The owner of a Highland renewable energy firm is appealing for a review over “crippling” business rates which have forced him to make redundancies.
Hugh Raven is managing director of Ardtornish, which runs five hydropower schemes and self-catering accommodation.
The Lochaber business says it has been hit by “astronomical” rates bills, averaging around £500,000 a year.
Ardtornish Estate was one of a handful of small hydro scheme operators to fall outwith criteria to qualify for a 10-year rates relief extension announced by the Scottish Government.
The business employs 22 people, however has made four redundancies in recent times in order to stabilise.
Hydro firms will shut if nothing is done, says Ardtornish managing director
Mr Raven is appealing the rates demand and is also calling on the Scottish Government to change it policy.
He warns that a lack of support for those who missed out on the rates relief could see them shut their doors.
Mr Raven said: “The valuation assessor has set absolutely crippling rates for hydropower firms.
“To the Scottish Government’s credit, it acted quickly and jumped in with a rates relief scheme to counteract the damaging effects. However, it also decided to limit eligibility.
“Because we have five hydro schemes, we quickly exceed the maximum eligibility.
“They don’t need to do that – they could award us rates relief in full. We would still pay over £250,000 rates a year – which would seem fair, and we would not complain.
“There weren’t many hit, but we were one of those hit harder than anyone else since we weren’t eligible.”
Ardtornish dealt double blow with £250k rental loss
Mr Raven said he received encouragement from the Scottish Government when setting up the renewables business.
His five small hydro schemes are developed on the 35,000-acre estate and produce a total of 3.4 megawatts of electricity.
He said the estate was hit with a double blow, missing out on an expected £250,000 in rental fees due to Covid.
Mr Raven said Ardtornish then took on five-year loans and despite not disclosing exact figures, confirmed they were in the millions.
However when it looked to renew the loans the bank declined due to a lack of surplus cash. This directly led to the redundancies.
He said: “Our financial projection had us with the surplus cash comfortably.
“But then we couldn’t refinance the loan – our rates bill in 2021 was £525,000. Our hand was forced, we had to cut costs significantly.
“It 100% leads directly from the Scottish Government’s policy – it really is a scandal.”
A legal challenge has been lodged against the Scottish Assessors, with claims bills were 240% higher than equivalent wind energy businesses.
Ardtornish plea over concerns sent to Ian Blackford
Mr Raven is due to meet with SNP MP Ian Blackford over the policy and a potential review of rates.
He believes, at 20% of turnover, it is the highest level of rates levied on any enterprise in Scotland.
In a letter to Mr Blackford, Mr Raven claimed the Scottish Government was limiting the number of employment opportunities within the sector.
He said: “Some of Scotland’s hydropower producers are probably the largest ratepayers in Scotland, proportionate to turnover – which is now restricting investment in hydropower in pursuit of net zero.
“Jobs have been lost through redundancy as a direct result of Scottish Government policy in this respect.”
Mr Raven also claims there is “no doubt” the Scottish Government could use its powers to accelerate the transition.
Scottish Government response
A spokesperson for the Scottish Government said it offers “the most generous rates relief in the UK” for renewable generators.
The spokesperson said: “The Scottish Government values the contribution that the hydro sector makes to the Scottish economy and to our low carbon ambitions.”
The spokesperson confirmed valuations are carried out by independent Scottish assessors.
Appeals on valuations are made to the Scottish Tribunals ultimately Lands Valuation Appeal Court.
The spokesperson added: “Non-domestic rates are administered and collected by local authorities who must have regard for the UK’s Subsidy Control Act 2022 when awarding reliefs, in particular the subsidy control requirements set out in that Act, which limits the amount of financial support businesses can receive from government.”
Conversation