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Relief cut proposals threaten Welsh targets

Proposals to cut business rate relief for charities threaten Welsh recycling targets, the Charity Retail Association (CRA) is warning.

A report is due next month on a consultation into proposals to cut the mandatory 80% relief that charities get on business rates to 50%, and to tighten the criteria for eligibility.

Concerns have been raised that the relief gives charities, some of which are large organisations, an unfair advantage over other high street retailers and businesses.

However the CRA says that cuts will force hundreds of charity shops to close reducing the sector’s ability to contribute to the Welsh Government’s recycling targets of 70% recycling by 2025 and zero waste by 2050.

CRA head of policy and public affairs Wendy Mitchell said: “Charity shops divert more than 20,000 tonnes of textiles from landfill every year and cut carbon emissions by 200,000 tonnes. Wales is committed to quite ambitious targets so what effect will it have on that?”

Last month CRA chief executive Warren Alexander sent a letter to Welsh environment minister John Griffiths claiming that 82% of people in Wales donated unwanted items to charities, and that a cut to the relief went against the government’s recycling plans. It said: “The proposals under consideration, if adopted, will inevitably cause charity shops to close. This will impact on their ability to re-use and recycle second-hand items in communities all over Wales and runs counter to the Welsh Government’s objective to maximise use of the country’s resources and increase recycling.”

As well as the national 80% business rate relief, many charities obtain up to a further 20% discretionary rate relief from local authorities.

The Local Government Association said that £10 billion of cuts to local government funding meant councils were having to make difficult decisions but would help charities with the impact of any new arrangements.

“Ultimately, local authorities are protecting frontline adult social care and child protection services and this means they have to find savings from other areas of spending,” a spokesman said. “In most instances councils will work with the third sector to help them manage any transition to lower funding levels.”

Welsh business minister Edwina Hart asked for specific examination of business rate relief after recommendations in the Business Rates Review carried out in 2011. A call for evidence regarding charity relief ended at the end of the year, and a report is due in April.

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