Home > News > Government refused permission to appeal in landmark case on rating of public buildings

The Court of Appeal has refused the Valuation Officer permission to appeal against a judgment which the VO claimed would put £billions of ratable value RV from public buildings at stake.

In the rating world, the availability of particular valuation methods can sometimes make a huge difference in the ratable value. With a few exceptions (most notably York Museums), it had been broadly assumed that public buildings occupied other than for profit had to be valued on the contractors basis – an annual percentage of the costs of construction of a modern equivalent – and that the receipts and expenditure method based on the ability to generate a surplus/profit was not available.

In Hughes v. Exeter City Council the Lands Chamber (Holgate J and Mr Trott) carried out an extensive review of the underlying principles and held that there was no principle that prevented the receipts and expenditure method from being used for buildings occupied other than for profit where the circumstances and the evidence justified it.

The result in respect of the Royal Albert Memorial Museum in Exeter (“RAMM”) was to reduce the RV based on the contractor’s basis of around £1/2m for which the VO argued to just £1 based on the R&E. Similar results can be expected in all other cases to which the approach is applied.

The decision itself was particularly directed at grand, listed civic museums but the VO, in seeking permission to appeal, claimed that it could have very wide-ranging implications for other public buildings putting £billions of RV at risk.

The Court of Appeal rejected as unarguable the VO’s central contention that buildings occupied by socio-economic reasons by public authorities had to be valued on the (often highly disadvantageous) contractor’s basis, thus potentially opening the floodgates which the VO feared.

David Forsdick QC who acted for the City will be hosting a webinar shortly particularly for local authorities interested in the implications of this judgment for other public buildings. It will address the scope for use of this judgment to expand the range of public buildings potentially covered by the principle and the evidential requirements to succeed. It will also address the correct approach to lottery grant funded public buildings in the light of RAMM.

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