Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of witnesses (Questions 163 - 179)




  163.  We welcome you back to the Sub-Committee. For the record, perhaps you would identify yourselves.
  (Mr Ballard)  I am John Ballard, Principal Finance Office, Department of the Environment, Transport and the Regions. On my left is Philip Wood, Director-General of Local and Regional Government, and on my right is Paul Evans, Director of Regeneration.

Mr Olner

  164.  How many appeals against non-domestic rating valuations were outstanding at 1 April 1998?
  (Mr Wood)  My figure is for the end of May which I hope is near enough. The answer is 295,000.

  165.  How many of those relate to the 1990 rating list?
  (Mr Wood)  I do not have an exact figure for that, but a small proportion still relates to that earlier revaluation.

  166.  What is that "small proportion"?
  (Mr Wood)  I cannot give you that figure now; I shall give it separately.

  167.  We need to know how far you have moved in five years, do we not?
  (Mr Wood)  Yes.

  168.  What proportion of the rateable value on the 1990 list was lost through appeals?
  (Mr Wood)  Of the 1990 list, 9 per cent.

  169.  Is that acceptable?
  (Mr Wood)  No. It seems to me to be much too high. One of our objectives is to reduce the erosion of receipts from that source.

  170.  What percentage has been lost on the 1995 rating list?
  (Mr Wood)  That loss is forecast to be 7 per cent. I have to say that originally it was forecast to be down to 5 per cent. Clearly, there is something wrong here. The arrangements particularly in terms of the original valuations and the appeals are out of kilter. We are now trying to do something about that.

  171.  Do you think that it has gone out of kilter because some of the list was compiled inhouse and some by external valuers? Is there any method of differentiating the respective proportions?
  (Mr Wood)  I see no evidence that the erosion in receipts is explained by that factor.

  172.  But have you made any comparisons?
  (Mr Wood)  I am not aware of any research that has been directed to that question. The Valuation Office in reporting to Treasury Ministers has done some research recently which examines the effectiveness of the use of private sector valuers. That was reported to Parliament by the Financial Secretary on 23 June. One of its conclusions was that it was feasible for private sector valuers to do the work done by Valuation Office valuers. There was no question that they would be unable to deliver the appropriate quality.

  173.  I am seeking to discover what proportion of the list provided by the inhouse valuers and external valuers was lost on appeal?
  (Mr Wood)  I cannot give that answer now, but I shall provide a supplementary memorandum on it.

Mrs Dunwoody

  174.  If you are 10 per cent adrift from the original list, and it looks as if you are going to be wrong again on the previous one, albeit you have no exact figure, surely you must ask yourselves why there was such a poor result in the first place. One reason may be that the people who were used were not accustomed to making these valuations?
  (Mr Wood)  The evidence that we have from the closely controlled and monitored experiment put in hand in an attempt to answer that question has not established any difference of that kind.

  175.  What did it establish?
  (Mr Wood)  It established that there was no financial advantage to the Exchequer in using private sector valuers.

  176.  So, they are all poor?
  (Mr Wood)  As a consequence, the Government have decided that they will not use private sector valuers in future, and not for the 2000 non-domestic rate revaluation in particular.

  177.  Is that based on the assumption that if one is to have poor valuations one may as well have them provided by one's own valuers?
  (Mr Wood)  We are concerned about what has been happening and have put in hand an examination in the form of a financial management policy review of the valuation office[1]. It is clear that there are things that are wrong but which can be put right. The FMPR report, which I hope will come out in the summer—certainly in this calendar year - will make various suggestions. The valuation office agency is consulting on ways of improving the flow of information in both directions between the valuers and property owners so we do not get into a stand-off where each side does not know the basis on which the valuations and the views and facts relating to particular properties are arrived at.

  178.  That is admirable but a little tardy, is it not?
  (Mr Wood)  That can be argued, yes. Admittedly, with any appeal system one must expect some degree of erosion. It is too high but it has been improving. We went from 9 per cent to a forecast for the 1995 valuation of 7 per cent. In my view, that is not good enough. Hence, we are trying to address further improvement by the means just described.

Mr Olner

  179.  How can you state categorically that it is improving when the loss is 9 per cent and 7 per cent and 284,000 appeals are outstanding? That 7 per cent may go up; it may be worse than the 9 per cent?
  (Mr Wood)  No. The 7 per cent is not what has been eroded so far; it is an estimate of the total erosion once we have been through the great bulk of the appeals. The 7 per cent is intended to be on all fours as a comparison with the 9 per cent.

1   Witness Correction: Appeal system. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 1998
Prepared 17 August 1998