Thanks to the Council's largesse The Workary offers clients desk rentals for a mere fraction of rates charged by overhead burdened competitors.
It claims RBK&C is a 'partner' in its business.
When this breach of competition was pointed out to Cllr Lady Faulks she seemed incapable of understanding the anti-competitiveness the Council was party to.
Justin Downes owns a medium sized co-working space. He charges a very modest amount because he enjoys helping companies grow. He continues the story...
" many companies have grown out of my co-working office and many have asked me to be involved. Latterly, tenants were coming to me saying that The Workary was offering massively discounted rates. When I investigated I discovered that the £27,000 a year I pay in business rates was obliquely supporting a competitor!
And that competitor was able to drive me out of business because it was a Council 'partner' and not paying Business Rates or a fair rent.
To add insult to injury the advice I got from the very foolish and unbusinesslike Faulks was whether I would like advice from the Notting Hill Business Centre!
I won't be continuing sadly"
Government should stick to its knitting and stay out of business and stop distorting the market and stop spending Council Tax unwisely.
ReplyDeleteToo many Councillors, not enough to do and too much money to spend
So, the Council are now subsidising Mr Downes's competitor so Mr Downes winds up his business. Outrageous
ReplyDeleteIs this not a breach of competition law?
ReplyDeleteAnother mess up from Lady False
ReplyDeleteIt is outrageous that the Kensington and Chelsea Council is setting up subsidised businesses to compete with the its own residents who are already struggling to stay in business. For once Councillor Lady Faulks listen to your residents. You are there to help small businesses not to close them down.
ReplyDeleteWell said, 21:08
DeleteWhat on earth did she think she was doing knowing co-working businesses were struggling
This is a good story for the Daily Telegraph
ReplyDeleteI was a tenant at 21 Ellis St. I knew the struggle Mr Downes faced keeping it going through the lockdowns.It was well known that The Workary in Kings Rd and Old Brompton Rd were undercutting but I had no idea that the Council were letting it off Scot free from Business Rates and peanuts rent. So now we have nowhere to go. Thanks Council!
ReplyDeleteThis reminds us, and highlights the need for campaigning for a proper look at business rates.
ReplyDeleteAs a former Councillor, I can envisage there are times when the Council would want to support small local charities, or those providing a local service to residents, such as helping disabled residents into work and “supported working” environments. For example, local charities, like the Forum, are looking for office space for their small team in order to run their events for the elderly and to tackle social isolation. As a resident I would probably support that type of initiative.
It would appear that our Council has set itself up in competition to local business and is using council space to offer discounted rates in competition to local businesses
Justin
ReplyDeleteIt sounds as though you have a strong case to take to the Local Government Ombudsman. What you have reported makes a mockery of market based economics - something that Conservatives should defend vigorously
Regards
Donald Cameron
When I read about situations like this in RBKC it seems to me that we might as well have Labour in power. It would be better. They too would operate an economy wrecking policy but the individuals would not be corrupted by power and seeking to feather their own nests and egos. And they would have a better instinctive feel for the underclass in North Kensington and implement administrative practices that would avoid tragedies like Grenfell.
DeleteAnd of course their would be no splurging on the fripperies that give inadequate but puffed up Cabinet members like "The Office for Innovation" feelings of grandeur. Things like security alarms, high street benches and opera subsidies, all on the Council Tax
There are several former tenants of Mr Downes's co working space that have had to leave and I am one. It was a terrific low cost start up.Justin was always around to help with advice and contacts. It is quite shocking to hear the backstory of the favouring of a competitor. The Council have behaved maliciously
ReplyDeleteMr Downes?
ReplyDeleteWhy not refuse to pay and get taken to Court. No Court would accept the circumstances in which the Council would be pursuing you. The Council would be seen to be robbing Peter to Pay Paul
It is outrageous that Council Tax payers are paying £48k allowance to Cllr Faulks (plus a further £30k support costs) to be a Cabinet Memeber for Business and Innovation. What does this have to do with clearing the dustbins and sweeping the parks? Nothing
ReplyDeleteTo add insult to injury, the Cabinet Member for Business has no real business experience.
This is an abuse of power by Cllr Campbell to create a non position. It is a disgrace that the Conservative Party is behaving in this way
I wonder if it would help to look at this dispassionately and to try to look at the numbers, so far as they are available. To make a rationally based judgement, we really need some more numbers (like what rent Workary are paying the Council) and perhaps the Dame could ask Councillor Lady Faulks to respond with a reasoned and factual response.
ReplyDeleteThe facts so far as we know them. Mr Downs is saddled with non-domestic rates of about £25,000 a year. A hefty burden for a small business. The Chelsea Library Complex is rated at £120,000. It is many times the size of Mr Downs’ small office, that is about 120 square metre, but benefits from a favourable treatment as a public library. So, it pays non-domestic rates of about £60,000 a year. Less than two and a half times the rates that Mr Downes pays for a building many, many times larger. It would appear that the Workary is not paying rates at all. Why is this? It is because public libraries benefit from a special rating concession. The Council seems to have passed this benefit on to the Workary. If anyone wants to look this up, see the Rating Manual for Valuation Officers Section 6 Part 3, Section 620. This concession has caused problems when a local authority, for example, delegates the Library function. In this case, the Serviced Office provided by Workary, should have been assessed by the Valuation Officer as a separate hereditament and as a commercial enterprise. You would have expected the Council to inform the Valuation Officer of the situation and to arrange for a separate entry to go into the List. If this has not been done, it should be corrected as soon as possible, and back rates paid either by the Council or the Workary Business. I am not sure what happens at Workary’s other branches, but the situation is likely to be the same.
So, what about the Workary and why is the Council giving them what appears to be such a ‘sweetheart’ deal, that is putting the competition out of business? The pitch is that it is offering space to young entrepreneurs starting out in life and to not-for-profit organisations. This is a fiction. Workary is a highly successful large business established by David Fletcher some few years ago. It has numerous branches and far from the ‘pitch’, if you look at its website it boasts that its services are available people who are part of big companies, freelancers or just getting started (comes last in the blurb!) So, it looks as if the Council are living in a parallel universe and totally unwilling to accept that it is subsidising a commercial business that is putting its own local businesses out of business. This is what appears to be the position, but please Dame, ask Councillor Lady Faulks to respond.