Examination of Witnesses (Questions 20-39)
MR ANDREW
HUDSON, MR
DAVID PARK,
MR JOHN
WILKINSON AND
MS SUE
TOWNSEND
24 JANUARY 2007
Q20 Chairman: Are you happy to do
that in writing?
Mr Park: If I can put in the proviso
that—
Q21 Chairman: We understand you are
not directly responsible, but you are being asked here about the
implications for you, so could you reply to us in writing on that
point?
Mr Park: We will provide a note,
yes.[1]
Q22 Peter Viggers: What changes did you make
to new business rate lists published on 1 April 2005 and why was
it necessary to make these alterations?
Mr Park: Of course this was part
of a planned revaluation. The business rating revaluation cycle
is on a five-yearly basis and so the process was obviously the
updating of the individual assessments for the 1.7 million businesses
that are covered. The process was in that sense routine, but obviously
the pattern of assessments will change to reflect the changes
in the property market over that period of time.
Q23 Peter Viggers: The number of
appeals was significantly lower than on previous occasions, and
yet the time taken to clear them was rather longer. Can you comment
on that, please?
Mr Park: On the 2005 lists, it
is correct that the number of appeals is significantly down compared
with the 2000 lists. There are some reasons for that change which
are connected with the appeal regulations, in other words the
period of time within which an appeal against the compiled list
could be made, so that is a factor. Nevertheless, we would also
like to think that the reason for the lower level of appeals is
because the process of revaluation is more transparent and we
have got the assessments, so far as we reasonably can, right first
time, but of course there will be genuine cases where people challenge
that. It therefore means the appeals that we have had are probably
themselves more substantive. Because we had a period during which
queries could be raised before the list became effective, I think
we picked up and addressed a number of points where perhaps the
facts that we held were not wrong, so I think we have got more
substantive cases in that sense. Obviously we are seeking to deal
with those as reasonably quickly as we can and the process of
clearance has actually been brought forward in terms of the timescale
for which people have to wait for their appeal to be dealt with.
Q24 Peter Viggers: Do you feel that
your reputation to be right first time is in good order?
Mr Park: It is always dangerous
to say that and then find the following day that perhaps something
crops up that demonstrates otherwise. Yes, we believe that overall,
but we do not pretend to be absolutely spot-on in every case,
because an assessment for this purpose is ultimately a matter
of professional judgment and, of course, there can be genuine
differences of opinion around those professional judgments.
Q25 Jim Cousins: I wonder, Mr Hudson,
taking you back briefly for one moment to the reference to the
Welsh revaluation, do you keep records on how many times your
staff are attacked in the year before the revaluation and the
year of the revaluation?
Mr Hudson: We do keep records
of incidents of that sort.
Q26 Jim Cousins: What does it tell
us?
Mr Hudson: There are very few,
so far as I know, in the sense that actual attacks would come
to our attention as senior managers, and certainly it has not
crossed my desk. I do not know if you are aware of any.
Jim Cousins: Perhaps you could supply
that information to the Committee.[2]
It would be another way of looking at the success of the Welsh
revaluation?
Chairman: Whether there has been an increase
is what you are looking for?
Q27 Jim Cousins: Yes. I had not realised,
and I had should have done, until the work for this afternoon's
meeting, your role in inheritance tax. What sort of financial
reward do you get for inheritance tax appraisals for HMRC?
Mr Hudson: It is not a question
of reward. We are paid a certain sum of money each year by HMRC,
£11.5 million in 2006-07, in order to carry out work mostly
on inheritance tax and capital gains tax where our role is to
ensure that the valuations required for those taxes are accurate.
Q28 Jim Cousins: It is a block cost?
Mr Hudson: It is a block cost,
and we discuss with colleagues in HMRC how to divide that up between
the various taxes.
Q29 Jim Cousins: How much did it
go up?
Mr Hudson: It went down.
Q30 Jim Cousins: It went down?
Mr Hudson: The amount that we
have been paid for this work has fallen somewhat over the last
three or four years, though I am glad to say that the volume of
cases that we have dealt with, to take inheritance tax as an example,
has gone up from 51,000 in 2003-04 to over 60,000 in 2005-06 and
the turn around time has gone down. So, within a budget that has
fallen somewhat, we have been able to improve the service that
we provide.
Q31 Jim Cousins: The land services
area of your work, you are heavily dependent upon a small number
of government departments for the bulk of the money. You get 25%
of your revenue for this from the Department of Health. Is that
paid for on a unit cost basis or, again, is it a block?
Mr Hudson: It varies dependent
on the type of work. I will perhaps ask John Wilkinson, the Director
of DVS, to explain the detail on the health work, if I may.
Mr Wilkinson: Basically, we charge
on an hourly or a daily rate for the work that we are doing.
Q32 Jim Cousins: So the principle
of your remuneration is completely different in the case of the
land services work from the way that HMRC compensates you for
your work on inheritance tax?
Mr Wilkinson: It is in some ways,
but we do account for the hours that we do to HMRC for the work
we do for inheritance tax and capital gains tax.
Q33 Jim Cousins: And those hours
are going down, are they?
Mr Wilkinson: The hours have gone
down, but because we have improved the way that we do the work,
the way we manage the work and manage the various processes, we
have been able to drive efficiencies and do an increased volume.
Q34 Jim Cousins: Have you compared
your hourly rates—because we can talk about it in those
terms—say for the Department of Health and the Department
for Communities and Local Government and the Highways Agency?
How do your hourly rates the compare to the hourly rates in the
private sector?
Mr Wilkinson: In terms of the
land services work that we do, often we are in competition with
the private sector, so the hourly rates are broadly competitive
. It varies in terms of the type of contract that we are bidding
for. Sometimes we will win a tender, sometimes we will lose one,
and that tells me something about the hourly rates, whether they
were competitive or not.
Q35 Chairman: I have a couple of
other questions, if I may. Your own Omnibus Survey showed that
only 3% of respondents knew about you to complain to if they were
unhappy about their valuation. You talk about your overall customer
satisfaction going up. That is presumably by the people who already
know about you. Only 3% of respondents know you exist, to put
it bluntly. What are you doing about it?
Mr Hudson: The information on
who to talk to about banding issues is in the leaflet that goes
out with everybody's council tax demand, I think I am right in
saying, and we would certainly encourage local authorities to
put those questions to us. We try to raise our profile in other
ways. It is always possible that some of the media attention we
have received over recent months will actually make us better
known and give us the opportunity to put ourselves across in what
we believe is the right light in terms of customer service, but
I think it is an issue, frankly, that the agency is not well enough
known for the work that it does.
Q36 Chairman: What are you going
to do about it, apart from dishing out the leaflet?
Mr Hudson: We have run a number
of customer service activities, such as people's panels, in the
run up to the council tax revaluation. I think the revaluation
in Wales will have brought us into contact with more households,
and, as I say, I am glad to say not very many actually appealing.
In addition there will be general publicity activities.
Q37 Chairman: You recently signed
a contract, I think, with an organisation called Rightmove to
give you access to floor plans and sales prices, and so on. When
you were criticised for this I think you defended it on the grounds
that this material is available anyway to the public and other
organisations. So why did you sign a contract and pay for it?
Mr Hudson: What the contract enables
us to do is assess the historic database. David will add to the
story if we need him to, but it is material that has been in the
public domain, is not any longer and we are able to access it.
Mr Park: It includes material
which is both currently in the public domain and also that which
has been in the public domain, because it covers properties which
have been marketed in the past.
Q38 Chairman: Why are you paying
for it if it is public information?
Mr Park: The principal reason,
because the contract was entered into in June 2005, was to enable
us to check some of detail that we held on properties as we were
preparing for the revaluation, and, of course, as a body wishing
collective access, if I can put it that way, to a very large number
of records, that was very different from an individual member
of the public being able to view the website and, therefore, it
was proper, obviously, to have a formal arrangement and agreement
with them on that.
Q39 Chairman: Are you involved in
the development of Government policy on the Planning Gain Supplement
which will replace section 106 agreements?
Mr Hudson: Yes, we are. We are
working quite closely with the Treasury and HMRC in advising ministers
on the Planning Gain Supplement, again, with our particular role
being as the experts on valuation.
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