool said they were astonished the owners of Mexford House, on Mexford Avenue, did not have to pay business rates.
Susanne Johnson, chairman of Blackpool and Wyre Federation for Small Business, and who runs Johnson’s Haberdashers of Bond Street, South Shore, said: “Business rates need to be fair across the board, and this doesn’t sound fair.
“Businesses which are doing their bit, employing people and helping the economy – they have to pay their business rates.
“Blackpool Council is having to deal with big cuts to its budget, so any loss of income if some businesses don’t have to pay, will be felt.”
Darren Thickett, who owns Dolls Houses Are Us on Waterloo Road, South Shore, said: “There are lots of buildings in Blackpool which are empty, and which could be described as obsolete, so when they hear about this, many other businesses could be trying to do the same thing.
“Where would that leave the council in terms of the money it gets from business rates?
“Also if these offices are obsolete, why don’t they just knock them down?”
Blackpool North and Cleveleys MP Paul Maynard (pictured) said: “I have no idea whether Telereal Trillium is paying the correct amount in rates or not, so it is right this should be decided by the relevant independent body.
“Of greater concern to me is to ensure the potential Mexford House represents for job creation is realised.
“I would urge the council to work with Telereal Trillium to find creative solutions such as a start-up hub for local entrepreneurs that would be to everyone’s benefit.”
A spokesman for Telereal Trillium, which was formed in 1997 to acquire the DWP’s property portfolio, said: “As the decision is currently being appealed, we are unable to comment at this time.”