The Scottish Trades Union Congress (STUC) has called on the SNP to reassess one of its flagship economic policies in light of Britain’s vote to leave the European Union.

Speaking to the Sunday Herald, Stephen Boyd, Assistant Secretary of the STUC, said Brexit had “further undermined an already weak economy” and that the Small Business Bonus Scheme (SBBS) – introduced by the Scottish Government eight years ago – should be “first in line for a detailed evaluation” as part of the SNP’s response to Scotland’s deteriorating economic circumstances.

The SBBS is a system of property tax breaks for Scotland’s small businesses. Since 2008, nearly 100,000 Scottish firms have used it to claim relief on their non-domestic rates, or tax paid on business properties.

However, the scheme – which has cost £1.057 billion to implement so far – hasn’t been formally reviewed and the Scottish Government has yet to produce any evidence of its effectiveness.

In a stinging attack – which comes after the release of new data indicating that the UK economy may be on the brink of another recession – Boyd described the SBBS as a “waste of scarce public resources” that could demonstrate “no tangible outcomes in terms of jobs, investment, innovation or productivity".

“It may sound brutal but public policy should as far as possible support enterprises with the capability to invest, grow and employ more people, not non-viable very small businesses,” he said. “UK small businesses receive around £9 billion in tax breaks and other forms of support, but only a small minority contribute to growth, jobs and innovation.”

Boyd continued: “Early survey evidence suggests that the short-term impact [of Brexit] is consistent with more pessimistic forecasts and there is a very strong consensus that the long-term impact will be significantly negative.

“If the £1 billion spent on the SBBS had been spent on infrastructure, there would have been a direct stimulus effect, including higher growth and more jobs, and supply would have been boosted in the longer-term.”

Andy Wightman, Green MSP for the Lothians, echoed Boyd’s criticisms of the policy.

“I am concerned that the Small Business Bonus Scheme is being sustained and extended on the basis of weak or indeed non-existent evidence as to its value and purpose,” Wightman said.

“It is easy for politicians to offer such a scheme as a virtuous policy that helps businesses, but given that it has cost over £1 billion since its introduction, it is vital that such expenditure is subject to robust scrutiny.”

Wightman added that the scheme may have inadvertently contributed to an increase in property rents for small businesses, as landlords use the reduction in non-domestic rates to justify higher rent costs.

“If such savings are merely captured in higher rents, for example, then all that is achieved is that public revenues are handed over to private landlords,” he said.

Since the 2008 financial crisis, the number of British firms with just one or two employees has risen dramatically, with 22,000 such enterprises established in Scotland last year alone. Experts say this trend reflects the underlying weakness of the British economy, as more and more people are forced into self-employment or part-time work, which is often poorly paid and inconsistent.

The SBBS was developed during the early stages of SNP Government in 2007 and 2008. At the time, then SNP Enterprise Minister Jim Mather claimed it would improve business investment, increase sustainable economic growth and generate revenue for public expenditure, but there is no evidence that any of these outcomes have been achieved.

The Scottish Government nonetheless insists that the SBBS has been beneficial for Scotland’s small businesses.

“Since the SBBS was introduced, the amount of money being saved by businesses across Scotland every year has more than doubled,” Deputy First Minister and former SNP Finance Minister John Swinney told the Sunday Herald.

“The main benefit of the SBBS is that over two in every five rateable properties benefit from reduced or zero rates. For 2015-16, the average saving per property was £1,751 and the maximum saving per property was £4,800.”

The Federation of Small Businesses (FSB) – described by Mather as the “principal architect” of the scheme – believes that the SBBS has helped even the playing field for smaller firms.

“The evidence suggested that smaller businesses paid a larger proportion of their turnover in property taxation than their larger counterparts,” Colin Borland, the FSB’s head of external affairs in Scotland, said. “[SBBS] introduced a taper whereby, generally, the very smallest businesses paid proportionally less than their larger counterparts.

“Further, a poll of our members revealed that, during the economic downturn, one in eight recipients used the money the small business bonus saved them to stay afloat.”

A review of the Scottish business rates system, led by former Royal Bank of Scotland chair Ken Barclay, has been set-up and is expected to report back next summer.

But Barclay’s remit is limited. In March, shortly before this year’s Holyrood election, Nicola Sturgeon hailed the “success” of the SBBS and said one of the “three clear principles” of the review would be to retain it until at least 2021. The SNP also intends to extend the SBBS to lift 100,000 premises out of business rates altogether.

When questioned by the Sunday Herald, the Scottish Government wouldn’t say how much it expected the scheme to cost over the course of this parliament, although total costs for 2016 are expected to reach £175 million.