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

July 2011.

Some years ago, I attended a Treasury Sub-Committee meeting at the House of Commons.  I was part of an invited delegation from the Institute which was called to give oral evidence to Members as part of the quinquennial review of the Valuation Office Agency.  In those days, these reviews were carried out by Parliament, although now, as we know, they are carried out, without parliamentary scrutiny, under a species of self-assessment regime.  That change, of itself, is a matter of concern to me and to others like me.


On the evening of the Sub-Committee meeting, I was accosted by one of the members, who happened to live in my building: the members were curious, he said, as to why private practice was fighting so hard to strengthen “the opposition” (the Agency).  I pointed out that the Institute had both a private and a public sector membership and that (as was the case at that time) all professional members of the Agency were chartered surveyors, and therefore members of the RICS.  Our interest, I told the MP, was in securing a level playing field to avoid the rating system being brought into disrepute.  I told him of the compulsory year-on-year budget reductions forced on successive Chief Executives as a condition of their appointment.  He was shocked, observing: “You can’t run a public department that way”.


The eventual upshot was that the Sub-Committee gave the Agency a good report and recommended that it be given additional funding.  Needless to say, the Treasury rejected the recommendation.  We tried, boys and girls: we tried for you; but your lords and masters did not want to know.  The playing field, it seemed, was no longer to be level, and where the structure of the Agency did not meet its given performance indicators (some unpublished, I understand), government kept altering the rules of the game in order to make life harder for ratepayers wishing to challenge their assessments.


Having had an exceptionally happy and professionally satisfying time, advising and appearing for members of the old Valuation Office, I confess, freely, that I have been disappointed by many of the changes in the way in which the Agency has become obliged to play its part in the operation of the rating system.  This article is not concerned with the changes in regulations but with some of the other, sometimes less obvious changes which have come to pass. First on the list is the requirement to insert on a proposal form the amount of the rent passing in respect of the hereditament.  This followed on from the finding that a proposal was not invalid merely because a ratepayer had the temerity to show more than one ground of appeal on an Agency proposal form when specifically instructed, by the form, not to do so.


Thus thwarted in one attempt to defeat what he called “the appeals industry”, a senior officer in the Agency hit on the idea of requiring all proposers to enter details of the rent of an appeal hereditament on to the proposal form.  This created a great deal of work for ratepayers and their agents, who could not see why details of rents had suddenly become a necessary prerequisite to the making of a valid proposal.  When the author of this scheme was asked why he had created it, his answer was quite open – to discourage the making of appeals.


The gentleman concerned having left the Agency for pastures new, the malady lingers on: the passing rent is still required; and completed proposal forms are shown to the omniscient Agency computer, which approves, or rejects the figure given.  Of course, the ratepayer or its agent may have got the figure wrong; but just as frequently the computer’s information is out of date.  Either way, the flood of invalidity notices continues.  Why a Form of Return is not required, if the Agency needs information, has not yet been explained.


But now a new weapon has been deployed to keep the playing field tilted away from the ratepayer, and it is one which, in its effect, is having an effect foreseen by the professions when discussing the proposed Practice Statements with Professor Zellick and his colleagues at the Valuation Tribunal for England.  This is Agency document R2010 IA 300311, entitled: “ Defence of the 2010 Rating Lists – Disclosure of Evidence”.  The Summary says: “This IA provides instruction and advice about the disclosure of evidence when defending the 2010 rating lists”.


“Defence of the List” ??? I can hear old Valuation Officers spinning in their graves at the very mention of the expression.  It was always impressed on me, when I worked in the Rating Group at the Solicitor of Inland Revenue’s Office, that the task of the Valuation Officer was to discharge the statutory duty of making and maintaining the Valuation (Rating) List in correct form.  Everyone, from the Chief Valuer downwards, was repelled by the prospect of defending a particular figure unless, upon re-examination, it was believed to be correct.  The thirst for revenue by DCLG (the Agency’s client and setter of its performance indicators) and the Treasury seems to have pushed this statutory duty into, or at least further towards, the back seat.

The other cause for disquiet is the use of the word “instruction”.  Again, a Valuation Officer was never “instructed” to do anything: he or she might be “advised” or have their arm twisted (metaphorically) but, at the end of the day they were the statutory officers, and the only remedy available to the centre against an incumbent who would not co-operate, was to transfer them – something which rarely happened.


Against that background, then, let us examine document R2010 IA 300311, the thrust of which is encouragement (I put it no higher than that) to withhold evidence from ratepayers and their agents, either completely or, at least, for as long as the Agency’s valuer finds conscionable.

The starting point of “policy” (orders? - JPS) is a stance that it is for the ratepayer, as appellant, to demonstrate why a rateable value should be altered, and that such ratepayer should have grounds for such a belief, supported by evidence which, it is said, should be delivered before discussions open.  The former practice of a VO handing over a schedule of rents prior to discussions has been ordered to cease.  This, to my mind, while quite properly avoiding a “fishing expedition” renders the opening discussions fairly useless from the ratepayer’s point of view.

That ratepayer may feel that, having made a prima facie case to the stone wall sitting opposite him, that wall might crack, just a little – but there is more.  Regulation 17 of the VTE (CT and Rating Appeals)(Procedure) Regulations 2009 does not provide authority to disclose rental information.  It actually restricts the use of such information at VT (my italics – JPS) unless the required notice has been given.  There is nothing which prevents it from being used in discussions however, it seems).


The power to disclose rental or other information is contained in section 18(2)(a)(i) of the Commissioners for Revenue and Customs Act 2005 where it is necessary for the function of a Valuation Officer.  So far, so good: but paragraph 2.2 says:-


… The response by the VO to the agent’s arguments should be a proportionate response to what is being put forward to suggest the RV may be incorrect.  It is a matter of judgment for each caseworker, in consultation with team leaders, to decide whether sufficient evidence has been provided by the appellant/agent to justify the VO responding with evidence to support the list entry.    It is important that the appellants have complied with the spirit of the procedure…..


but not, apparently, that the Valuation Officer should do so.  According to the document, he/she is, at that stage acting as an advocate, and not as a witness – which apparently is the role of the ratepayer throughout.  The Valuation Officer does not change roles until after the target date has passed.  This is not explained: but even if the Valuation Officer is acting as an advocate, the duty of an advocate is not just to represent his client, but to help the Tribunal to come to the right decision on the evidence.


The truly jaw-sagging part of the document, as it applies to England, comes at paragraphs 3.4 and 3.5:-


3.4  Once the appellant has submitted a statement of case four weeks prior to the hearing, the VO should apply to the tribunal for a direction that evidence referred to on a regulation 17 notice may be relied on at the hearing notwithstanding that the notice was not served in accordance with VTE Practice Statement A7 standard directions.  A template application letter is available as appendix 1


3.5  In all such cases where consent has been given by the VTE for “late” service and the VO intends to rely on evidence covered by regulation 17 at the hearing, it is essential that the required notice is served not later than 2 weeks before the hearing (i.e. not later than the VO statement of case)


It doesn’t get much more cynical than that, does it?  I am sorry to have to say it, but the Agency is concealing its evidence, obtaining the ratepayer’s case in advance of exchange, and then, whatever its fine words, tailoring its own case to suit, holding the procedure of VTE in contempt to enable it to steal an advantage.  This is exactly what the President of VTE was warned about by the professions, and it has come to pass.


Instead of striking Valuation Officers out, some panels are giving the Agency any leeway it wants.  Valuation Officers are choosing to ignore panel decisions with which they do not agree but which they have not appealed.


A level playing field – my foot!


©J.P. Scrafton, 2011

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