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

September 2012.

There was a popular song in the eighteenth century, called: “The World turned Upside Down” which was played by the British troops as they surrendered at Yorktown, effectively ending the American War of Independence.

The same phenomenon seems to be striking the Mother of Parliaments, with the Local Government Finance Bill still only at Committee Stage in the House of Lords (six days and counting in July), with Report Stage still to come (likely to be lengthy in view of the number of amendments which fall to be considered), Third Reading and then back to the Commons for agreement to any Lords’ amendments, before Royal Assent. The Bill will not become law until well into the Autumn – and yet DCLG has put out a three hundred-page consultation on how the Act is going to work.

How do they know that? The Queen in Parliament has not approved it, yet, and (Heaven forfend!) an amendment or two might creep in. The thought is enough to give Sir Humphrey a bad dream!

We all appreciate that, particularly where major legislation is in gestation, timetables for subsequent implementation will be very tight – but is it not prudent (not to say democratic) to wait to see what the law is going to be before drafting another mountain range of regulations and telling asking the relevant part of the country how it should all work?

The Department may think that they have got everything taped: unfortunately, the informed public (here meaning billing and precepting authorities and rating valuers) see tremendous holes in the proposals. True, there are many perceived benefits; but insufficient thought appears to have been given as to how things will work in practice. Ministers have been dealing, in Grand Committee, with over a hundred amendments, put down by peers from all sides of the House, many of whom have held senior elected posts in local government, before entering the House. The Institute, with the Rating Surveyors’ Association, and the National Association of Local Councils, have put down a number of amendments, by courtesy of the Earl of Lytton FRICS IRRV(Hons), who is pursuing them, with suitable support.

Are they all wrong, or merely mistaken? While some of the amendments proposed by other peers may have a political “edge” to them, those put down by Lord Lytton (Crossbencher) have no such angle, and seek, only, to improve the system and the way in which it works.

One of the most welcomed aspects of the Bill is that billing authorities will retain a proportion (was 80%, now 50%) of the rates collected; but unless they have sufficient information as to their likely rate income (the equivalent of calculating the product of a penny rate, until 1990) they will not be able to prepare their budgets, or indeed to supply those authorities which precept upon them, information to enable them to prepare their budgets and raise their precepts, with confidence. The VOA is going to provide them with numbers of entries in their local rating lists, and the number of appeals, Flotsam is told – but unless Councils know far more and can make a prediction as to the outcomes of appeals (for example) then they may as well wet a finger and hold it up to the wind. Ministers are being told what is required, and why.

A more effective step, though, would be to readmit billing authorities to the rating appeals procedure, when they would participate fully (as they did until 1990) in the disposal of appeals against assessment, whether by agreement or by contested appeal. This would be not only be a restored plus for local democracy; but it would also help to restore the exceedingly tarnished perception of the VOA as an independent body – which it is not.

In 1948 the then government acted to restore sagging confidence in the rating system, which at that time was under the almost total control of local authorities. Major (Clem) Attlee removed the valuation function from the town halls and gave it to the newly-created Valuation Office of Inland Revenue, which had no financial interest in the outcome of proceedings. It worked.

Now, of course, the VOA is funded and instructed by the Department, which gives it performance indicators, among other things. The Department also sets the level of the rate (the multiplier), instructs its surrogate billing authorities to invoice, collect and remit to the Department, and (at the moment at least) also funds the Valuation Tribunal Service. Hmmmmm……. Sounds familiar!

Fortunately, Clem’s grandson is a minister at the Department; and it is devoutly to be hoped that the Attlee sense of doing what is right in the public interest will surface once again, and that VOA will be returned to the Inland Revenue, whence it sprang.

There are lots of other changes proposed, which can be picked up from Hansard or the marshalled lists of amendments which appear on the Parliament site. If you like any of them, write to Baroness Hanham or Earl Attlee, at the Department or the House – and send me a copy of your letter to pass on.


Peter Scrafton

©J.P. Scrafton, 2012

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