WORCESTER has missed out on almost a million pounds in the last five years from lost business rates as the hidden cost of empty shops has been revealed.

Government figures show empty businesses in the city have cost the taxpayer nearly £9.5 million since 2014 in lost business rates.

Worcester City Council has said the millions lost through tax relief schemes does not paint the full picture for the city as it only receives a fraction of the money it collects – meaning the council only lost out on around £950,000 from rates.

However, the figure lost from the wider county is much higher as some of the money from business rates go to Worcestershire County Council and the fire authority too.

Almost £1.9 million is lost every year on average, according to figures provided by the Department for Housing and the BBC Shared Data Unit.

Under law, empty business premises cannot be taxed under the business rates system for at least three months. After this time, most property owners must pay full business rates.

A city council spokesman said: “The city council has an important role to play in ensuring that Worcester maintains a vibrant economy with an appealing and attractive city centre offer.

“We work alongside landowners, businesses, the BID, Worcestershire LEP and other partners to help keep the number of empty shops as low as possible, for example by co-funding the revamp of The Shambles and Cathedral Square.

“Although the city council issues bills for business rates, half of all rates collected are retained by central government, with the remainder being returned to the city council, Worcestershire County Council and the fire authority.

“Worcester City Council retains about 10 per cent of the business rates it collects.”

At the end of 2018, the county was successful in its bid to become part of a one-year pilot scheme that allowed 75 per cent of business rates to stay in Worcestershire.

The county’s six district councils, including Worcester City Council, agreed to allow the predicted £4 million extra to be spent on funding social care.

Cllr Adrian Gregson, deputy leader of the city council and member of the Worcester BID board, said the potential income lost from business rates and empty shops were two different issues.

He said both were “major concerns” but the biggest priority was making the city centre as vibrant and attractive to residents and visitors as possible and encouraging people to shop on the High Street rather than online.

He said: “The most important issue is that the shops are empty.

“What we are trying to do from a council and a BID point of view is encourage businesses to provide the best service they can and take up every opportunity to get people to come to the city.

“The way people shop is changing, not just in Worcester and on the High Street, but across the country. If you look at footfall and other figures, then we are not doing dramatically badly.

“The whole nature of retail in the country has changed so we have to find ways of dealing with that.”

Cllr Gregson said local government funding cuts meant that even if the council could keep more – or all – of the income it generates from business rates, the money would still be prioritised in paying for vital services run by the county council, such as social care, and not necessarily spent on helping the city’s High Street.

He said the “dilatory,” or slow to act, way in which the government had not acted over properly funding local government meant everything else suffered.

He said: “Worcestershire County Council isn’t adequately funded. Until local government is properly funded by central government, there will always a problem like this and it will continue to be a problem. I can’t see it going away.”

Cllr Chris Mitchell, chairman of the council’s planning committee, said a potential solution to the problem would be if business rates were locally governed and the council could keep more, or all, of its share.