NON
DOMESTIC RATING
VALUATION
The Committee asked for the exact figure for outstanding
appeals against non-domestic rating valuations (Question 166)?
1. Of the 295,000 appeals which were outstanding
at the end of May 1997, 13,900 were in respect of the 1990 rating
list.
The Committee asked what proportion of those valuations
lost on appeal was provided by the in-house valuers and external
valuers (Question 173)?
2. All of the 1990 and 1995 valuations were
done in house.
3. The experiments mentioned in oral evidence
were developed to test the feasibility of using private sector
valuers in support of the VOA's on-going valuation work, for supporting
referencing activity (i.e., the measuring and recording of information
about land and buildings).
4. The evaluation of the experiments concluded
that whilst it was feasible for private sector firms to support
the valuation work of the VOA, there was no clear financial advantage
to the public sector in their doing so. Accordingly, the Financial
Secretary to the Treasury announced on 23 June that the Government
had decided not to contract out this work.
The official asked for further information to
be brought to the Committee's attention about the financial policy
management review (paragraph 177)
5. In response to questions from the Committee,
officials said that the Department was concerned about the loss
of yield due to appeals against rating valuations. That remains
the case. We do monitor this closely, but it is also fair to say,
to give a fully rounded picture, that valuation is not a precise
science: there is generally a significant margin of judgement
involved in determining a rateable value and therefore genuine
grounds for argument. Against this background—as we indicated
in oral evidence—some loss of yield due to appeals is inevitable,
but difficult to predict accurately in advance. It is also relevant
that the 1990 revaluation of non-domestic property was the first
for 17 years. Given the scale of changes in rateable values after
such a long gap and, in some cases, the absence of accurate up-to-date-information,
a relatively high level of appeals and of loss of yield on the
1990 list was to be expected. The scale of changes in RVs, the
number of appeals and the anticipated loss of yield in relation
to the 1995 list all show a significant reduction compared to
the 1990 list, though not as great as originally forecast, as
pointed out in oral evidence; and a further reduction is anticipated
in the 2000 list. On the other hand, within the percentage reductions
in the lists there will be cases where the reduction arises for
changes in the environment after the publications of the lists.
Conversely some changes, new construction and improvements to
properties, increase the value of the lists. Overall, at the latest
date for which figures were available, the total rateable value
of the 1995 lists for England and Wales is about one per cent
higher than it was at 1 April 1995.
6. A financial management and policy review
of the valuation tribunal service has looked at the procedures
governing the handling of ratepayer's appeals against valuations
entered in the rating list. A consultation paper was issued in
September 1997, "Valuation Tribunals: Financial Management
and Policy Review", and since then further informal consultation
has taken place with representatives of ratepayers, rating professionals,
the Valuation Office Agency and Valuation Tribunals. Amongst the
procedural proposals being considered are suggestions for requiring
both the Valuation Office and, where appropriate, ratepayers to
provide factual information earlier in the process to reduce the
matters in contention so far as practicable. The Valuation Office
Agency has already begun discussions with representatives of major
ratepayers in relation to the 2000 revaluation, with a view to
encouraging earlier exchange of information. Improved information
flows and the better understanding coming out of these discussions
should help the VOA to achieve a greater degree of accuracy in
valuations and should help reduce the number of appeals against
the 2000 rating list and the consequent loss of rates yield.
LOCAL
GOVERNMENT RE
-ORGANISATION
The Committee asked whether there were original
estimates for the costs of local government re-organisation (Either
in total or in individual cases) and if so, what the figurers
are. If figures should be presented on a case-by-case basis, it
would be useful to the Committee also to receive actual or indicative
figures for the final outcome in those same cases (Q226-227)
Estimates of costs
7. The Local Government Commission for England's
published reports of their recommendations for local government
contain broad estimates of the transitional costs of re-organisation.
8. For the majority of areas, the estimates
produced by the Commission were based on a standard theoretical
model and made use of figures provided by the local authorities.
This enabled comparisons between the relative costs of the various
possible structural arrangements within a county area. The Commission's
estimates were based on current prices, at the time of the relevant
reports. They also exclude any element of betterment, for example
improvement in IT systems, which will occur when new authorities
invest in new facilities. However, for six areas the Commission's
source for estimates of cost was the Audit Commission (and these
Audit Commission estimates excluded the costs of redundancy, early
retirement and other staff compensation costs).
9. Taken together, the Commission's estimates
of the transitional cost of local government reorganisation produce
a total cost range of £125.6 million to £199.1 million.
The table below summarises the transitional cost estimates given
in the relevant reports by the Local Government Commission for
England.
