Valuation officers are required under Section 41 of the Local Government Finance Act 1988 to maintain accurate rating lists. When they become aware that a change is needed, such as that at the ports, they must make the alteration and also specify the date from which the change should become effective for rates charging purposes.
The principles concerning separate rateability where there is “exclusive occupation” and “paramount control” are long established. The leading case on the subject is a House of Lords decision from as far back as 193—6-Westminster Council v. Southern Railway Company and W.H. Smith and Son.
The VOA rated ports and properties within ports for the 2005 list based upon information supplied by the ports operators and indeed a significant number of separate assessments appeared in the rating lists for individual port occupiers at this stage, even before the ports review was initiated.
It was only after the list was compiled that—through routine work to keep the lists up to date—it was found that at Southampton Container Terminal the assessment for the 2000 list may not have correctly reflected the extent to which separate property within the Port of Southampton needed to be assessed. Action was therefore taken by the VOA to amend the list, but this action was strongly disputed by the other parties and legal and valuation argument followed: only once that appeal had been withdrawn, (in April 2006), were the VOA able to satisfy themselves of the correct approach in relation to certain types of port occupation and they immediately instigated the review of ports. Port operators were advised by letter of the ports review and its background in May 2006.
As a result of the review, which ended in 2008, 725 newly assessed properties were added to the ratings list. The decision to add each of these would have been made by the relevant valuation officer in each instance.
The review of ports by the Valuation Office Agency is to ensure that all individual business properties within and outside ports are rated fairly to ensure that the burden of contributions to funding local government is shared fairly among businesses around the country.
The Government have listened to the concerns of businesses with significant and unexpected backdated bills, including some businesses within ports. It has legislated to enable such bills to be repaid over an unprecedented eight years rather than in a single instalment, helping affected businesses to manage the impact on their cash flows during the downturn by reducing the amount they are required to pay now by 87.5 per cent.
As at October 8l 2009, local authorities have reported that ratepayers occupying 221 properties within ports had fully discharged their backdated liability and ratepayers occupying a further 200 business properties within ports had been granted a schedule of payments.
There has been some confusion about the application of this system, which has not ended and is still in place. The term “cumulo” (artificial hereditament) is used to describe properties (hereditaments) within the same occupation (of the port authority), that under the normal rules of rating would be shown as individual entries, as a single entry in the rating list.
It is clear from the regulations governing the use of this technique (Regulation 5 of the Non-Domestic Rating Miscellaneous Provisions (2) Regulations 1989 (SI 1989/ 2303)) that it is a method for identifying a statutory port authority only and not for combining properties occupied by other businesses, under the same rateable value as the port authority.
I refer the hon. Member to the answer given on 20 January 2010, Official Report, column 387W.
Most proposals (appeals) are not specific about the particular issues they wish to challenge. The Valuation Office Agency is not therefore able to provide details as to which proposals that result in a change to the rating list were allowed (i) in whole or (ii) in part.
The Valuation Office Agency has not issued guidance to local authorities on this matter. The Department has not issued specific guidance to local authorities regarding the collection of backdated liabilities for port based ratepayers. However, we have issued guidance and information on collecting monies under the eight year schedule of payments scheme through an information letter that can be found at:
The Government have listened to the concerns of businesses with significant and unexpected backdated bills, including some businesses within ports. They have legislated to enable such bills to be repaid over an unprecedented eight years rather than in a single instalment, helping affected businesses to manage the impact on their cash flows during the downturn by reducing the amount they are required to pay now by 87.5 per cent. and assist authorities by being able to collect the money over the eight years.
As at 8 October 2009, local authorities have reported that ratepayers occupying 221 properties within ports had fully discharged their backdated liability and ratepayers occupying a further 200 business properties within ports had been granted a schedule of payments.