Green energy boss hits out at Scottish Government after budget hopes ‘turn to dust’
Feb 1st, 2021
PRESS RELEASE
The boss of one of Scotland’s most remote and innovative rural businesses says he is bitterly disappointed at the Scottish Government’s failure to resolve a long-running business rates saga in the Budget.
Hugh Raven says his business has been left facing a financial crisis after being clobbered by a massive tax hit for following government advice and doing its best to be a good corporate citizen.
The company at Ardtornish, Morvern, is facing serious difficulties after becoming the highest rate-payer proportionate to turnover in Scotland because it complied with the Scottish Government’s advice to go green and develop renewable energy.
The owners had been led to believe that a solution might come with an announcement in the Scottish Government’s budget last week. But despite a solution which benefits the vast majority of small hydro operators in Scotland and extends rates relief for the next decade, ministers have failed to resolve the unintended anomaly which has left Ardtornish with a bill of more than £500,000 this year.
Mr Raven, managing director of Ardtornish, said: “In our extensive discussions with the Scottish Government, we were given hope that they would use this opportunity to address our problems and we are extremely disappointed and shocked that they have chosen not to do so.
“As well as being the cabinet secretary responsible, Kate Forbes is also our constituency MSP. I will be seeking an emergency meeting with her to discuss what can be done now to stave off very, very serious damage to our business which will, without doubt, impact the local community here if it’s not resolved immediately. We were given positive signs by the Scottish Government, but our hopes have now turned to dust.”
Encouraged by the Scottish and UK governments, the company, in one of Scotland’s most remote communities, has invested heavily in hydropower and built five small hydro schemes which between them produce 3.4 megawatts of energy, enough to power several thousand homes.
Mr Raven added: “We work hard to be a good corporate citizen. We don’t always succeed but we have followed closely changing government policy and advice – and as a result we have been absolutely hammered.
“We think we are the highest rate-payer proportionate to turnover in Scotland, at £380,000 in rates demands for 2020/21. Our appeals for a level playing field and a sensible solution have so far fallen on deaf ministerial ears.”
In addition to the whopping and unreasonable rates bill, Ardtornish faces a further penalty – with repayment of hydro rates relief it was wrongly awarded in a previous year worth an extra £145,000, meaning well over £500,000 in payments this year. As a proportion of enterprise turnover its rates are over 15% of revenue – well over three times that of retail operators.
Earlier this year small hydro operators across Scotland warned that they were facing major economic uncertainty unless Scottish ministers took action to reduce punitive business rates imposed on the sector. Ministers have taken a year to come up with a solution following a disappointing set of recommendations from the Tretton Review, published a year ago. But the rates relief extension, until 2032, benefits only 95% of operators, not all.
Simon Hamlyn, CEO of the British Hydropower Association, said: “A handful of operators are in a very precarious financial position because of state aid legislation and we urge the Scottish Government to listen again to our pleas to help them, and to deal urgently with this issue before those businesses have to consider their futures. Essentially, the government is discriminating against a handful of businesses like Ardtornish, which fall outside the relief scheme for one reason or another. The relief scheme should and must apply to all operators.
“With the political will, particularly in the run up to COP26 and the government keen to highlight its green credentials, ministers should give hydro operators all the support that they need.”
In building 3.4MW of hydro, Ardtornish was responding to encouragement from the Scottish Government and the UK government, which provided financial incentives through the Feed-in Tariff.
In addition, Ardtornish has followed carefully the land reform programme, including, for example, on community consultation on decisions relating to land use, offering land for sale to local community organisations, renting land for community use such as allotments, grazing leases, and pontoon and harbour developments.
In providing affordable housing, within Ardtornish’s twenty-house Achabeag housing settlement, seven units are either houses for rent on the local affordable housing market or serviced house plots for sale to local buyers at affordable prices. Developed in conjunction with the local housing trust, that level of provision is significantly higher than the guideline for affordable housing in new developments.
The owners say Ardtornish has tried to act in a way that is consistent with the Scottish Government’s intentions for landowners and managers.
Raven concludes: “The Scottish Government’s recent update to its climate change plan places huge emphasis on fairness and the importance of private investment in our country’s transition to net zero emissions. The rates we are paying – at many times the level paid by other businesses – are grossly unfair. For a fragile business like ours, it seems helping Scotland reach net zero comes at a ruinous price.
“In the run up to COP26 in November in Glasgow, surely this is not a reasonable or sensible way for Scottish ministers to behave and treat an innovative remote, rural business. Failure to resolve this issue, and to do so immediately and urgently, will have a very big direct impact on rural jobs, the local community and the Scottish Government’s highly cherished green credentials.”
For media enquiries, please contact
Hugh Raven – MD, Ardtornish
Email – hugh@ardtornish.co.uk
Mob: 07775 521789
Simon Hamlyn, CEO, British Hydropower Association
Email: simon.hamlyn@british-hydro.org
Mob: 07788 278422
Tim Reid – PR Consultant
Email: tim@timreidmedia.com
Mob: 07720 414205
