Increasing business rates and overheads to blame for Westhill nursery closure say owners

Stock photo of nursery children
Stock photo of nursery children

A nursery established in Westhill more than 20 years ago has announced it is closing, citing rising business rates and increasing overheads as the reason behind the decision.

Bridges Nurseries, which has operates two facilities in Westhill and one in Bridge of Don, has announced it is shutting the doors of one of its Westhill nurseries.

The company is closing its facility on 2 Lawsondale Avenue, which was established more than 20 years ago in 1995, on June 30.

Last month, Holyrood Finance Secretary Derek Mackay announced a £44million relief package to soften the blow of rate increases for certain sectors across Scotland.

Hotels, pubs, cafes and other businesses will not see bills rise more than 12.5 per cent when the rates come into effect in April.

However, nurseries will not be afforded the same assistance.

In a letter home to parents Lois Duncan, Bridges manager and co-director, said: “You will be aware, from our recent letter and a great deal of press coverage, that the current review of business rates in Aberdeenshire, has put all nursery schools under enormous pressure.

“Short term financial sticking plasters have been proposed for some but they do not currently apply to you, our parents.

“Apart from the immediate financial problems, which have already resulted in a fee increase, we have been reviewing the whole structure of our nursery operation and staffing, in order to stay ahead of a constantly evolving situation, to secure our future and provide the best service we can, for you and the children in our care.

“Our first nursery in Westhill was established over 20 years ago, in 1995, at 2 Lawsondale Avenue and it is therefore with a very heavy heart, that we have decided it must now close.

“As a direct result of ever increasing overheads, this facility is simply no longer viable.”

Children who go to the Lawsondale nursery will be offered a space at the company’s Arnhall Nursery,

The out of school club will no longer be provided after August 18 and Bridges has contacted another provider of after school care to see if they are interested in expanding their service in the area.

Graham Mogford, director of Bridges Nurseries, told us: “From a proposed business rates increases of 75 per cent, VAT on all that we buy plus our maintenance and utility services, it all adds up.

“We now have a 12.5 per cent increase on our refuse collection, which was once part of our business rates, and VAT on top of that again.

“If the Scottish Government are ‘at the forefront of the childcare revolution in Scotland’ as they claim, why talk about free childcare when they intend to underfund providers and also tax the parents? It makes no sense at all and is just cynical posturing.

“The simple fix is to stop VAT and business rates on childcare and there will be no need to waste money by recycling taxes.

“Prices will fall and childcare will be more affordable for working parents.

“Ron McKail, our local councillor has been very supportive and is active in aiding our call for Government to ‘stop taxing childcare’.”

Councillor McKail has called for private nurseries to be relieved of business rates to encourage the expansion of affordable childcare provision in Scotland.

The Westhill Councillor said the Scottish Government’s “flagship policy of expanding child care facilities was being undermined by the huge increases nurseries were facing in business rates following the recent revaluation of business premises”.

Cllr McKail said the Lawsondale nursery saw their rates bill rising from £32,000 a year to £50,000.

He added that families of children being offered places at their Arnhall Nursery will have to pay £144 extra for each childcare place in order to balance the books.

Cllr McKail told us: “The Scottish Government need to consider taking the private nursery sector out of the taxation system.

“This would have the benefits of expanding provision and parents would find childcare costs more affordable.

“It would also help to meet the Government’s declared objective of ‘improving outcomes for children especially those who are more vulnerable or disadvantaged’.

“Many parents depend on the additional hours provided by the private nursery sector to allow them to work or to follow a course of study. Increased nursery fees would make nursery places unaffordable for some parents.”

Aberdeenshire West MSP Alexander Burnett, whose Aberdeenshire West constituency includes Westhill, raised the concerns of private nursery operators at First Minister’s Questions, but explained Nicola Sturgeon said the local council should pick up the tab.

Mr Burnett said Aberdeenshire Council has established a local relief scheme, but due to funding pressures, has only made £3million available in what was termed a “sticking plaster” solution.

He continued: “This is exactly what business owners and local politicians have been warning about for months now, and I hope that others will not follow.

“I raised the issue of private nurseries at First Minister’s Questions, and again during a Holyrood debate on the impact of business rates rises on the North East area, but no further action was taken.

“Businesses in sectors that were not covered by the Scottish Government relief package will feel that they have been abandoned.

“We are still awaiting the outcome of the Ken Barclay review into the rates system, but that will be too late now for many companies who are having to make tough decisions to cut staff, pass on cost increases to customers or close the doors.”

A Scottish Government spokesman said: “The Scottish Government has committed around £660 million of business rates relief next year, including an additional £7.5 million relief recently announced for Aberdeen, while councils are empowered to apply further reductions to address any local issues as they see fit.

“Any business that is concerned about its valuation should contact the assessor and discuss how they worked out the provisional value. Companies have until September to appeal and we would encourage firms to take up those opportunities.”