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“LOCALISM” –v- “ONE SIZE FITS ALL" (or Whither the Valuation Tribunals?)

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

December 2011.

The Public Administration Committee of the House of Commons believes that the flagship of “The Big Society” is being hampered by alack of clarity, in that Ministers have seemingly not explained clearly enough what this “Big Society” means in practical terms. One definition is “to empower communities and open up public services”.

While the theory is laudable, the practice seems flawed as many public services continue to be hit badly by funding cuts. The buzz words “Big Society” and “Localism” have lost their meaning, whatever those were in the first place. The Localism Act (passed in November) will supposedly give communities the concrete powers they need to make their own decisions about housing, services and commercial development through “neighbourhood plans.” Presumably, it is by this route (and by tipping off the VOA when the latter have omitted to alter the Rating List due to staff shortages) that the rate base can grow and Councils keep a part of the resulting revenue (according to the December Local Government Finance Bill?. How, though, can this ever be realistically possible in an environment of cuts? Doubtless, all will be explained if we are patient.

This whole agenda becomes even more confusing when one attempts to balance the theory of these buzz words with what is actually happening across Government departments. The first act of the Government was to introduce the Public Bodies Bill - The Bonfire of the Quangos’. This Bill had one major flaw: it adopted a ‘one size fits all’ approach and failed to recognise that there are public bodies which do deliver very cost-effective and important services to society. Two such organisations are the Valuation Tribunal Service (VTS) and the Valuation Tribunal itself.

Readers know what Valuation Tribunals do, running an appeal system responsible for generating a total revenue stream of £51bn in annual revenue for the Treasury. What is most confusing is that here we already have something which displays the perceived principles of “Big Society” and “Localism” in that those hearing these appeals are unpaid volunteers selected from the local community. Why then is the Government’s proposal to transfer Valuation Tribunal functions to the Ministry of Justice’s Courts and Tribunal Service, and if Big Society and Localism remain a fundamental principle, why then is Government so keen to put an end to local justice (albeit of the palm tree variety, sometimes) being administered by local people? Is it not a self-contradiction in terms?

Valuation Tribunal hearings provide free, easy and fair access for ratepayers and council taxpayers. Those wishing to pursue an appeal are free to challenge their assessments without any implications as to costs (if they appear in person), in an informal environment. Professional representation at hearings is not required. A move to the more formal surroundings of the Ministry of Justice will change the ethos and informality of such hearings. Professional representation will increasingly be the order of the day meaning that the parties, including local authorities, may need to consider the level of representation, and costs will be likely to rise, accordingly. Billing authorities, rate and council taxpayers will need to meet these in a constrained financial climate.

What appears to have been lost on the powers that be is that the nature of the disputes being resolved by Valuation Tribunal is not appropriate to a Tribunals and Courts Service environment for first instance appeals. The subject matter is local taxation, and there are no fees to challenge tax demand (yet!) A move to the Ministry of Justice would introduce unnecessary layers of formal processes and arguably will introduce huge hurdles preventing access to currently free and locally-dispensed justice.

People go to a Valuation Tribunal because it is the last remedy short of the equivalent of the High Court, for getting a matter resolved independently of the Valuation Office Agency or their billing authority. They want the matter dealt with quickly and inexpensively. Bringing this worthwhile system into a bureaucratic Ministry of Justice First-Tier Tribunal, which will inevitably come with a fee and cost culture, will make access to a hearing unnecessarily complicated, difficult and even financially prohibitive to many ratepayers and council taxpayers.

The fixation with “one size fits all” no doubt stems from the use of the the word “Tribunal”. This needs reconsideration. The Valuation Tribunal makes its decisions, in many cases, on opinions of value – not black and white issues of fact as is normally the case in other tribunal jurisdictions.

If the Government were to remain true to its “Localism” and “Big Society” policies, the Valuation Tribunal Service would remain as a free, accessible and informal service to ratepayers and council taxpayers and remain independent from Ministry of Justice. This would ensure that the public continued to receive a free service for their local taxation disputes (as they do before General and Special Commissioners of Income Tax) and would also allow the Treasury to maximise on its revenue from council tax and business rate collection without any additional costs. And if billing authorities were allowed, once again, to appear in rating appeals (arguably their local knowledge is now as good as that of the declining VOA) the rate base could be supported and increased funds made available to hard-pressed Councils – as well as keeping some of the VOA’s wilder computer predictions in check.


Peter Scrafton

©J.P. Scrafton, 2011

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