STRUGGLING firms are losing out on millions of pounds worth of savings because councils are failing to use their existing powers to cut business rates.

Retail bosses said vital moves to give local authorities the ability to offer discretionary tax relief – introduced three years ago – are “at serious risk of being viewed as a flop”.

It came as the Scottish Government revealed tax breaks for small businesses saved 119,442 firms a total £254 million in 2018-19.

Councils were handed the ability to lower rates bills for businesses in their area on October 31, 2015.

But since then, only three local authorities – Aberdeen, Aberdeenshire, and Perth & Kinross – have chosen to do so.

David Lonsdale, director of the Scottish Retail Consortium, said: “Three years have passed since councils first got the power to reduce business rates in their areas, but barely any local authorities have bothered to act on it.

“This is hugely disappointing at a time when one out of every ten shops in Scotland’s town centres is lying empty and action is needed to cut the cost of doing business and rejuvenate our high streets.

“This Scottish Government initiated policy has thus far conspicuously underwhelmed and is at serious risk of being viewed as a flop due to lack of take up by councils.

“Scottish ministers should redouble their efforts to get more local authorities to capitalise on this opportunity to support high streets and town centres.”

His plea came as it emerged the value and volume of Scottish retail sales grew in the third quarter of the year.

However Murdo Fraser, Scottish Conservative shadow finance secretary, said the sector was still struggling.

He said: “This is why it is as important as ever that the SNP uses all the tools at their disposal to support the industry at a local and national level.

“Any increase in tax will affect disposable income, so at the very least the SNP must not raise income taxes.

“As part of our proposals to the Scottish Government on their Budget, we are pushing for reductions in business rates to help the High Street, just as [UK Chancellor] Philip Hammond has just done for retailers south of the Border.”

A Scottish Government spokesman said it had “already led the way in providing help for small businesses through our ground breaking small business bonus scheme".

He said: “This scheme - which alone lifts 100,000 small and medium sized properties out of rates altogether - is part of the most competitive rates relief in the UK, worth around £720 million a year to Scotland’s businesses.

“It is incumbent on all councils to give full consideration to any request to use the powers available to them to create local business rates relief under the Community Empowerment Act.

“These powers exist to enable councils to decide how best to respond to specific needs or issues in the communities which they serve.”