Charities and community groups could face closure if their tax aid is slashed.
Nova, a charity supporting the voluntary, community and social enterprise sector in the district, is warning that the organisations could be left unable to pay for their premises, if Wakefield Council cuts its business rates relief scheme.
A spokeswoman for Nova said: “Reducing rates relief to small voluntary organisations running large community buildings would mean either closure or them using money that currently pays for work with vulnerable people to pay increased business rate bills.
“It would have a big financial and social impact across the Wakefield district.”
Registered charities and amateur community sports clubs currently receive an 80 per cent discount on the tax they pay on their buildings, a reduction known as mandatory business rate relief.
And they can request a discretionary top up relief, exempting them from paying the remaining 20 per cent.
Other not-for-profit community organisations can also apply for tax aid, through a 100 per cent exemption at the discretion of the local authority.
Wakefield Council last month launched a public consultation about possible changes to the relief schemes it offers.
But Nova has warned a reduction in support could have a huge impact on services.
Alison Haskins, the charity’s chief executive officer added: “Any reduction in the discretionary rate relief will create a small short-term financial gain for the council, but will cost them much more in the longer term when charities have to close, reduce their activities, or shut buildings because they can’t afford to run them. The council will have to pick up the cost of these.”
The charity said a change in discretionary relief from 20 per cent to 15 per cent would see Lightwaves Trust, the organisation managing Lightwaves Leisure Centre, needing to find an additional £14,250 every year.
And if organisations cannot meet additional costs they may be put at risk.
The Chrysalis Youth and Community Project, which manages The Hut in Airedale, Castleford said it may be left with nowhere to provide activities and education to young people in the area.
A spokesperson for the project said: “We may be left with no alternative but to hand back the asset to the council, which would then cost them to run, close or abandon.”
More than 400 organisations currently receive the 80 per cent mandatory relief, costing £7.2m in uncollected business rates.
And a further 400 receive discretionary relief at a cost of £1.2m every year. The council stands 49 per cent of this - £588,000 - while central government lose out on 50 per cent of the uncollected rates and local police and fire authorities on the remaining one per cent.
Wakefield Council said it was carrying out the rate review to devise a scheme which “continues to offer relief” whilst also allowing it to meet financial challenges.
Coun Graham Stokes, the council’s cabinet member for modern public services, said: “We are considering changing discretionary rate relief and need feedback from the public, businesses and other organisations to help us shape proposals.
“The council faces big financial challenges and to meet those challenges we have to review our current practices to see where money can be saved, while still supporting those who need our help. The business rates relief we give to charities and community groups comes out of money which also has to support other council services.”
He added: “I would urge organisations which receive discretionary business rates relief to take part in the consultation. We need to know what you think so we can make sure we are making best use of the money we have available.”
The consultation runs until February 5 and people can have their say by visiting www.wakefield.gov.uk/DRR any changes would not be implemented until April 2017.