The People’s Supermarket co-founder Kate Bull claims Camden Council’s decision to impose a £78,000 business rates bill on the supermarket contradicts the fundamental principles of Prime Minister David Cameron’s Big Society initiative.
Highbury Magistrate’s Court has ordered the retail co-operative to pay arrears of £35,000 for 2010 and a further £45,000 for this year after it failed to secure not-for-profit rate relief under the Discretionary Rates Review Scheme.
With its focus on engaging and helping the local Holborn community where it is based, as well as its unique profit distribution model where members decide the destination of the money generated, Bull hoped that The People’s Supermarket would qualify for exemption.
She told Retail Gazette: “I am exasperated by the decision more than anything else.
“We have created the type of business that the current government wants to see, but this latest setback is yet another hurdle that we have to overcome.”
Cameron visited The People’s Supermarket last month and told Bull and co-founder Arthur Potts Dawson that the shop was a prime example of his Big Society plans in action, but only the local council has the power to grant rate relief.
Local government minister Bob Neill called for the decision to be reversed earlier this month, saying it could be a setback to Cameron’s plans, but his appeal appears to have been ignored.
“I feel sheer and utter frustration and wonder what impact last week’s court decision will have on other social enterprises - there is little economic support to get organisations such as ours off the ground,” Bull added.
As a result of having to pay the rates - £600 per week over the next two years – some of The People’s Supermarket’s community projects have been curtailed.
The installation of air conditioning in the store has now been postponed, as has the fitting of environmentally-friendly fridges and the wider roll-out of the supermarket’s apprentice and training programme for unemployed young people.
Channel 4 recently ran a four-part series on the supermarket, and Bull said that the coverage has had “a tremendous impact” on the store, helping push membership numbers over 1,000 and average weekly takings to £30,000.
Average spend per person is closer to £6, which is a further increase on the growth in expenditure reported at the start of the year, although lots of the enterprise’s attention will now go into appealing against Camden Council’s rates bill.
Bull stated: “My understanding is that because we have a declared an aim to make a profit we’re less eligible for support and it’s counting against us to get funding – we did not expect this to happen.
“But we differentiate ourselves through what we do with our profits.
“They go back into the community and the destination of the money is decided by our members.”