Small firms fear worst as council charges double
Bosses battle to save future in face of unprecedented rises
DESPAIRING small business owners in Sparkbrook have hit out after the council imposed a huge hike in charges – driving out at least one trader.
The huge rise in the quarterly service charge imposed on tenants operating on the Montgomery Street trading estate is ‘unprecedented’, say the struggling traders.
They are now considering a legal challenge, claiming the rise is part of an attempt to get rid of tenants who might complicate a potential £1 million sell-off of the estate. The council denies the claims.
Alex McDonagh, a vegan food producer and one of five tenant business owners to set up a cooperative to unite their efforts, said the way the estate’s businesses have been treated has been ‘appalling’. They say they believe if they took the council to a judicial review over their treatment they would win.
Tom Thompson, 57, says the rise in service charges – for his business an increase of nearly £500 a quarter – comes on top of the already rising cost of running his organic veg and fruit delivery firm Vegetropolis. It has finally broken his resolve.
After nine years he is giving notice to quit and fears other businesses on the run-down estate might follow.
“We have been fighting to save this estate from developers for nearly three years. We have set up a cooperative and wanted to buy the estate ourselves once we heard it was going up for sale, to preserve it for other businesses in the future,” said Mr Thompson.
“Now we feel we have been ripped off again, with our service charge going up 123% in just a year. It makes no sense – why would a Labour council, and one which claims to be part of the Cooperative movement, not want to support us?
“Whatever their intention, the outcome
Why would a Labour council, and one which claims to be part of the Cooperative movement, not want to support us? Tom Thompson
is that we are suffering because of their actions.”
The canalside site is one of the council’s commercial assets, earmarked for sale to the highest bidder in the hope of attracting an industrial investor with the means to upgrade the estate.
But there are fears it will eventually become part of a grander development scheme.
It first went on the market in 2019, when it appeared in a brochure for auction without the tenants being told.
The group of businesses approached the council and asked them to back their alternative vision of creating a non-profit business hub, owned and run by tenants, rather than selling it off to a developer.
They thought they had got together the money they would need to submit a viable new bid, based on the 2019 planned sale value of less than £500,000, said Mr McDonagh.
But last year they learned the
value of the site had rocketed to close to £1 million – putting them out of the picture.
The council also told them they would not take account of the ‘social value’ of the co-operative’s bid.
Traders based on the estate include a cake baker, vegan food producer, metal polisher, printer, Vespa scooter refurbisher, organic veg delivery firm, laundry, youth training centre and chocolate maker. Together around 80 jobs are at stake.
The tenants say the recent rises in service charges amount in all to 123% in a year. For Mr Thompson, the most recent quarterly service charges bill was £1,471 – up from £1,000 the quarter before.
The tenants’ group have now submitted a complaint stating the council has “failed to meet the statutory requirement under the Landlord and Tenants Act 1985 to allow us as tenants access to inspect the accounts, receipts and relevant documents associated with the Service Charges.”
They say the council has not produced details of how the service charges and utility bill payments have been calculated.