MORE than £1 million has slipped through the Treasury's fingers in unpaid rates because of empty commercial premises in Ashford.

And Ashford Borough Council could miss out on thousands of pounds itself unless it gets its house in order by the time the rules change over who keeps the cash generated from private enterprise.

Figures released by the council show there are 489 vacant commercial buildings across the borough – about 12 per cent of its shops, offices and factories.

Had the premises been occupied by fully functioning firms they would have generated £1.5 million in business rates – a form of tax.

Instead they will have contributed just £316,000 by the end of this financial year, owing to the fact their owners pay a reduced rate linked to their empty status.

Under the present rules governing business rates, Ashford Borough Council is responsible for collecting the cash, which it passes to the Government to redistribute around the country.

But under a new system being introduced in April 2013, instead of taking all the money, the Government will set local authorities collection targets.

Councils will be allowed to keep 80 pence out of every pound they collect over and above this.

This means the council will be the one that loses out should there be a glut of empty commercial premises.

Councillor Robert Taylor, who has responsibility for finance, insisted the council was doing everything in its power to ensure it would be ready to maximise the income it generates by encouraging businesses to set up shop in the area.

But he was wary of the wider implications of the changes.

He said: "It sounds wonderful but it runs the risk that if there's a downturn and businesses go under then we lose the business rates and there's no compensation for it – we would have to find the money from somewhere else.

"At the moment the Government compensates us.

"It takes the risk and also takes the profits if we get more businesses in."

Mr Taylor added that the council was looking at a variety of different ways of operating the new system and encouraging businesses into Ashford.

One option might be to offer reduced rates to new firms.

Mr Taylor added: "How we operate the system so financially we don't lose, and how we encourage businesses is still being discussed."

The council hopes to roll out the new scheme in the autumn.

Council leader Peter Wood also had concerns with the new rules.

He said: "From a philosophical point of view it's good, but we don't control the national economy.

"Given Central Government is cutting grants, the scope becomes more restrictive, but we will try to be as creative as possible."