Chamber and committees

It is over to the minister—

I appreciate the minister’s response and the helpful conversations that he and I have had with each other and with representatives of COSLA. I recognise that the bill might not be the optimal vehicle to fix the issue, given time considerations and the need to keep the bill streamlined.

Nonetheless, I am very vexed by the issue, and I am keen to find a solution to it sooner rather than later. Although I am not minded to take forward the amendments because of the complicating factors that they might introduce, I would like to see a practical solution reached—either with COSLA or, potentially, through other legislation, such as the Community Wealth Building (Scotland) Bill—sooner rather than later.

Amendment 1, by agreement, withdrawn.

Amendment 2 not moved.

Section 1 agreed to.

After section 1

I appreciate the opportunity to speak on this group of amendments. Although these are unexpected circumstances, they enable me to bring to light a long-running issue that I have been dealing with in Glasgow over the past 18 months or so. Glasgow City Council’s removal of the previous exemption from non-domestic rates for vacant listed buildings has generally been a positive thing for the city in creating incentives for building owners to utilise vacant floor space and to bring listed buildings that were derelict back into productive use. We have seen a flurry of planning applications going through the council in relation to that. The issue has been a long-running one in Glasgow, where there is enough empty floor space in the city centre to fill the Empire State building in New York.

However, a number of complications have arisen, and the council has said that what has happened was unforeseen. It is said that the road to hell is paved with good intentions. It is important for all levels of government to be aware of such issues as they arise and to adjust accordingly to ensure that the public good is maintained as best it can be.

An issue has arisen in circumstances in which, for example, a building preservation trust or a charity has acquired a listed building that is vacant or derelict and that would require a lot of investment to bring it back into productive use. It might be the case that the organisation has secured grant funding, but, unfortunately, in undertaking the restoration programme, the grant funding has fallen short of the cost of the renovation, so the project has stalled. The organisation is then levied with building rates for a property that it cannot occupy or generate revenue from, which threatens its viability as a going concern. That is exactly what has happened to the Govanhill Baths Building Preservation Trust. I am sure that we all agree that it would be absurd to see the whole thing unravelling after all that effort.

The same thing is happening with commercial property. For example, Stephen Lewis of HFD Property Group, who has been looking at a listed property in the city centre with a view to renovating it to bring it back into productive use, has said that he did not know that he was going to be charged business rates for several years, when it will take a year to get planning consent and another two years to renovate the building. He did not programme that into his business plan when he was looking to renovate that building.

Mr Lewis says that it is absurd that, with, say, the old Clydesdale Bank building on St Vincent Place, if he converted it into a hotel, the hotel could move in and not have to pay rates for a year, even though it would not need that exemption, because it would be generating revenue. The incentives are all in the wrong place.

I hope that the minister can see that there are scenarios in which the current arrangements do not work well. As a result, the market for listed buildings in Glasgow has frozen. There is no desire from people to buy those buildings.

I met a guy who was looking to buy the old Tusk nightclub and the Waverley tea room in Shawlands. He was really enthusiastic when I first met him. He told me that the price had just been reduced massively and that it could be a real bargain for him. I informed him that the reason why the owner had reduced the price was that they were getting charged for business rates on the empty building. I could see his face drop, and he said, “I can’t afford to take the hit on business rates for two or three years until I get planning consent and renovate it”. His interest suddenly ebbed away and that building still sits there derelict—it is a blight on the public realm and an underutilised economic asset.

My amendments are probing amendments to illustrate to the Government some of the unintended consequences of the removal of the exemption, as devolved to local authorities. We have seen some local authorities do it—Glasgow City Council being one of the most notable ones. Although the approach has been generally beneficial, it has caused problems. I hope that the Government is alive to those problems and that we can work collaboratively with the Convention of Scottish Local Authorities and local authorities to address them.

I know that Glasgow is considering a recommended solution. The proposal, which comes from the built heritage commission for Glasgow, is that empty property relief be granted for listed buildings at 100 per cent for a period of up to two years from the date of acquisition, on condition of demonstrating real development progress. That would include design progress—for example, appointing a design team, commissioning design work and incurring and paying design team fees—and a programme that can be linked to Royal Institute of British Architects stages of development; planning progress, including a pre-application discussion with the planning authority or an application for planning consent, with planning queries being addressed timeously; and construction progress, including showing that tenders are under way and that contractors are appointed.

Those criteria would be set to avoid an owner giving the appearance of developing a project without there being any real action towards getting on site. It would avoid bad-faith acting from speculators or land bankers. It is also important to note that, once construction is under way, the reliefs would be granted for premises that are under construction. There would be a long stop date of two years, with agreed milestones if insufficient progress had been made. That would create really powerful incentives for owners to bring the buildings to market and to get renovations under way.

More detailed criteria could be involved; for example, if a charitable organisation is trying to restore a building but its grant funding falls short, it would be crazy for the Government to fund it through grants on the one hand but tax those away with rates on the other. That would undermine the purpose of a charity trying to save a listed building that might provide great community benefits.

I mentioned the example of Govanhill baths and some of the city centre projects that have been stalled or frustrated by the rates issue. There is also Flemington house in Springburn. Marcus Dean, who did up the Abbey Mill business centre in Paisley, took the building on when Glasgow Kelvin College left it about 15 years ago. About a third of the building was turned into a business centre and various organisations were located in it. Two thirds of the floor space was still unused, because it was very expensive to deal with the asbestos, the electrics and so on. Marcus Dean said that he was making decent enough money from rental income on the building to wash its façade, but then he got suddenly hammered with a rates bill for all the empty floor space. That sank the business model overnight, and he had to evict the entire building. Set designers, studio people, artists and charities were all kicked out, because he can claim a year’s temporary exemption for a fully empty building. That permutation is crazy. It has resulted in a stupid outcome for Springburn, it has undermined the local economy and a lot of small businesses and organisations are really stressed by it.

Marcus Dean is faced with the dilemma of what to do with the empty building. The only thing that he can do is convert it into student flats, because it is single aspect. He cannot create dual aspects in the building because of the listed building constraints. In that scenario, it is obvious that he should be able to work with the local authority, which would realise that he is trying to do the right thing and is keeping the building wind and watertight and is maintaining it to a baseline level. The council would see that the building has been used and that the owner is aiming to build towards full restoration, and would therefore give him some leeway.

Currently, the system is purely binary—it is on or off; the owner either gets hammered with full rates or they do not. There needs to be a lot more slack in the system and a lot more attentiveness to the permutations and to the difficulties and complexities with listed buildings. That is what my amendments are all about. I am trying to signal to the Government that there are practical issues with how the removal of the exemption has been implemented in the past couple of years, particularly in Glasgow.

Glasgow City Council is making an effort to work through this, and we need that to be standard best practice across Scotland. That should involve working with COSLA. I hope that the Government can take a convening role in trying to make that work sooner rather than later, because we are seeing a lot of projects in the here and now that are being strained and damaged by it. The Springburn example is just the latest example of the issue. It is very frustrating to act as a glorified estate agent for charities, trying to find new accommodation for them. Let us try to avoid the problem at source.

I move amendment 1.

To ask the Scottish Government, further to its previous answer on 12 November, whether it will take the lead in establishing a common housing register in Glasgow to simplify applications and address the city’s long social housing waiting lists. (S6O-05219)

Establishing a common housing register has been a long-standing aspiration for more than 20 years since the transfer of the council’s housing stock. However, there are now more than 60 social housing providers in Glasgow, making such a register tricky to co-ordinate. The council aspires to set up a register, but it has found it very difficult logistically to achieve that. It would be good if the Government could step in and take a convening role. We know that, with more than 10,000 people in temporary accommodation who are waiting for housing or who have made an emergency application, there is real pressure on housing in Glasgow. A common housing register could hugely improve efficiency and reduce the costs for individual RSLs. It would be a worthwhile measure that could have a big impact.

I thank the member for Eastwood for lodging the motion for debate.

The member for Cumbernauld and Kilsyth summarised the issue succinctly when he talked about the wider regional issue that is facing Glasgow. The Clyde tunnel is an important piece of infrastructure for the entire Glasgow city region area, but funding and maintaining it is the responsibility of Glasgow City Council alone. That is symptomatic of a bigger challenge for the Glasgow city region. It is the fourth-largest metropolitan area in the United Kingdom, but, with no devolution deal or elected mayor, its governance is fragmented across at least eight local authorities, and it has limited access to the types of economic growth policy levers and funding that the big city regions in England now enjoy.

The current Glasgow city deal covers eight local authorities in the city region, but there is no statutory agreement with the accompanying powers. With regard to the Clyde tunnel, that means that while Glasgow City Council shoulders the financial burden of maintaining that piece of critical infrastructure, which benefits the whole city region, neighbouring local authorities do not have a say in how the tunnel is funded or in decisions on its future.

The member for Eastwood said that I should rue my position on the issue, but I think that he ought to rue his party’s position 30 years ago, when it vindictively dismantled the Strathclyde region. At the time, John Major described Strathclyde as an “abomination”, but we are now seeing the unintended consequences of that foolish, self-interested decision.

The Scottish Government’s current position is that the Clyde tunnel is a local Glasgow City Council issue, but this debate has made it clear that it is not. I am sure that members across the chamber will agree that the injustice of the status quo is simply unsustainable. Glasgow City Council has had the largest cut to its budget of any local authority in Scotland, and it does not receive a proportionate share of the business rates revenue that is generated within the city boundary. The Glasgow roads budget has also been disproportionately cut as a consequence.

The Clyde tunnel maintenance budget now consumes 10 per cent of the entire roads maintenance budget for the city. That is 762 metres of road out of 1.8 million metres of road in the city, so 10 per cent of the budget is going on 0.04 per cent of the road network. That is certainly unsustainable. The impact is accentuated from a social justice point of view because Glasgow has the lowest car ownership in Scotland, with only 376 cars per 1,000 residents, in comparison with 678 cars per 1,000 people in Renfrewshire.

Districts with the lowest rates of car ownership in the country, such as Drumchapel and Govan, have to pay for the tunnel’s maintenance via higher council tax rates, while the richest communities in Scotland with the highest levels of car ownership, such as Bearsden and Kilmacolm, enjoy the tunnel free of charge and generally have lower council tax rates as a result.

I see four solutions to the problem, which is unsustainable and socially unjust. One solution is adoption of the Clyde tunnel as a national trunk road by Transport Scotland, in the same way as the Kingston bridge and the Erskine bridge have been adopted. However, that solution has been repeatedly resisted by the Scottish Government, despite calls over the years from me and other MSPs for it to be pursued.

A second solution is adoption of the Clyde tunnel as a regional transport asset by the city region councils, co-funded via Strathclyde Partnership for Transport or a new combined authority, restoring the approach that existed via the Strathclyde roads system from 1975 to 1996. However, that is not under consideration by the Scottish Government.

A third option is an agreement by the Scottish Government and the Convention of Scottish Local Authorities to provide additional funding for Glasgow to cover the £820,000-a-year shortfall in the baseline local roads allocation in order to maintain the tunnel. However, the Scottish Government’s position is that it must be funded through the general budget allocation that is provided to Glasgow City Council; I think that that is completely absurd.

Finally, we could resort to the unilateral introduction by Glasgow City Council of a number-plate recognition camera toll system. I think that that is the least desirable of all the options, but it is certainly the only one that is available to the council. Nevertheless, it would require a statutory instrument and regulatory framework to be put before the Parliament by ministers, and no discussion has taken place between Glasgow City Council and the Scottish Government so far.

There is an opportunity to address the issue. In my view, the best option is to move to a combined authority approach for the Glasgow city region, which is long overdue and would certainly unleash a lot of potential across Glasgow and the greater Glasgow area. I would like the Government to look seriously at that, because—as has been mentioned—the issue is not just the boundaries or the tunnel, but a whole lot of other things—

I recognise the point that the member makes that there is an unusual relationship in which the corporate body sets the overall budget but, notionally, the member of the Scottish Parliament is the direct employer of the staff. However, it would be helpful and a useful innovation for the corporate body to establish a relationship with the trade unions that represent parliamentary staff, at least to understand some of their concerns about cost of living issues and pressures.

It would also be helpful for the corporate body to note that a significant delta has emerged between the staffing budget that is available to Scottish members of the United Kingdom Parliament, which currently sits at £263,370, and that available to members of the Scottish Parliament, who have at their disposal only £162,000 as a baseline budget. That creates a lot of divergence in parliamentary employment opportunities and career progression within the Scottish Parliament vis-à-vis similar opportunities.

I encourage Jackson Carlaw to consider those pressures.

It is welcome that the Scottish Government is exploring innovative ways of raising extra capital in addition to the normal method of raising it through the national loans fund. In what scenarios does the Deputy First Minister envisage bonds being issued? Will they be issued in cases where there are high returns, such as investment in Clyde metro or expansion of the Scottish Event Campus? Could they also be used for national health service projects such as the new institute of neurological sciences in Glasgow?

Will the cabinet secretary take an intervention?

Will the member take an intervention?