Consultation

The Department for Communities & Local Government has issued a consultation document in December 2013 entitled Consultation Document “Checking and Challenging your Rateable Value”.

MUA’s Paul Sewell has replied to the consultation saying:

I am writing on behalf of MUA Property Services Ltd (Chartered Surveyors) and also on behalf of the Machinery Users’ Association (Inc.) in response to the Consultation Document “Checking and Challenging your Rateable Value”.

Before I go on to answer the specific questions, I have a couple of points to make regarding the preamble:-

1.   The very nature of the Revaluation process guarantees that many appeals will be made during the initial months/years of the new Rating List and this will inevitably produce a back log of appeals, which will generally be reduced in number during the later years in the List.  This is the nature of the beast, and, from the statistics produced, it would seem that the 2010 List is conforming to type.  I would therefore dispute that the current system is “broken”, whilst recognising that any process should be reviewed and improved, where possible.
2.  The statistics are interesting.  The document majors on the three quarters of challenges resulting in no change.  However, this means one quarter do result in change.  This implies that 25% of the valuations are wrong, which is a very high percentage.  I wonder how this percentage compares with other areas where “official decisions are challenged by requiring….. an explanation”?  In fact, when the appeal statistics are adjusted for multiple and duplicate appeals, historic appeals, etc. (many of which will be withdrawn or struck out without entailing huge time spent by the VOA), I would expect that figure of 25% to rise significantly.

Turning to questions raised in the document:

“Do you agree that the VOA should provide rental information prior to the challenge process?”

My answer to this is yes, any increase in transparency is welcome.  I note the intention to consult with the profession as to the amount and format of the information to be provided and would therefore not wish to be critical of the specifics at this stage.  However, sections 1-3 of annex B are already largely available on the VO website.  Obviously, I am answering this from an agent’s perspective, and it may be that some of this information brought together in a single place may be more helpful for unrepresented ratepayers.  Section 4 is really the only new information for an agent and, without identification of the properties to which the evidence relates, I am not sure it moves us forward terribly far.  I am wondering why this analysis is so sensitive, when it is often provided later in the current process via a Reg. 17 schedule of evidence notice.  I can see why this detail might not be available on the internet, but would it be possible to think about supplying a pre-appeal generic Reg. 17 notice, on application, to interested parties?  This would enable them to verify the evidence, often from internal records. I have to say that, upon inspection of FoR’s following a current Reg. 17 notice, it is not unusual to find out that incorrect information is being used, and this is a significant reason as to why addresses need to be disclosed ultimately.

 “Do you agree that ratepayers, or their agents, should provide with their challenge sufficient detail……?”

I would welcome a scenario where agents provided more than the initial “reduced to £1 scenario”, but wonder how this might interact with modern electronic methods of submitting appeals.  Many agents already currently use the brief period after submission of an appeal (but prior to programming) in order to engage in dialogue with the VO from a reviewing perspective or to submit further detail about the appeal.  My main concern is that the early submission of an appeal protects the ratepayer’s position, as the Material Day is then set and the appeal can then be discussed in due course.  As you will be aware, an agent can only go back as far as the last MCC in order to make an MCC appeal – so how do we deal with the following scenarios?

1. Petrol affected by new competitor development.  VOA generally likes to see trade data for the calendar year after the MCC.  Will this data now be required to validate a challenge?  If so, what happens if another MCC happens before the pattern of evidence has evolved?
2. Shopping centre shops affected by new retail centre nearby.  How long will it take for a new rental pattern to emerge?  Quite possibly a year or two, I suggest, as the early days post-MCC may be characterised by a dearth of lettings rather than falls in rents.  What happens if the next Reval. is in 6 months time and the appeal cut off date is therefore looming?
3. Temporary MCC, such as roadworks.  The ratepayer would have to gather the evidence and submit the challenge before the temporary disruption ended – also significantly before it ended; otherwise the VOA could argue transience.

 “Do you agree with the Government’s revised approach to the proposal stage?”

Subject to the above comments, I am generally in favour.  In order to level the playing field, I would suggest that ratepayers should have 12 months grace after a List ends in which to submit a challenge (this mirrors the VOA entitlement to serve a VON).  Although the right to “go through” an MCC would also be desirable, it would require a substantial re-write of the Material Day rules.

“Do you agree the VOA should have 3 months to consider if the proposal is invalid…?”

This would seem to be a sensible period of time in order to allow full consideration.

“Do you agree that ratepayers should be able to progress to the appeal stage in the VT for England if they have not received a decision notice after 12 months…?”

My view is that 12 months should be a very outside limit.  Given the current VOA experience with programming (where we often get no response from them to our contact within the period), we would not want to get to the situation where nothing was settled in less than 12 months!

“Do you agree with the Government’s revised approach to the appeal stage to the VTE?”

Generally, yes, although the invalidity aspects will require careful consideration.

“Do you agree that ratepayers should be allowed two months….”

No – the period should be longer than two months.  The VOA have 3 months to consider just validity and 12 months to issue a decision.  Two months does not seem to be a level playing field.  I would also suggest that a longer period will allow a more considered view and possibly result in lower numbers (or higher quality presentations) going to the VTE.