The Completion of NNDR1 forms is a complex balancing act looking both, back at NNDR3 forms to review the previous year’s submissions and build on them whilst looking forward to forecast for provisions on appeal in the year ahead.
Going into 2021 a lot has happened in the last year that will impact forecasting capabilities largely in part to the COVID pandemic but in addition to this a number of Group Pre-Challenge Reviews (GPCR) are now coming to a conclusion. Most notably agreements have been reached in three key areas; Fire Stations, Hospitals and Universities.
Group Pre-Challenge Reviews
The Group Pre-Challenge Reviews effectively allow ratepayers or property occupiers to challenge the basis of the valuation carried out by the Valuation Office Agency (VOA). The outcome of these GPCR’s can be far-reaching for Billing Authorities in terms of forecasting because they can affect the rateable value of all properties that fall within the same category as the properties who formed the initial review group.
Timing wise these GPCR’s were not entirely unexpected, following the publishing of the 2017 rating list and the then new appeal procedure, there was a lot of initial uncertainty and issues with getting the IT submissions process to a state where it was useable. Now this is the case we expect more GPCR’s to progress in a number of different areas that will impact future forecasting capabilities.
Fire Stations are valued on a contractors method of valuation and a GPCR was formed to look at the various elements of these valuations including build costs, age and obsolescence, land values etc. This has led to a memorandum of agreement where there have been various changes to the VOA’s fire stations manual which was published in 2017, for example the price per metre square applied to a fire station assessment has been reduced and the age and obsolescence of fire stations have been reduced. We know that the suggested reduction on fire stations is approx. 10%, however taking a blanket approach would not be accurate and could lead to under or over provision.
With 1,398 fire stations in England alone, some may not reduce in value at all and some will reduce by more than 30%. On this basis Billing Authorities really need to consider using an experienced valuer who can understand the agreement that has been reached and can review each Fire Station in their area to ensure the most accurate forecast can be made.
Hospitals is another area where GPCR’s have proven successful and although the valuation method still remains on a ‘contractor basis’ adjustments will need to be made as a result. With around 1250 hospitals across the UK (including both NHS and private) Billing Authorities need to be forecasting for potential losses now in order to make provisions which will be backdated to 2017. Initial guidance has suggested a reduction of 10% in rateable value of these property types as a starting point, but as with Fire Stations you really need to understand the complexities involved in each individual agreement.
Universities are another area Billing Authorities need to consider thanks to a successful GPCR. With 106 universities in England, the forecasting will not necessarily impact every Authority, nor to as high a degree as Fire stations and Hospitals, nevertheless provisions still need to be made.
Other GPCR’s to expect in the year ahead
These GPCR’s have largely been driven by both Agents and individual ratepayers following the implementation of the 2017 rating list where limited or no consultation with the VOA was held in relation to these valuations. This has effectively opened the door for other GPCR’s to be put forward, with ongoing discussions currently taking place in the areas of Schools, Colleges and Leisure Centres, which the valuation team at Wilks Head & Eve are keeping a close eye on.
Wilks Head & Eve approach
We are currently working with a number of Local Authorities in relation to some of these classes of property and so have an understanding of the types of agreements being reached including Surrey County Council, Hertfordshire County Council, and Warwickshire Council. Our approach involves taking a meticulous line-by-line approach and looking at these local appeals in conjunction with the bigger picture national data, ensuring our clients arrive at a more meaningful, accurate figure from the outset. As part of our service, we continue to monitor and inform them of new GPCR’s on the horizon that could potentially impact them going forward.
If you want to find out more about our forecasting capabilities or need help compiling your NNDR 1 or NNDR3 forms for submission please contact firstname.lastname@example.org for more information now.