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AN ARTICLE by Peter Scrafton FIRRV, FCIArb, MRSA(Hon) Solicitor (Non-Practising)

March 2010.

Readers will be relieved to learn that the minor tremor reportedly felt in the Blackpool area just before Easter was not in any way connected with the recent Japanese tsunami – it was just the Valuation Office Agency moving the goal posts again! No surprises there, then.

Your Editor, taking a break from his sunny Spanish home, found me on the beach at Margate, wandering the tideline, seeing what the sea of valuation had thrown up on to the beach. I had one or two pieces with me, and so he invited me to write about them, here. Being, like the Fool in Shakespeare’s “King Lear”: “… a snapper-up of ill-considered trifles”, I welcomed the opportunity to lay my discoveries before you and to offer you my thoughts, in the hope that such thoughts might, in turn, provoke contributions to these pages from others, whether in reply or otherwise taking a discussion further.

I had just spotted an article by Gordon Heath in the January edition of “Valuer”, entitled: “Avoidance or Evasion?”. Far be it from me to differ from so august a personage as Gordon; but I am afraid that I believe that his opening statement is simply wrong: “The VOA is under a duty to maximise the rating list…” No it isn’t: he is under a duty to make and maintain the list in correct form. This was stated clearly in the General Rate Act 1967. In the Local Government Finance Act 1988 it is restated at s41(1). The Ladies Hosiery case is still with us, holding that correctness is not to be sacrificed to uniformity.

Before LGFA, the then VO did not have an ethical problem: he was a neutral officer, and held the ring between ratepayers and rating authorities, which had an active role in rating valuation. Cases could only be settled by tripartite agreement, and appeals were frequently three-handed, also. LGFA booted rating authorities out of valuation and made them active ratepayers instead. So between whom was the VO to be neutral? Difficult.

Then along came Agency status, and the VO gained what private practitioners had had for years – a client. Where did that place the VO, then? In a cleft stick, as far as I can see. On the one side he has the statutory duty laid down by s41(1); but on the other he has his duty as a professional person to his client, now known as CLG. The statutory duty requires him to do what he has always done: his client, though, the Government, as Gordon puts it: ”…. is desperate to raise more revenue”.

The private practitioner has a duty to his client to do for him the best that he can. This is tempered by his professional duty to act in an ethical manner throughout. Private practitioners have numbers of clients.

By contrast, VOA has a statutory duty and the same duties to its clients and ethical duties as their colleagues. And it has only one client, which pays it and therefore feels that it can call the shots.

I have seen VOA edging away from its former position of neutrality. Have you noticed how the answer for which a VO contends is so frequently that which produces the highest possible bill (when transitional paths are taken into account)? One recent classic is the refusal by local offices to delete from the lists in their care, premises which have become empty, when such properties would have been deleted – until the present empty rating provisions came into force. Result? Unless the ratepayer fights – more revenue.

Then we have the increased praying in aid of the Rating (Valuation) Act 1999, and its meaning. We know that the Bill was a disaster and that the discovery came too late to change it, because that would have meant taking it back to the Commons before returning to the Lords. So instead there was Lady Farrington’s speech, and the Practice Statement prepared and agreed by the professional bodies and the VOA, a copy of which was deposited in the House of Lords’ library. Job done? One might have thought so, until VOA issued a new internal and unilateral Practice Statement in 2008, which ignores the joint statement and reinterprets the Act so as to yield – more revenue.

And CLG has its own Valuation Policy Unit. Why? Isn’t valuation the job of the Agency? Does this client keep a dog and tell it how to bark?

It seems to me that VOA, acting under extreme client pressure, has an actual or a potential conflict of interest on its hands.

This piece should not be read as “having a go” at any individual or group: but it seems to me that answers are required, in the public interest. I am sure that the Editor would appreciate answers and comments from all with an interest.


Peter Scrafton

©J.P. Scrafton, 2010

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