Viewpoint - 19/11/2012

Unappealing tactics delay decisions

The log jam of appeals at the Valuation Tribunal service is testament to a bureaucratic mess.

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The non-domestic rating appeals process is buckling under the weight of its own bureaucracy. The log jam of appeals at the Valuation Tribunal service is testament to the bureaucratic mess which now exists around the entire system of business rates appeals.

Businesses seek justice

With an estimated one third of a million separate rating appeals outstanding, some of which date from the 2005 rating list, hard pressed businesses face a bitter fight for justice in the face of a non-domestic rating regime which has actively stacked the cards entirely in its own favour. The tactics being employed in the name of the coalition government include:

Playing the long game
Each unsettled appeal, including many from previous rating lists, directly impacts upon the financial success or failure of an individual business. Yet the government seems comfortable playing the long game in the hope that appeals will eventually be dropped.

Layered bureaucracy
With the exception of investment in the information systems which underpin property valuation and rating, little positive change has occurred in the processing of rating appeals. For example, the statement of case is a bureaucratic luxury neatly bound in government red tape. It serves only to increase the workload for appellants, stifle negotiation between the parties and provide the government with time to conjure up reasons why a genuine appeal ought to fail.

Ignoring professional advice
Beyond warm words in public, the government’s Valuation Office Agency (VOA) has chosen not to invite professional surveyors with experience of property within common classes to discuss the general parameters for agreement in advance of individual negotiations. Instead, it seeks to settle cases individually, thereby increasing the cost and volume of individual appeals, and delaying outcomes.

Withholding rental evidence
The government’s representatives have also elected to withhold rental evidence in situations where it deems the appellant unable to present a cogent argument. In order to stymie so-called ‘fishing expeditions’, the VOA has manufactured a negotiating environment in which relevant evidence need not be shared between the parties.

Subverting negotiation
The role of the much maligned statement of case ought to be reviewed. In these difficult times, with business resourcing under pressure, VOA headcount being cut and appeal numbers increasing, this apparently innocuous part of the bureaucratic procedure actually plays a significant role in stalling negotiation. The parties should be being encouraged to negotiate freely up until the very last moment.

2008 valuations are increasingly irrelevant

The unfortunate reality of the situation is that genuinely relevant rental evidence is thin on the ground because today’s market is depressed and the Rateable Values being used to determine occupier rate liability were set in 2008, prior to the onset of the current recession. Those valuations are, to a great extent, irrelevant in light of the impact of recession.

All parties should refine appeal procedures, share relevant rental evidence and strive to achieve a rapid conclusion based upon reasonableness rather than delaying the outcome of an appeal by pulling every trick in the book.

This article is part of the autumn 2012 edition of Rating in Brief.

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