In the past few days, we have seen articles from KentOnline and The Isle of Thanet News suggesting that the owners of Discovery Park in Sandwich, Kent have repurposed over 60 empty units at the business park into places of worship in an effort to save over £1,000,000 in business rates.
Supporting the needs of the workforce
A spokesperson for the business park has stated that they have "repurposed vacant spaces into places of worship to support the needs of our diverse workforce".
Members of our own team require clean, private places to worship on a daily basis. It is welcome to see providers make steps to accommodate and be mindful of the needs of staff working at their sites.
Furthermore, there are some real benefits to transforming empty spaces to places with ethical benefit; there are religious congregations that would love to make the most of a large space currently going to waste. Similarly, charities and other social enterprises can transform lifeless, empty areas into community hubs.
However, given the scale of the operation, one has to ask whether this is the true motivation here.
There is an element of debate about the scale of the operation as Discovery Park have stated the scheme covers less than a third of the 60+ units suggested by Dover District Council.
Whilst Discovery Park hosts over 3,500 members of staff and a singular dedicated prayer room could be deemed insufficient, even 20 dedicated spaces would appear to be excessive. After a couple of dedicated spaces, there is clearly significant diminishing returns and the public benefit can quickly starts to fade.
Further, it can be noted that on Discovery Park's amenity page it lists the park as offering a "faith room" [singular] and on a visitor brochure only a single faith room is listed as being present on site.
The other reason
All this leads to the question of why exactly would Discovery Park want to repurpose so many spaces.
The reason, in short, is to save business rates.
Presently, after an initial exempt period (either the first three or six months), property owners in England pay full business rates on empty properties. This creates a compound issue where the landlord is receiving no rental income and still paying substantial overheads.
This issue has spawned a multi-million pound market for finding solutions to this problem; ranging from snails, shifting boxes in and out of buildings, and now pop up places of worship.
Dover District Council's position is that Discovery Park are using a scheme to avoid rates and have not given effect to the pursued exemption. Dover council leader Kevin Mills has stated that the council is seeking to recover over £1,000,000 in unpaid rates relating to the units via enforcement action at the High Court.
How does this all work?
Under Schedule 5 of the Local Government Finance Act 1988, properties are exempt from rating and consequently attract no business rates charge if they are a place of public religious worship certified by the Registrar General.
The Discovery Park spokesperson has stated that they have repurposed the vacant spaces "in full accordance with interfaith organisation Faithful, which is supported by local authorities throughout the UK, and all necessary documentation has been submitted."
Faithful is partnered with Verity Commercial Services Limited. Verity, acting as agent for the owner of a building, went to court in 2024 against the City Of Bradford Metropolitan District Council under similar circumstances to the situation in Dover. The full details of which can be found in this informative post by the council's solicitors Greenhalgh Kerr.
Ultimately, the council succeeded in claiming unpaid rates resulting from Faithful's operation. Although, it has been stated there is intention for an appeal.
Whilst this is an initial win in the face of potential business rates avoidance, the reason the council were successful was not due to an outright dismissal of the scheme. The council succeeded as the court felt liability had not been correctly transferred from the property owner to the legal entity operating the scheme.
This would suggest the reason the scheme did not succeed in this instance was not due to a fundamental issue but possibly more a result of a failure of implementing the scheme correctly.
Extent and impact
A precursory look at FOI data provided by Local Authorities shows Room For Faith Limited, the entity typically granted a lease by the landlord under the Faithful system, are liable for business rates in properties in all corners of the country- from Wiltshire to Milton Keynes to Sunderland.
Further evidence of the scheme's scope can be shown by Faithful's Find A Property page showing their operation extends across England and into Wales and Scotland. It is unclear the total amount of business rates being mitigated via this scheme.
As we have said at the top of this post, there is real good to be done by repurposing empty space and some of the results can be really cool and very heart warming. It could very well be that Faithful is providing a welcome service across its locations.
The fact that repurposing empty property for beneficial causes also provide business rates mitigation for landlords does not diminish all ethical value or bankrupt any moral currency. Whether we like it or not, a financial motivation to do something good is what capitalism often demands. Landlords won't typically allow community centric projects to take over their vacant space for free without some upside for themselves.
From our perspective, there must be protections in place to ensure that these schemes are actually providing real public benefit and are not a manipulation or exploitation of the system for the sole reason of rates mitigation.
Problems arise as the mere optics of what has happened in Dover can create legitimate harm by undermining the trust between local authority and agent. That trust must exist for innovative solutions to societal issues, that repurposing empty property can provide, to thrive.
If, as Dover District Council appear to believe, this is purely an attempt to avoid paying business rates; who could blame Dover for being sceptical of other initiatives that help landlords mitigate their non-domestic liability - even if they provide clear, purposeful benefits to wider the community.
The only way we can achieve a healthy, collaborative system between agent and local authority is if agents act in good faith.
If you have any questions about any of the topics we have discussed, please feel free to reach out on 0208 0950 990 or info@hollowaybond.co.uk.
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The Dover situation was brought to the public eye due to the work of Kay Marsh from the refugee charity Samphire, we would encourage any reader to look at the work they do.
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