Although retailers in a town centre compete with each other for trade, when it comes to challenging the level of rates payable, they are all on the same side. To secure rates reductions, it is necessary for retailers to join forces and work together to persuade the Government’s Valuation Office that the values applied at a Rating Revaluation are too high and should be reduced.
A town centre typically has over 200 retailers that are advised by up to 70 separate rating agents. So, how is it possible to get everyone working together to negotiate effectively with the Valuation Office? Were each of the 70 agents to attempt to negotiate with the Valuation Office on an individual basis, it would be chaotic and unlikely to result in a satisfactory outcome.
What are RSA Town Committees?
To address this situation, the Rating Surveyors Association (RSA) Retail Panel establish and operate a nationwide network of Town Committees throughout England and Wales. Each RSA Town Committee is responsible for negotiating with the Valuation Office to secure a coordinated agreement of a scheme of Zone A values for a particular town centre. This is no simple matter and involves collation and analysis of rental evidence; agreement of the results; clarification of any evidence not agreed; drawing conclusions; agreement of a valuation basis; reporting back; and receiving confirmation of acceptance from all the agents involved. Following this the negotiations then take place on the individual appeals submitted by the agents acting for the retailers in that town centre.
Having chaired the RSA Retail Panel since 2010, I have taken a leading role in establishing this national Town Committee network and ensuring that the process works as well as possible to maximise rates savings in the retail sector. All the appointments to be a member of an RSA Town Committee are to rating agents with specialist knowledge of the town concerned.
Which towns are covered by an RSA Town Committee?
Virtually every town in England and Wales with a peak Zone A value above £45 psf will have been covered by an RSA Town Committee. In addition to major retailing locations such as Bluewater, Manchester, Newcastle, Cardiff and London’s Oxford Street, smaller locations – like Penzance, Haverfordwest, Workington, Berwick-upon-Tweed and Margate – are also covered. For the 2010 Rating Revaluation, more than 400 separate Town Committees were established across England and Wales. Reflecting the changing fortunes of many locations, for the 2010 Revaluation a number of new town centres were covered by an RSA Town Committee for the first time.
However, at the same time, it was decided that a significant number of declining towns with falling values would no longer have an RSA Town Committee. This RSA Town Committee network has been highly successful and, in my view, enables the rate savings from appeals to be maximised by giving town centres a single, strong negotiating position. Until an agreement is reached with the Town Committee, the Valuation Office will be unable to resolve any of the outstanding appeals. In addition through detailed arrangements put in place by the RSA Retail Panel, the individual Town Committees are able to efficiently collate all the relevant rental evidence in a town centre.
The Government’s Valuation Office recognise that the RSA Town Committee structure also benefits them as it provides an established coordinated and efficient approach to the agreement of the valuation basis for the main retailing locations in the country. The RSA Retail Panel has regular contact with the head office of the Valuation Office; for example, discussions regarding how to incorporate the Town Committee network negotiations into the Government’s new ‘Check Challenge Appeal’ system, which will be introduced for the 2017 Rating Revaluation, are ongoing.
Potential rate-savings from adverse changes to town centres
Adverse changes to town centres during a Rating Revaluation can also lead to substantial rate savings. These can include the closure of a town centre car park, refurbishment of a shopping centre, major roadworks or the opening of a competing shopping centre.
In 1999, I set up what is now the established scheme used by the leading rating agents to identify any adverse changes affecting town centres. More than 70 firms are included in this scheme, which enables the sharing of details of towns being affected by a ‘material change in circumstance’. On average over 100 potential rates saving situations are circulated each year.