Written submission from Outsmart (PRO0084)

Priorities of the Business and Trade Committee for 2026

Outsmart Submission

Introduction to Outsmart

Out of Home (OOH) advertising refers to any public advert viewed outside of the home environment. Each week, 97% of the public see an advert in an outdoor environment, making it one of the most dynamic and inclusive advertising mediums available.

Typically, these are displayed on classic sheet posters or digital screens, but also on critical social infrastructure, including bus shelters, free telephony and public defibrillators. These local benefits are funded by advertising, not the taxpayer. In fact, 46% of the industry’s revenue is reinvested back through taxes, funding for public services, community projects and infrastructure.

Outsmart is the trade body for the OOH sector in the UK, representing OOH media owners, the majority of whom are SMEs. Our members collectively represent over 90% of the industry’s revenue and operate some of the country’s most iconic advertising spaces such as the Piccadilly Lights.

Reasons for submitting evidence

Outsmart is delighted to be provided with the opportunity to contribute towards the Business and Trade Committee’s consultation on 2026 priorities. The work of the Committee this year has been extensive, and we look forward to continuing to follow and contribute where possible to the Committee’s programme of work for the forthcoming year.

A key focus rightly identified by the Committee is on removing barriers to unlock economic growth. As a key growth sector, the focus of our evidence will be around the subject of transforming business rates which is an area of increasing political discussion and no doubt a key focus in 2026 as the Government looks to shape policy in line with its Transforming Business Rates programme.

Response

A)    Costs of Doing Business

-          Which areas of reform, planning, infrastructure, regulation, skills are most urgent for unlocking growth?

The Out of Home (OOH) advertising sector has contributed £1.1bn to public finances through business rates and rent over the last 14 years. This is a significant source of income for local authorities in helping to build and maintain public infrastructure, along with supporting public services, communities and employees.

At present, OOH media owners pay rates across large estates of sites that provide public services such as bus shelters and defibrillators. Individually, these sites impose a significant cost on OOH operators as they are small low value hereditaments which are rated and billed individually. This means they require the same amount of administrative resources from the billing authority and the OOH media owner to facilitate the payment of business rates, as much higher value properties, amounting to an extremely high administrative cost often using outdated methods of collection, such as paperwork over digitisation to manage these thousands of sites.

In total, there are 34,900 advertising sites, representing 1.64% of all the properties on the rating list (NDR Stock of Properties). These advertising sites raise just 0.18% of the total rates revenue (based on the rateable values of £128m across advertising sites from the total of £70.9bn on the full rates list).

Of these, over 26,000 sites are bus shelters, public telephony networks and public defibrillators. These social infrastructure sites are installed and maintained at no cost to the public, supporting local councils, communities, and the high street.

Given the administrative costs of levying business rates on these beneficial public assets referred to above, the associated income for local authorities is substantially reduced and prevents media owners from investing more in the community. We have obtained from Companies House data that suggests for every £1 of revenue raised on social infrastructure sites, 7.5p of compliance and 7.5p of administrative costs are created. The administrative cost of this tax is an order of magnitude larger than the 0.51p that HMRC have estimated it costs them to collect £1 of tax revenue.

Moreover, councils own many of these sites, and the reduction in demand from the imposition of business rates will reduce the rental income they receive from these sites, which will reduce the net tax revenues that result from applying business rates to these sites.

B)    Pro-Growth Reforms and Investment

-          What policy options could reduce the cumulative burden on business while maintaining fiscal sustainability?

Originating in France in 1964, the concept of advertising funding social infrastructure has now been long-established and replicated in countless countries ever since. Social infrastructure sites display a mix of mostly commercial advertising combined with local community information. OOH advertising funds the installation, maintenance and cleaning of social infrastructure at no cost to the taxpayer.

Removing business rates on social infrastructure will help to ease the administrative headaches faced by local authorities, while ensuring that sites which provide public benefits can be better supported and funded by media owners. The move would also allow local authority contracts to be based on simpler rent agreements, increasing direct income to local authorities and unlocking more money for growth in the community.

As it stands the business rates system has no real winners – local authorities are seeing little return while local communities are losing out from the maximum investment in social infrastructure that could be provided directly by media owners instead. The reform we are asking for will ultimately help to level the playing field given online giants pay no business rates, nor do they reinvest back into social infrastructure whereas OOH always has and always will as an industry help revitalise our town centres and high streets.

To conclude we would raise a final point around the planned changes to rateable values due to take place in April 2026 as part of the three-year revaluation. In particular, the changes to the rateable value of bus shelters – key social infrastructure sites often funded in whole by our media owners – will be substantial. We believe that changes to the values will further impact the ability of the OOH industry to provide investment value for local authorities with costs set to increase by between 25% and 75%. The biggest question marks relate to how the Valuation Office Agency (VOA) has arrived at these new values, and with which councils it consulted, as well as future engagement avenues given the VOA’s expected dissolution next year.

This Government is committed to reforming the system for business rates – both through the introduction of higher multipliers and also relief packages to support small businesses. In this regard the OOH industry has been critically overlooked as an industry investing nearly half of its revenue back into communities and supporting the very infrastructure that keeps our high streets alive.

We would gratefully welcome the Committee’s support in examining Out of Home and a fairer outcome that ensures our sector contributes fairly and sustainably to the system of business rates.