Council Tax (Lowestoft)

– in the House of Commons at 6:59 pm on 29 January 2003.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jim Murphy.]

Photo of Bob Blizzard Bob Blizzard Labour, Waveney 7:00, 29 January 2003

It may seem incredible that, more than 10 years since the introduction of the council tax, there is still a major dispute about bandings—not the case of an individual householder, but that of a group of residents who live in homes that form part of an estate. It is the longest-running case that I have on my books. It began even before I was first elected in 1997, and I inherited it from my predecessor. I believe that it has become rather famous in the folklore of the Valuation Office agency and the valuation tribunal service. It has involved a succession of the VOA's senior officials, top regional tribunal staff, the ombudsman, the adjudicator's office, a Minister in the previous Government and, indeed, very briefly, when she first became a Minister in 1997, my right hon. Friend the Paymaster General, picking up correspondence from her predecessor.

The reason for this long saga is simple: injustices do not go away. The residents of Crestview Drive, Lowestoft feel a strong sense of injustice over their dealings with the VOA. My experience is that most people with a complaint usually give up after a period of time, even if it is not resolved. The fact that these residents have not abandoned their campaign is significant and says much about the case. I have probably spent more time on this case than any other from my constituents, but it is worth taking time in the House today to review what has happened, to draw out the key issues and to suggest a way forward.

I said that council tax was introduced more than 10 years ago. We know that that was done in a hurry by the then Government to escape from the disaster of the poll tax. But imagine how a group of residents felt when two years after their property bands had been established, they were told by the VOA that they were wrong and that they would be raised from B to C—and imagine how they felt when, a year later, some of them were told that their homes were not in fact band C and would be raised even further to band D.

For those people, most of them pensioners, that was a disaster to rival the poll tax. It gave rise to two reactions. First, it gave rise to the feeling that the VOA was incompetent—and that reaction is not surprising. However, it also made people look seriously at their road and their estate and compare their council tax bands and properties. The irony is that most of the estate was built by the same builder, with standard bungalow types, so it should be very easy to establish broad comparability and therefore a sense of fairness, especially in the eyes of residents, but the VOA has consistently been unable to do that over all these years.

I must say that the VOA has given over an enormous amount of time to the case, and some of the staff have tried to be as helpful as possible. That the case remains unresolved is due to one or two flaws in the system, but it is predominantly down to the intransigence of one official, the district valuation officer of the East Anglia valuation office. People can eventually accept that a bad mistake happened in the first place, but they cannot accept a refusal by officials to adopt a common-sense approach and fairness in the subsequent attempts to rectify the situation.

In October 1995, the director (east) of the VOA admitted in a letter:

"It is with very much regret that I have to agree with your comment that the VO has made a complete shambles of banding the properties in Crestview Drive."

The ombudsman later recognised that there was

"prima facie evidence of maladministration."

However, in March 1996, the then Economic Secretary, Angela Knight, declared:

"the senior official who conducted the inquiry has confirmed that on the evidence available the bandings of the bungalows in Crestview Drive and the adjoining side roads are now correct."

If only that were the case. Over the next four years, many homes on the estate regularly had their bandings altered, some by the VOA and some following tribunal decisions. Residents could see no consistency and lost confidence in the VOA.

What angered the residents most of all, however, was that whenever they pointed to comparable properties on the estate that were in bands lower than those to which their homes had been raised, the VOA would never accept that the mistake was with the original properties whose bands were raised, but proceeded to raise the banding of more and more properties on the estate. First, other properties in Crestview drive had bands put up, and then the closes off Crestview drive. The VOA even set about the older part of the estate, but I shall say more about that later. After each stage, the VOA stated that all the bandings are now correct, only to make further changes later. For example, No. 7 Sharon drive was once band C, increased to D, and then reduced to C again, although a director of the VOA later wrote to me and said that it should be a D.

My constituents have used various means available to them to try to gain redress. They took their case to a tribunal, but at that stage were inexperienced and, significantly, both the clerk and the chairman of the tribunal have told me that it was not a satisfactory hearing. That is why, when I became involved in the case later, the valuation tribunal co-operated with the adjudicator's office in identifying grounds on which an unprecedented second tribunal could be held, which took place in Lowestoft in November 1998. By that time senior VOA and tribunal staff had walked the area with me and could see that it appeared that there were clear discrepancies between the two parts of the estate in comparing properties and their bands.

The second tribunal was really significant, and revealed clearly the problem that we were dealing with: the district valuation officer for East Anglia. Although the joint appeal by eight residents was dismissed—the residents recognised that it had to be on the narrow grounds on which it was made—the tribunal decision deliberately contained a very important statement that helpfully provided a way forward:

"The Tribunal has been asked by all parties to comment on the original bandings of the appeal properties".

Although the tribunal said that there was evidence supporting the current bandings, it also rejected much of the evidence of the district valuer—a Mr. Bond—and said:

"The Tribunal has also considered all the sales evidence on the estate as submitted by Mr Bond . . . This evidence and its associated banding has caused concern to the Tribunal."

The tribunal concluded:

"This could question bandings on Crestview Drive being placed purely on sales evidence".

The tribunal looked at and commented on the case made by the residents that the banding of their properties should be compared and equalised with bandings on the eastern or older part of the estate. It recognised that

"The Appellants have made this case on the assumption that the eastern area has been correctly banded."

After all, bands had remained unchanged from the original bands of six years earlier. The tribunal stated:

"In conclusion the Tribunal does not consider there to be a significant difference in value between the two parts of the estate."

It therefore upheld what the residents had contended all along. It went on to say:

"The Regulations make provision for the Listing Officer to correct initial inaccuracies in the Valuation List."

That seems to be a bit of a steer.

That clearly paved the way for the VOA to put the relatively small number of Crestview properties into line with the hundreds of properties on the other part of the estate, especially as the tribunal most unusually and deliberately did not confirm the bandings of the Crestview properties as correct—a point that it later repeated in writing. At that stage of the case, I honestly believed that resolution would occur. Everyone seemed to be working towards that, except the district valuer, who, instead of altering the Crestview bandings, proceeded to carry out a review of hundreds of properties on the eastern estate, and eventually proposed to raise the bandings of about 120 of them seven years after they were first established. That was later described to me as "lunacy" by a senior VOA official, whom I shall not name.

What is worse is that the head of profession of the VOA had written to residents in March 1996 telling them that he had asked Mr. Bond to investigate discrepancies in that eastern estate and to take action to correct any anomaly. No bandings on the eastern estate were altered at that time. After the review, Mr. Bond repeatedly told residents that the bandings on the eastern estate were correct.

When I challenged Mr. Bond on his action in trying to raise bandings in the eastern estate that he had previously insisted were correct, and which, as Members might imagine, caused anxiety to residents there, he said that he was looking at the bandings because

"I was invited to do so by the local valuation tribunal."

That caused outrage at the tribunal service and the president wrote to Mr. Bond pointing out that his statement was not correct and demanding an apology, which he eventually received.

That episode demonstrates where the problem lies and is why I used the word "intransigence" at the beginning of my speech. Thankfully, owing to the good work of another VOA officer, the proposed band rises were dropped.

Another way of trying to resolve the problem was through an independent review of bandings in the Crestview area by another VOA district valuer. Although the VOA argued that the report showed no clear overall case for altering the Crestview bandings as the residents wanted, it none the less produced a different set of bandings from Mr. Bond's for many properties from the same sales evidence.

That reveals one of the key issues in this case: marginality and how to deal with it. Many of the properties are marginal between bands C and D. In one place there are two absolutely identical bungalows, but one is in band C and the other in band D—apparently because one has a footpath running alongside it.

Surely, the only sensible approach is to stand back a little and try to achieve broad comparability of properties in an area. It is clear that officials burying themselves in sales evidence can come up with different bandings from each other and indeed from residents' calculations, using their own sales evidence.

If someone had at an early stage simply tried to "straighten the pack" a little instead of ploughing on, raising bands over a wider and wider area, the case would have been sorted out, but instead the scope of the problem became ever wider. Many appeals were sparked off, with results that created further perceived inconsistencies.

Throughout this affair, I have been made aware of an apparent flaw in the tribunal process. The published guidance for appellants encourages them to show evidence of sales prices and/or bandings for similar properties. Residents in the area have on occasion taken forward masses of such evidence, but had it ruled out of order. I do not understand that.

What is to be done? First, will my right hon. Friend the Paymaster General study carefully what I have said today and will she be willing to receive a dossier of documentary evidence from me to support it?

Secondly, until last year all discussions with the VOA concentrated on trying to get the injustice in the bandings put right because that was what residents wanted. However, last year the question of compensation from the VOA emerged. Residents are now aware that the national review of banding is not too far off. The VOA has said that it will offer compensation, but only for those residents whose properties had their bands raised twice—from B to C and then to D. I certainly agree that those people deserve compensation.

However, the problem is wider. The crisis sparked off by the original shambles to which the VOA admits affected more residents than those who were twice re-banded. It involved a wider group—more than 20 people—in a great deal of anxiety, stress and inconvenience, owing to their protracted dealings with the district valuer, whose record I have just laid before the House.

I note that back in 1995 the director (east) of the VOA wrote:

"Some very serious errors have been made and these are recognized and I cannot but apologise for the effect that this has had on the residents in general in Crestview Drive."

I ask the House to note carefully the words "in general" in the admission of the fault. I am also aware of more recent changes to the VOA's code of practice on complaints and compensation, which have given the agency more flexibility.

Will my right hon. Friend ask the VOA to widen its definition of the people whom it is prepared to compensate? If it can do so, the case will finally be settled; it certainly deserves to be settled.

L

The Valuation Office Agency have yet to learn the lesson of this case. They continue to make a complete mess of banding properties, neglect to correct errors in the Valuation List, and attempt to cover up their mistakes.

See these websites links for details:

Valuation Office Agency Cover Ups
http://valuation-office-agency-voa.blogspot.com/

Carlisle Valuation Office Cover Ups
http://carlisle-valuation-office-agency.blogspot.com/

Submitted by LGO Reporter

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury) 7:15, 29 January 2003

I congratulate my hon. Friend Mr. Blizzard on securing the Adjournment debate. Those of us who listened to his speech can sense the frustration that he and his constituents feel on this long-running issue. I have been provided with the explanation of what has happened in his area with the decisions of the listing officer, the role of the Valuation Office agency, the appeals to the tribunal and the results of the tribunal hearings. He referred to the outcome of the tribunal hearing, but it is not always in such hearings that bandings are confirmed.

In fairness to my hon. Friend and his constituents, I should, rather than adding to the explanation of how we reached this point, move directly to the outstanding issues. I shall explain what can be done to try, as he pleaded in his closing remarks, to come to a sensible conclusion so that a line can be drawn and we can move on to the revaluations that will commence in 2005.

My hon. Friend's constituents remain concerned about three matters. He mentioned a meeting that he had in January 2002 with the director of council tax, when the full range of difficulties involved in the case were rehearsed. It was agreed that the VOA would investigate the potential for providing compensation under its code of practice on mistakes, and compensation was subsequently made to occupiers where there had been an increase in banding on two separate occasions, which is viewed as an error in the code of practice. As he said, that relates to 10 properties, whereas residents believed that 28 complainants should receive compensation.

The other outstanding matters are as follows. The residents remain unhappy, first, with the bands applied to their bungalows; secondly, with the bands applied to similar properties nearby; and thirdly, with the conduct of the listing officer and VOA in dealing with the issues that were raised.

The valuation tribunal system has considered the first issue. The listing officer cannot make the sought alterations, even if he believed that to be the correct course of action. I understand the frustration of my hon. Friend and his constituents. The provisions allow for appeal against the banding of the dwelling to the valuation tribunal and from there, on a point of law, to the High Court. The residents have raised valuation issues that have been aired before the tribunal twice. The appeals system makes no provision for rehearing or appeal in the event of further or better information coming to light.

The second issue is whether the other properties in Crestview drive and the nearby roads that are disputed by taxpayers are correctly banded. The residents and the listing officer have a difference of opinion on the valuation of the relevant properties. The valuation tribunal system has considered that. There is no statutory provision for resolving the residents' continuing dissatisfaction.

The VOA has already accepted the third issue. Apologies have been tendered locally and nationally. There is little to be gained from further apology, but the VOA none the less regrets the handling of the rebanding process and the earlier piecemeal reviews.

VOA policy on financial redress is to compensate people when a VOA error has caused them financial loss or worry and distress. The VOA believes that the bands in the Crestview drive locality are correct and in line with the valuation tribunal decisions. It also believes that the residents are correctly liable for payments based on the increased bands. However, it will consider making ex gratia payments for worry and distress. It has offered to make such payments, amounting to £650, to each of the residents whose dwellings have been subject to two band uplifts.

The VOA has reflected further on the matter. It understands, because of the handling of band alterations over several years, why many residents might have lost confidence in the agency's ability to achieve a correct and fair valuation list for the estate. It therefore appreciates that that has caused worry and distress to many residents as evidenced by the correspondence that was sent to the agency directly and through my hon. Friend.

The VOA has agreed that the handling errors had a significantly adverse effect on the personal lives of several residents, not only those who live in the dwellings that were the subject of the two separate band uplifts. For that reason, it has offered to make an exceptional ex gratia payment of £650 to each of the affected residents.

The VOA considers it appropriate to make the payments to those who have shown their anxiety by signing a document that expresses their wish to accept such a sum in compensation. My hon. Friend forwarded the document to the agency last year.

I hope that, having reflected on my comments, my hon. Friend will agree that the matter is closed, on the understandings that I have given the House. I hope that he will agree that, this evening, he, the local residents, the VOA and I can draw a line under the matter, and that we can move forward to the 2005 debate.

Notwithstanding the fact that the VOA itself has apologised, both locally and nationally, and that I know that the officers in the Department have done all that they possibly can within their statutory obligations to assist in this matter, I too apologise to my hon. Friend and his constituents.

I sincerely hope that we can now close this matter and move on.

Photo of Bob Blizzard Bob Blizzard Labour, Waveney

May I say on behalf of my constituents that they will be extremely grateful for what my right hon. Friend has said tonight regarding the compensation? On their behalf, I thank her and the VOA for bringing this matter to what I now believe will be a conclusion.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

I am very grateful for my hon. Friend's comments. His behaviour is a salutary lesson to all hon. Members that we should all persist in advancing a view on behalf of our constituents, whatever the circumstances. I am grateful for the gracious way in which he has responded to what I have said this evening. I therefore hope that the matter is now closed.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes past Seven o'clock.