Valuation Officer Examined on Business Rate Hike

Published on 2 February 2009

David Jackson, Valuation Officer for East Anglia, appeared before Councillors, local business people and the webcast cameras of Epping Forest District Council to explain why he increased local Non-Domestic Rate (business rates) for shopkeepers during the worst recession in many years. Mr Jackson set out his case and was then cross-examined by Councillors of the Overview and Scrutiny Committee at the Civic Offices on Thursday 28 January.

Councillor Lesley Wagland suggested to Mr Jackson that his revaluation of local businesses ‘might be wrong’ and urged him to relook at the ‘real market’ in 2008.

Councillor Peter Spencer and Councillor Lesley Wagland pressed Mr Jackson concerning rate increases in Buckhurst Hill.

Mr Jackson acknowledged that previous rate levels had been wrongly applied in Buckhurst Hill, leading to the big increase. Councillor Peter Spencer asked if natural justice was served by such a large increase, especially before the regular five-year review. Mr Jackson felt he had to take account of new information in resetting the Business Rate.

In response to Councillor Lesley Wagland, Mr Jackson said that his role was impartial and not solely to extract the highest possible rate. He apologised to any shopkeeper where his staff had announced to shopkeepers that they had ‘Come to put the rates up.”  Mrs Wagland challenged Mr Jackson. She felt the Valuation Officer had approached the process from the wrong perspective.

Councillor Wagland compared the ‘Waitrose effect’ of a major grocery store being applied to small businesses such as the local newsagent. She asked Mr Jackson to ensure small businesses were aware they had until 31 March to appeal against the original 2005 valuation list and that they could appeal against the 2010 list from 1 April.

Councillor Derek Jacobs raised similar concerns on behalf of shopkeepers in Ongar. He suggested that rates in Ongar appeared to exceed those of London Boroughs. Mr Jackson said the rateable value for Ongar was based on the evidence for that area. It was not directly comparable to other areas.

Under further questioning, Mr Jackson said shopkeepers affected by road works in Ongar and elsewhere should appeal for a temporary rate reduction.

Councillor John Knapman developed the points made by Councillor Wagland concerning the definition of a small business in comparison with a large business such as Waitrose. Councillor Knapman also asked how the Valuation Office took account of market conditions. Mr Jackson confirmed to Councillor Knapman that should rateable values go down, business rates should go down, too.

Councillor Knapman was frustrated that despite the poor economic conditions in which local Councils such as Epping Forest District and Essex County Council strived to keep businesses going the Valuations Office could push some under. Councillor Chris Whitbread added that the review had been carried out during the economic boom but had been implemented in the depths of recession. He did not think the local impact was neutral even if it had been nationally and he called for Government action to solve the problem.

Councillor Jon Whitehouse and Councillor Richard Bassett made further challenges. Councillor Whitehouse asked how transitional relief might be applied. Councillor Bassett was concerned that small businesses in his area (Nazeing) had seen business rates increase from £13,000 per year to £19,000 partly because of changes to the small business rate threshold. Councillor Bassett asked if the Valuation Office was geared up to the number of appeals it was going to get.

Mr Jackson assured Councillors his office would deal with every appeal.

Councillor Syd Stavrou established that the viability of businesses played no part in the valuation.

After a long and searching examination of the reasons for the increase, Overview and Scrutiny Committee Chairman Councillor Richard Morgan thanked David Jackson, Councillors and members of the public for their contributions.

For more information on business rates:

• View the Overview and Scrutiny Webcast

• Visit the business rates section of businesslink.gov.uk

• Visit Epping Forest District Council's pages on business rates

Councillors will examine plans for health services provided to residents by north London hospitals at its next meeting on 4 March 2010.

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