High-level Technical Seminar:
Private and Public Sector Cooperation
in National Land Tenure Development in Eastern and Central Europe
University Residential Centre
1-5 April 1997
There are two main sources of revenue for local government in the UK. They are the council tax which is paid in respect of all dwellings - ie houses, flats, bungalows, etc, - in the local authority area and non-domestic rates which are paid in respect of business properties - ie shops, offices, factories, etc, - situated in the local authority area.
The valuation assessments on which these two types of property tax are based are provided by the Valuation Office Agency.
The VOA has a comprehensive network of some 100 local and regional offices throughout England, Wales and Scotland. The VOA has over 4500 staff and is the largest employer of professionally qualified valuation surveyors in the world.
The main functions of the VOA are to undertake valuations for:
Privatisation of public utilities in the UK has been a major change which has taken place over the last 15 years and movement from the public to the private sector continues through a variety of initiatives including further privatisations, the creation of executive agencys, compulsory competitive tendering, outsourcing, the private finance initiative and other measures designed to improve efficiency and effectiveness.
In connection with local government taxation, there is now private sector involvement in many billing, collection, and enforcement activities. There was also substantial private sector involvement in the assessment of dwellings for council tax purposes and it is this aspect in particular that will form the main subject of this paper.
To bring the position up to date, the VOA are currently involved in carrying out a "private sector experiment" which is intended to examine the scope for further involvement of the private sector in the referencing and assessment of properties for both non-domestic rating and council tax.
The monastery of the Middle Ages performed within limits many functions; it was in a sense the Poor Law guardian, the relieving officer, the parish doctor, and the schoolmaster of its day. It was practically the only agent of poor relief.
Under an Act in 1530 concerning punishment of beggars and vagabonds, justices were authorised to give licence to impotent persons to beg within certain limits, beggars begging out of their limits to be set in the stocks, but any person able to labour who begged was to be brought to the next market town and to "be tied to the end of a cart naked and be beaten with whips throughout the same market town or other place till his body be bloody by reason of such whipping."
The clergy were also directed to "exhort, move, stir, and provoke people to be liberal and bountifully to extend their good and charitable alms" for the purpose of this Act.
Under later legislation in 1551-52, it was required that collectors should "gently ask and demand of every man and woman, what they of their charity will be contented to give weekly toward the relief of the poor," and if any who were "able to further this charitable work do obstinately or frowardly refuse" they could be summoned by the bishop, who could "take order for the reformation thereof." Ten years later the bishop was further empowered to bind a person who obstinately refused to give according to his ability, to appear at quarter sessions, where the justices could rate him according to their discretion for poor relief and could, on default, commit him to prison.
The breakdown of the manorial system, the Black Death which had virtually abolished serfdom and had given the bondsman a liberty which often meant a liberty to starve, the end of the Wars of the Roses, which set free a large number of soldiers, the failure of voluntary subscriptions, and the dissolution of the monasteries all contributed to the necessity of putting poor relief on a satisfactory footing; and in the reign of Elizabeth rating was put on a compulsory basis by the Act of 1601. This dealt with the authorities, funds, recipients, and methods, and was the commencement of the Poor Law system.
It contained provisions covering the setting of the rate, the liability for payment of the rate, the assessment for properties in connection with the rate, relief and exemption from rates and the general administrative structure required to deal with valuation, billing, collection and enforcement matters, and the appeal system.
Non-domestic rates were essentially a continuation of the old rating system but, as the name implies, it was limited to non-domestic properties. The assessments of these properties, which had not been amended since 1973, were updated by a revaluation of all non-domestic properties in 1990 to provide new rating lists. Although the tax was collected by local government, the tax rate was set by central government and was called the National Non-domestic Rate (NNDR) or multiplier.
Provision was made for annual review of the tax rate (NNDR) by central government and for regular (5 yearly) revaluations of non-domestic properties.
The council tax is a local tax set by local government to help pay for local services. There is one bill per dwelling, whether it is a house, bungalow, flat, maisonette, mobile home or house boat, and whether it is owned or rented.
The bill is based upon the relative value of the property to others in the local area. The tax is payable by the owner/occupier or the tenant or, if the property is empty, by the owner of the dwelling.
The council tax is set by the local council and the amount at which it is set will depend on how much it and other public bodies in the area spend and how much they get from elsewhere. The amount payable also depends upon the valuation band in which the dwelling is placed.
There are a variety of discounts, reliefs and exemptions available to council taxpayers depending on a variety of circumstances and there is also financial assistance for people on low incomes.
Council taxpayers were able to appeal between 1 April 1993 and 30 November 1993 against the banding of the properties they occupied. After 30 November 1993 the rights of appeal are limited.