TheValuation Tribunal Service
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Annual Report and Accounts 2007-08 Ref: Qd12753 File: Qd12753b (p) Date: 22.7.08
TheValuation Tribunal Service
Annual Report and Accounts 2007-08
Presented to Parliament pursuant to Schedule 4, paragraph 20 (4b) of the Local Government Act 2003 Ordered by the House of Commons to be printed 17 July 2008 HC769 London: The Stationery Office £18.55 Ref: Qd12753 File: Qd12753b (p) Date: 21.7.08
© Crown Copyright 2008 The text in this document (excluding the Royal Arms and other departmental or agency logos) may be reproduced free of charge in any format or medium providing it is reproduced accurately and not used in a misleading context. The material must be acknowledged as Crown copyright and the title of the document specified. Where we have identified any third party copyright material you will need to obtain permission from the copyright holders concerned. For any other use of this material please write to Office of Public Sector Information, Information Policy Team, Kew, Richmond, Surrey TW9 4DU or e-mail: [email protected] ISBN: 978010295523 1 Ref: Qd12753 File: Qd12753b (p) Date: 21.7.08
Contents Service Tribunal Valuation The Annual Report and Accounts 2007-08 Accounts and Report Annual
Chairman’s statement 2 Foreword to the financial statements 40
Chief Executive’s statement 3 Statement of the Board’s and Chief Executive’s responsibilities 41 Our services and what we do 4 Statement on internal control 42 Workload 7 Report by the internal auditors 47 Our people 10 Certificate and Report of the Our estate 14 Comptroller and Auditor General Governance and leadership 18 to the Houses of Parliament 48
Our public interests 22 Income and expenditure account 50
Management commentary 24 Statement of recognised gains and losses 51 Remuneration report 36 Balance sheet 52
Cash flow statement 53
Notes to the accounts 54
Accounts direction 72
Ref: Qd12753 File: Qd12753b-alt p49 (p) Date: 22.7.08
Chairman’s statement
The year under review has developing a user focused service, public. Many members now sit for certainly been a very full one and she has energised our work to more than one tribunal, which for the VTS. Not only did we ensure that the valuation tribunals permits the service to benefit to welcome a new chief executive, are seen as fair and independent. the full from their training and Dr Christina Townsend, but also Recognising the changes which experience. A number of them we saw some important strands will be needed to support the also volunteer to take on roles as of our strategy coming to fruition, advent of a single tribunal, our training champions, appraisers in particular the passing of the staff are now actively engaged and mentors, roles which are legislation to permit the creation in planning for this changed designed to assist the service to of a single Valuation Tribunal for landscape. maintain its standards. We are England with a national President, grateful to them all. This year also saw the completion and the completion of the work of their terms of service of two of The last year has also been a busy necessary to introduce a system our Board members, Paul Wood, one for our staff and we are of direct appeals in relation who has served as Deputy appreciative of their hard work. to our council tax work. These Chairman since 2004 and Ted I recognise that in the year ahead, developments ensure that we are Gunby who was one of our two we will be asking our staff and the moving forward in line with good independent members. I want to volunteer members to continue practice in tribunals. thank them both for the to adapt to the changes coming For a period during the early part commitment they made to their with a single tribunal and a new of the year, our two directors, Board role. A Board needs president. This programme of Antonio Masella and Alan Begg diversity and a range of skills to work keeps us in regular dialogue were jointly acting as Chief operate effectively, and Paul and with our sponsor team, who Executive. They maintained a Ted in their different ways have continue to be supportive and calm and steady state for us and been stalwart supporters. I am encouraging. We are all I am grateful to them for their pleased to welcome to the Board committed to the smooth and support. Tina Townsend has two new members, Ian Tighe and effective introduction of the new joined us at an exciting time for John O’Shea, who took up their tribunal, and look forward to the VTS. She roles in April, and to record the welcoming a new president during had previously been the Chief appointment for a further term of the course of the year. Executive of the Appeals Service, Peter Lawton, who has become and had taken that organisation Deputy Chairman. into the new set-up for tribunals, In the tribunals themselves, the the Tribunals Service. She brings a volunteer members continue to strong commitment to further provide an excellent service to the Anne Galbraith OBE Chairman, VTS
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Chief Executive’s Service Tribunal Valuation The statement Annual Report and Accounts 2007-08 Accounts and Report Annual
I took up post in July 2007 and affected by factors, such as the the same locality. Following a in my first two months travelled annual bills sent out by councils, review of the estates strategy, the around the country and met most and every year this fluctuates. Board decided to accelerate the of the staff. I was impressed with Our current expectation is that closure of offices. In particular, it is their commitment to serving both our workload in terms of business planned in the coming year for a tribunal users and the volunteer rates could rise as we see the substantial proportion of our staff members who sit on tribunals. impact of the recently enacted to be located at an enlarged Empty Property Rates legislation. Whitechapel site. This will result in Our focus for the year has been our head office staff being based to review and strengthen our Each year we carry out a survey alongside staff supporting tribunal administrative processes associated of people unrepresented when members and tribunal users at a with supporting the 56 valuation presenting their case. I am pleased busy site. Office accommodation tribunals in England, working that the overall satisfaction in 2007 for our Chairman and the new towards a greater emphasis on was 78%, an increase of 5% over national President when appointed standardisation of processes across the previous year. I am pleased is planned to be at this site as well. our four regions. This consistency too that the perception of the Although it is for each of these in our processes is important to independence of the tribunal rose individuals to decide where they us as it ensures that tribunal users to 53%, a 17% improvement on wish to be based, it is hoped that receive the same standard of the previous year. I am expecting they will spend some time at what customer service from all our staff. further improvements in the next is planned to become our main We have introduced a number of financial year as a result of our office base. initiatives and policies, such as recent implementation of Appeals our approach on postponements Direct, a process which enables In my first year in post, I have been and active case management of those unrepresented individuals particularly grateful for the support workload. These initiatives have appealing against their council tax I have received and significant significantly assisted valuation valuation to come to us directly contribution made by my tribunals in managing their case rather than via the Valuation colleagues at the Chief Executive’s load at hearings and in being Office Agency. I recognise the office and the Regional Managers. able to focus on their statutory need for improvement to the I also wish to thank all staff for function of hearing and perceived fairness of the tribunal their dedication at a time when determining appeals before them. hearing itself from the current they have been facing change, 55% (58% in 2006) and we will be including the closure of offices. During the year, 172,449 appeals developing training modules for were cleared, either through members that will focus on a actual heard cases at valuation perception of independence as tribunals or through negotiation well as fairness. by the parties leading up to the Dr Christina Townsend hearing itself. Valuation tribunals During the course of the year we have held 1,732 hearings. Our closed three of our 21 offices and Chief Executive, VTS workload on council tax is replaced one office with another in 14 July 2008
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Our services and what we do
The Valuation Valuation tribunals Make up of valuation Tribunal Service Established by the Local tribunals The Valuation Tribunal Service Government Finance Act 1988, The 56 tribunals are headed by (VTS) was set up by the Local valuation tribunals are statutory presidents elected by the Government Act 2003 and bodies with jurisdiction to hear membership of each tribunal. established as a non-departmental appeals against: A President is also one of the public body on 1 April 2004. » business rates elected chairmen. As at 31 March Sponsored by the Department 2008 there were a total of 834 » council tax valuation for Communities and Local members of valuation tribunals. Government (CLG), the VTS » council tax liability The total number of members has supports the operation of » completion notices declined since 2004-05 as more valuation tribunals by providing » drainage rate assessments use has been made of cross the following services: tribunal membership and efforts » penalty notices for failure to made to match members more » Accommodation. provide requested rental closely with actual and projected » Staffing (including clerks to information. workload at hearings. This tribunals). Valuation tribunals are reduced membership permits » Information technology. independent of the Valuation more regular participation at » Equipment. Office Agency (VOA) that sets tribunals for members, and takes » Training for members and staff rateable values on non-domestic full advantage of well trained and of (including clerks to) tribunals. (business) properties and council committed members. tax bands for homes, and the » General advice about procedure Members of valuation tribunals councils that send out the rates relating to the proceedings are volunteers who come from all and council tax bills. There are before tribunals. walks of life and receive training 56 valuation tribunals in England, to support them in their statutory administered out of 16 offices role. They commit to one hearing supported by a total of 104 staff day per month and receive (96.4 full time equivalents). There reimbursement of expenses are a further 16 staff based in the incurred based on prescribed Chief Executive’s Office located in amounts determined by the Angel Islington, London. Secretary of State. In certain
Valuation tribunals are independent of the Valuation Office Agency (VOA) that sets rateable values on non-domestic (business) properties and council tax bands for homes, and the councils that send out the rates and council tax bills < CONTENTS Ref: Qd12753 File: Qd12753b-alt p49 (p) Date: 22.7.08 The Valuation Tribunal Service Tribunal Valuation The Annual Report and Accounts 2007-08 Accounts and Report Annual
MEMBERSHIP TOTALS
1,500
1,000 1,200 1,084 916 834 500
0 2004-05 2005-06 2006-07 2007-08 834 This reduced circumstances, members may council (in the case of council tax membership permits also receive reimbursement at liability appeals) do not agree with prescribed rates in respect of a ratepayer or council taxpayer’s more regular financial loss incurred as a result contention and the ratepayer or participation at of undertaking tribunal duties. taxpayer seeks a resolution to Some members serve on more the matter. tribunals for than one valuation tribunal. » Business rates appeals are members A chairman and a maximum of forwarded to valuation two members preside at tribunal tribunals by the VOA under hearings, and they are supported a regulatory framework that » Until 1 April 2008, council tax at hearings by a salaried clerk requires them to transmit any valuation (banding) appeals who provides procedural and proposals (initial challenges) were also forwarded to technical advice. that they have not resolved valuation tribunals by the VOA after a three month period. This under a regulatory framework is an automated process, and requiring the VOA to transmit Appeals due to the large volume of any proposals that they had not Appeals arise when the VOA challenges made, the number of resolved within a six month (in the case of business rates or proposals transmitted as period. The regulatory process council tax valuation) or the appeals is also large in volume. has now been amended to
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126,514 During the year under review, valuation tribunals received a total of 126,514 appeals
allow such appeals to be made Not all appeals lodged with than through the body whose direct to the valuation tribunal valuation tribunals result in a decision is being challenged (the under a system called ‘Appeals hearing, as some appeals are Valuation Office Agency). Work Direct’ – see below. agreed through negotiation in this area has involved detailed » Liability appeals against a between the parties leading up to changes in our IT processes as well council’s decision are made the hearing date. 58% of all types as our administrative processes. direct to the valuation tribunal of appeals listed for hearing by a We completed our IT changes and and have to be made within valuation tribunal were settled associated testing in February and two months of the date of the (61% in 2006-07). We start the implemented training for staff in Council’s decision. In cases new financial year with a carry March. This training prepared where a council has failed to forward figure of 78,173 appeals. staff to handle appeals received respond to an individual within under this new regulatory process. this two month period, the To underpin this training, we timescale for appealing to a Appeals Direct developed management valuation tribunal becomes four During the year we have been instructions for staff to guide months, starting from the date working in partnership with our them through the new the initial challenge was made sponsoring department to regulations, administration and Our services and what we do we what and Our services by the individual. introduce a new process for how IT processes. council tax appeals are made to We started the 2007-08 financial This is a major change for both the valuation tribunals. Appeals Direct year with 124,211 appeals brought Valuation Tribunal Service and was introduced on 1 April 2008 forward, having cleared a total of valuation tribunals in further under the Council Tax 243,279 appeals during the demonstrating our independence (Valuations, Alteration of Lists and previous year. During the year in the appeal system, whilst we Appeals) (England) Regulations under review, valuation tribunals continue to build on our aim of 2008, which allows appeals to be received a total of 126,514 appeals. maintaining fairness in the process. made direct to the tribunal rather
Brought forward Carried forward on Type of appeal 1 April 2007 Received Cleared 31 March 2008 Business rates (1990 Rating List) 81 0 41 41 Business rates (1995 Rating List) 352 55 123 148 Business rates (2000 Rating List) 5241 333 2270 3,304 Business rates (2005 Rating List) 109,210 90,669 135,615 64,264 Council tax valuation list 9008 34,340 33,390 9,958 Council tax liability 319 883 801 401 Business rate rent return penalties 32 234 209 57 Total 124,211 126,514 172,449 78,173
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Workload Service Tribunal Valuation The Annual Report and Accounts 2007-08 Accounts and Report Annual
The majority of the workload of "11&"-43&$&*7&%"/%$-&"3&% the tribunals in terms of appeals received comes from the 2005 Rating List, which is based on the revaluation of business properties that took place on 1 April 2005. 135,615 appeals have been cleared during the year. Trends over the four years since the VTS was established show that there has been a fall in total appeals received. There has been a marked fall in business rate appeals (NDR). This has particularly been the case since 1 April 2005 and the introduction of the 2005 Rating List. A likely 5PUBMBQQFBMTSFDFJWFE /%3BQQFBMTSFDFJWFE $5CBOEJOHBQQFBMTSFDFJWFE explanation for the reduction 5PUBMBQQFBMTDMFBSFE /%3BQQFBMTDMFBSFE $5CBOEJOHBQQFBMTDMFBSFE is that the 1995 and 2000 lists were both covered by regulations which encouraged early submission of proposals, but in part, to the national media similar regulations were not made coverage on council tax during The majority of the for the 2005 List. There is no time the year. This coverage has lead to restriction attached to making an a resurgence of interest in the workload of the appeal under the 2005 List. banding of properties, which were tribunals in terms set in 1993 and are based on Trends also show a slight increase of appeals received values at 1991 prices. in the numbers of council tax comes from the 2005 valuation (CT banding) appeals received in the last two years. This Rating List increase can be attributed, at least
172,449 172,449 APPEALS WERE CLEARED BY < VALUATION TRIBUNALS DURING THE YEAR CONTENTS Ref: Qd12753 File: Qd12753b-alt p49 (p) Date: 22.7.08
COUNCIL TAX ‘OTHER’ CASES LISTED 2006-08
100%
80%
The chart on the right shows an 60% analysis of council tax valuation appeals listed and the percentages 40% of those listed cases that are orkload subsequently settled through 20%
W negotiation between the parties (appellant and VOA Listing Officer), decided at the hearing 0% or deferred (postponed or Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 adjourned). The proportions of 2006-07 2006-07 2006-07 2006-07 2007-08 2007-08 2007-08 2007-08 decided appeals for this year have Listed appeals decided Listed appeals deferred Listed appeals settled increased as more appellants opt for a tribunal determination.
This chart shows a break down of other council tax (CT) appeals $06/$*-5"9#"/%*/($"4&4-*45&% (such as liability and completion notices). The proportion of appeals decided by a valuation tribunal in respect of these appeals is much higher. The reason for this is that, at the point of making these types of appeals, most of the evidence and discussions surrounding the particular issues have already been aired between the parties and so the matter is referred to the
tribunal for immediate resolution. There is, therefore, much more 2 2 2 2 2 2 2 2 certainty that such appeals will
require a tribunal hearing for a -JTUFEBQQFBMTEFDJEFE -JTUFEBQQFBMTEFGFSSFE -JTUFEBQQFBMTTFUUMFE determination.
The proportions of decided appeals for this year have increased as more appellants opt for a tribunal determination < CONTENTS Ref: Qd12753 File: Qd12753b-alt p49 (p) Date: 22.7.08
4,594 Service Tribunal Valuation The 4,594 reasoned decisions were issued by valuation tribunals during this year Annual Report and Accounts 2007-08 Accounts and Report Annual
An important service standard The graph below shows the effect commitment for valuation of this process captured at tribunals is to issue a reasoned quarterly intervals. This more account of decisions regarding robust monitoring process has heard (contested) cases to the contributed greatly to our end of parties within 21 working days of year figure which, through the hearing date. In 2006-07, workload planning and careful valuation tribunals issued a total monitoring, the number of of 3,333 such reasoned decisions, reasoned decisions issued within of which 632 (19%) were issued 21 working days for this financial outside 21 working days, so our year has increased to 89%. focus for 2007-08 has been to 4,594 reasoned decisions were improve on this performance. issued by valuation tribunals Therefore, as part of the annual during this year. 3,589 appellants staff performance management attended a hearing to pursue an process for our clerks of valuation appeal in person, with 1,436 tribunals, we introduced a target appeals dealt with in the absence to ‘increase the number of of the appellant by request. This reasoned decisions issued within represents a 50% increase on last 21 working days by 5%’. year’s numbers of appearances at During the year 2007-08, we have tribunals (2,389), with a further introduced more robust recording 1,179 opting to have appeals heard and monitoring processes that in their absence. have improved the recording and management of our workload. PERCENTAGE OF REASONED DECISIONS ISSUED BEYOND 21 WORKING DAYS OF THE HEARING 35
30
25
20
15
10
5
0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2006-07 2006-07 2006-07 2006-07 2007-08 2007-08 2007-08 2007-08
Percentage over 21 working days < CONTENTS Ref: Qd12753 File: Qd12753b-alt p49 (p10) Date: 22.7.08
Our people
Actual numbers Full time The chart below shows the of staff in post equivalent numbers regional make-up of the total Chief Executive’s Office 16 16 membership broken down into Central Region 19 17.5 the four regions. East Region 25 24.1 REGIONAL MEMBERSHIP North Region 31 29.1 South Region 29 25.7
Staff numbers Employees belong to 30 local government pension schemes During 2007-08 we planned our South Central resources to employ 135 people, (according to locations) but employed an average of 127 with 89.2% (90% in 22% 24% (118 full time equivalents) during 2006‑07, 89% in 2005-06) the year of which 9% are from an of the workforce in ethnic minority background. a scheme. A number of posts became vacant REGIONAL MEMBERSHIP due to a closure of offices during the year and we concluded the Valuation tribunal membership financial year with 120 people East numbers South Central employed by us. Although this 22% may have had a positive impact During 2007-08, North 24% 19% on our target of ‘achieving 5% 27 new members were savings in accordance with the appointed as members of a 35% spending review,’ front line valuation tribunal in England. services have been stretched in a As at 31 March 2008 there were number of offices. However, this 834 members of valuation tribunals East has allowed us to accelerate our (655 men and 179 women), with North 19% focus on the introduction of 7.2% from an ethnic minority 35% various policies to encourage background and 9.4% recorded as There is currently an imbalance more effective working practices, having a disability. in the number of members in such as active case management. each region when compared to Region Number of members workload. The reason is partly We have a stable workforce. The North 292 average age of staff is 46.1 years a historical one based on Central 201 compared to 45.7 years in 2006-07 complements of individual East 159 and 45.1 years in 2005-06. During valuation tribunals as determined South 182 the course of the year 11 members by the Secretary of State, and also of staff resigned (11 in 2006-07) due to different approaches to and 3 retired (1 in 2006-07). recruitment in the 56 tribunals.
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NUMBER OF ATTENDEES AT MEMBER TRAINING EVENTS
300 The Valuation Tribunal Service Tribunal Valuation The
250
200
150
100
50 2007-08 Accounts and Report Annual
0 Advanced Council tax Member Member NNDR Presidents’ New/ Chairmen’s update appraisal at the induction prospective hearing Chairmen
Training and development The members’ Training and » Advanced Chairmen’s training; Members Development programme » Council tax update training; included a President’s induction We have also developed and » Member appraisal training; day held in June 2007, as well as a implemented a Training and continuation of the training » Member at the hearing training; Development programme for the modules developed in 2006. Our » New/prospective Chairmen wider tribunal membership, which aim continues to be to provide all training; was designed and developed to members with access to training provide at least one day’s training » Presidents’ Induction training; so that they may undertake their per member per annum. Members » National Non-Domestic Rating role with confidence. During this received a total of 691 training (NNDR) training. financial year, we have introduced days, which was received by 76% a new module aimed at of the membership. In addition we experienced chairmen to further held a Presidents’ and Chairmen’s refine and develop their skills at conference for 151 delegates in tribunal hearings. More Stratford-upon-Avon on 1 and specifically, the following events 2 October 2007. took place:
COURSE EVALUATION SCORES AT MEMBER TRAINING EVENTS
6
5
4
3
2
1 Advanced Council tax Member Member NNDR Presidents’ New/ Chairmen’s update appraisal at the induction prospective hearing Chairmen
6 – Excellent 4 – Good 2 – Poor 5 – Very good 3 – Room for improvement 1 – Very poor < 11 CONTENTS Ref: Qd12753 File: Qd12753b-alt p49 (p12) Date: 22.7.08
NUMBER OF ATTENDEES AT MANAGEMENT DEVELOPMENT PROGRAMMES
16
14
12
10
8
6
4
2
0 Clerks Clerks AS2 RM action RM action SPTO SPTO training training training learning learning training training module 1 module 2 group group module 1 module 2
Staff associated with the examination and implemented a mandatory, Staff training has been developed process. We also pay staff organisation wide equality and subscription fees to the Institute. diversity programme. More
Our people to support and underpin organisational priorities. Our Our aim is for all our staff advising specifically the following training focus has been to continue to the voluntary membership to events took place: support the administrative regions achieve the Institute’s corporate » Clerk of Valuation Tribunal introduced in 2006. We have also professional qualification. In management development concentrated on continued 2007‑08 we sponsored nine programme (modules 1 and 2). applications from staff for professional development for all » Senior Professional Tribunal qualification sponsorship (12 in our staff through in-house Officer (SPTO) management 2006-07). courses, seminars and our programme (modules 1 and 2). qualification sponsorship During the year there was an » Administrative Support (AS) programme. We encourage our emphasis on management Level 2 training. staff to study towards the development for our senior staff » Regional managers (RM) professional qualification and other staff with line learning groups to contribute to accredited by the Institute of management responsibilities. the sharing of good Revenues, Rating and Valuation We also increased our focus on management practice. (IRRV) and we will meet costs improved communication systems
NUMBER OF ATTENDEES AT ORGANISATIONAL PROGRAMMES
120
100
80
60
40
20
0 Appeals Diversity Regional Regional Board Direct training roadshows team build away day 12 < CONTENTS Ref: Qd12753 File: Qd12753b-alt p49 (p13) Date: 22.7.08
NUMBER OF ATTENDEES AT HEALTH AND SAFETY REQUIREMENTS
10 The Valuation Tribunal Service Tribunal Valuation The 9
8
7
6
5
4
3
2 2007-08 Accounts and Report Annual
1
0 Managing Basic Risk Risk Risk Risk Risk safely first aid assessment assessment assessment assessment management – DSE – foundation – lone worker – man-handling
We also held a range of In addition, and in keeping with Staff received a total of organisational programmes during our commitment to health and 573 training days, equating the year. These included: safety, we held a number of to an average of approximately » Equality and diversity development courses for our 4.8 training days per person. health and safety officers. These » Information road shows There were also a number of included: communicating: individual self development » Institute of Occupational – Updated staff handbook courses that we sponsored during Health ‘Managing Safely’. the year as part of the staff – Flexi scheme » Basic First Aid. appraisal process. – Absence management » Risk Assessment courses in: procedure. – Display screen equipment » Plain English course (provided (DSE) by the Plain English Campaign). – Lone workers » Regional team building events. – Manual handling » Appeals Direct IT and regulation training. – Risk management.
NUMBER OF ATTENDEES AT INDIVIDUAL LEARNING AND DEVELOPMENT NEEDS
12
10
8
6
4
2
0 Tax HR Pro Introduction Employment Mediation Plain Presentation Desktop changes personnel to property law English skills management update security (Landesk) < 13 CONTENTS Ref: Qd12753 File: Qd12753b-alt p49 (p14) Date: 22.7.08
Our estate
We have continued in our Whitechapel and Harrow). Overall, commitment to review our our footprint at these four offices During February 2008 portfolio of leases to ensure that was considerably larger than we we carried out an our estate is focused on the future required. We have also taken option appraisal operational requirements of the account of the government organisation. We brought to an initiative relating to ‘High focusing on the end our liability on Worcester, Performance Property’ aimed at future of our Maidstone, and Wokingham targeting better management of offices through natural breaks in assets. In consequence, we have London estate leases. We have also acquired a decided not to renew the replacement Peterborough office Croydon lease on expiry and in the suburbs (Werrington) and vacated the premises on 28 June this office was opened in October 2008. We will also be vacating office functions carried out in our 2007. This has all been achieved our Harrow office when the Angel office to Whitechapel. This without any disruption to the lease expires on 24 December will mean acquiring additional operation of valuation tribunals 2008. Croydon and Harrow space within Black Lion House. previously administered from administrations will transfer The effect of these changes in those offices. Thanks to the to our Whitechapel office London will be to reduce our co‑operation of staff and (Black Lion House) as this will footprint by almost half, and members, the service to our users bring further opportunities to nationally we have seen a 12.8% has continued to be delivered standardise processes, creating reduction in the last 12 months without interruption. greater harmonisation of in total office space previously practices, as well as creating more occupied. During February 2008 we carried flexibility in the deployment of out an option appraisal focusing One of the efficiency standards staff. We are currently in on the future of our London given to government departments negotiations to transfer head estate (Croydon, Angel, and non-departmental public bodies by the Office of Government Commerce is a recommendation for net internal area per person of 10m2 wherever possible. The VTS portfolio is made up of a mixture of property 12.8% types and our offices include a nationally we have seen a 12.8% reduction hearing room and retiring room in the last 12 months in total office space used as part of the judicial function of valuation tribunals, previously occupied accounting for an average of
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Map of the VTS regions and office locations The Valuation Tribunal Service Tribunal Valuation The
Northumberland 2007-08 Accounts and Report Annual
Tyne & Wear
Durham North Region Durham Teesside Cumbria
North Yorkshire
Lancashire East Yorkshire West Yorkshire Preston Greater Manchester Bolton South Doncaster Yorkshire Merseyside East Region Cheshire
Derbyshire Lincolnshire Peterborough Nottingham Nottinghamshire
Stafford Staffs Leicestershire Norfolk Shropshire Central Region W Midlands Northamptonshire Cambridgeshire Suffolk Worcester Warwickshire Hereford & Worcester Bedfordshire Bucks Essex Witham
Gloucestershire Hertfordshire Harrow Leamington Spa Oxfordshire Whitechapel Greater London Croydon Berkshire Wiltshire Weston-Super-Mare Surrey Kent Isles of Scilly Hampshire Somerset West East Sussex Sussex Dorset Devon
Isle of Wight Maidstone Cornwall Horsham Winchester
South Region Wokingham Plymouth
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505"-"3&"0'754&45"5& N¤
approximately 30% of the office space. Whilst the VTS portfolio currently stands at 42.11 m2 per person (FTE) including ‘judicial space’, this does represent a 19.5% improvement since the inception Our estate of the VTS. The operational costs associated with the estate budget for the year under review were £1,762,084 N¤1&31&340/ '5& "$3044754&45"5& of which 84% represents costs associated with rent, rates and service charges. As we move into the new financial year we will be reducing our estate further with the disposal of our current Winchester office and transferring the administration to our Weston-super-Mare office. Due to a lease end, we will also be relocating our existing Durham office to a new location in the Durham area.
Redundancy Our aim is to minimise staff and Maidstone, three part time exposure to redundancy and in staff (one professional grade and situations of office closures we two administrative grades) and aim to offer suitable alternative five full time staff (four employment through professional grade and one consultation meetings with administrative grade) became affected staff. However, with the redundant and these redundancy closure of Worcester, Wokingham payment costs totalled £137,500.
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PERCENTAGE OF ESTATE OPERATIONAL COSTS 2007-08
53.8% Rent 2.9% Heating and lighting The Valuation Tribunal Service Tribunal Valuation The 15.1% Rates 1.0% Insurance
15.3% Service charge 1.2% Property management
5.8% Maintenance 0.9% Other (including security)
4.0% Domestic services Annual Report and Accounts 2007-08 Accounts and Report Annual
Health and Safety The Committee comprises: Disability Discrimination Act The VTS publishes a Health and Antonio Masella (Chair). We continue to monitor our Safety Policy as part of its Paul Mountain (Health and Safety offices for their compliance with commitment to the health and Officer, North Region). the Disability Discrimination Act safety of all our staff, valuation (DDA) 2004, especially where Sarah Morgan (Health and Safety tribunal members and other there is a potential for the public Officer, Central Region). persons who are lawfully on to attend hearings within our VTS premises. David Jefferies (Health and Safety offices. One of our 16 offices Officer, South Region). (Bolton) remains non-compliant During the year under review, John Anderson (Health and Safety, in terms of DDA due to the fact there were three recorded East Region). that works required to make it accidents involving VTS staff. compliant are considered to be Although none was classed as Tom Gardener (Health and Safety, ‘unreasonable’ under the terms of reportable (more serious), one did Head Office). the legislation. result in an absence from work (compared with 16 in 2006-07 and 10 in 2005-06). The absence was as Asbestos Register a result of ankle ligament damage To ensure compliance with the caused by a slip down a staircase. Control of Asbestos at Work Regulations, we maintain asbestos The VTS monitors its statutory registers for each of our occupied responsibility through its Health buildings where we have a full and Safety Committee under repairing lease. These registers are terms of reference under the reviewed every two years. chairmanship of the Corporate Director.
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Governance and leadership
Corporate Governance: The VTS Board The VTS is governed by a non‑executive Board of seven, four of whom are Presidents or Chairmen of valuation tribunals. The VTS Chairman and members of the Board are appointed by the Secretary of State for Communities and Local Government. All Ministerial appointments to the VTS are subject to the Anne Galbraith OBE Paul Wood OBE Ronald Barham Code of Practice of the Chairman Deputy Chairman Commissioner for Public Appointments. The Chairman and the Board Secretary management, and staffing of the ensuring that the VTS complies ensure that new Board members VTS, for the formulation of with any statutory or receive appropriate induction strategy, and for the successful administrative requirements for training upon appointment delivery of results. As Accounting the use of public funds and covering all aspects of the VTS’ Officer she is responsible for its ensuring that high standards of operations. procedures and controls in corporate governance are There is a clear division of financial and other matters. Day observed at all times. The Board responsibility between the to day management is under the establishes the overall strategic Chairman and the Chief Executive. control of the two Executive direction of the organisation. It The Chairman is responsible for Directors, who with the Chief approves the VTS’ Corporate and the leadership of the Board, Executive form the Executive Business Plans and its Annual ensuring its effectiveness on all Management Team. The Chief Budget. It also oversees the aspects of its role. She facilitates Executive and Directors are also delivery of planned results by both the contribution of the members of the Senior monitoring performance against Board members and constructive Management team, which agreed strategic objectives relations between the Board and includes four regional managers and targets. who provide the operational the Executive. She represents the The Board has met a total of control over the regions of North, VTS to its external stakeholders at 10 times during the year. Two of Central, East and South. the highest levels. The Chief the meetings were substantially Executive has responsibility for Members of the Board have dedicated to strategy. The the overall organisation, corporate responsibility for Directors are present during Board
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Ted Gunby Peter Lawton Irene Robinson Michael Tildesley OBE
Meetings and on occasions A Register of Interests of members Deputy Chairman members of the SMT are invited of the Board is maintained and is Paul Wood OBE (Appointed on to attend. Board members are reviewed by the Board Audit 1 April 2004. Mr Wood completed provided with appropriate and Committee. The register is held by his term of appointment on timely information to enable the Resource Director. On specific 31 March 20081). Attended 10 them to discharge their duties issues where there may be a meetings during the year. effectively. potential conflict of interest, members are required to declare Members The Board is supported by a their interest and if appropriate, Peter Lawton (First appointed on number of committees under to withdraw from discussions. 13 July 20042). Has attended terms of reference. The standing 10 meetings during the year. committees of the Board are: Dr Ronald Barham (Appointed on » The Audit Committee Membership during 2007-08 1 April 2006 for a term expiring » The Remuneration Committee Chairman on 31 March 2009). Attended nine » The Training Strategy Anne Galbraith OBE (From 1 April meetings during the year. Committee 2004. Mrs Galbraith’s term of Ted Gunby (Appointed on 1 April appointment expires on 31 March The activities of these committees 2004. Mr Gunby completed his 2009). Attended 10 meetings are regularly reported to the Board term of appointment on 31 March during the year. and their minutes are made available 20081). Attended 10 meetings to all members of the Board. during the year.
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The Training Strategy Committee was established under terms of reference on 6 December 2007 to provide a greater focus on training undertaken by the voluntary membership
Michael Tildesley OBE James Stockwell (Independent comprises one Board member (Re‑appointed on 1 April 2007 to Member). (who acts as Chair of the a term expiring on 31 March Committee) four valuation The Chief Executive and Resource 2010). Attended nine meetings tribunal presidents, the Chief Director also attend the meetings. during the year. Executive, the Corporate Director During 2007-08, the Committee and the Training Manager (who Irene Robinson (Re-appointed on met four times. also acts as Secretary to the 1 April 2007 to a term expiring Committee). 31 March 2010). Attended nine Remuneration Committee meetings during the year. The Remuneration Committee Members of the Committee during 2007-08 were: 1 Mr Ian Tighe and Mr John O’Shea were appointed comprises three Board members, as Board members with effect 1 April 2008 to one of whom acts as Chair of the Peter Lawton (Chair) terms of appointments expiring 31 March 2011. Committee. Members of the Philip Harrison (President of 2 Mr Lawton was re-appointed to the Board on Committee during 2007-08 were: Manchester North Valuation 1 April 2008, to the position of Deputy Chairman. Ted Gunby (Chair) Tribunal) overnance and leadership and overnance Paul Wood OBE Jim Dixon (President of G Board Committees Anne Galbraith OBE. Lincolnshire Valuation Tribunal) Judi Ellis (President of Kent Audit Committee The Remuneration Committee Valuation Tribunal) The Audit Committee has written has written terms of reference and terms of reference and meets at has as its main task annual John Birkbeck (President of least four times a year. The consideration of the performance Cornwall Valuation Tribunal) Committee also meets with of the Chief Executive and the Christina Townsend (VTS Chief Internal Auditors and External Executive Management Team. Executive) Auditors. The Committee Further details of the work of the Antonio Masella (VTS Corporate comprises four members of the Committee are given in the Director) Board, one of whom acts as Chair Remuneration Report (page 36). Tracey Banham (VTS Training of the Committee, and one During 2007-08, the Committee Manager and Committee independent member. The Chair met twice to discharge its Secretary). and Independent Member are responsibilities. members of professional Training Strategy Committee accounting bodies. Members of the Leadership committee during 2007-08 were: The Training Strategy Committee was established under terms of Executive Management Team Irene Robinson (Chair) reference on 6 December 2007 to The Executive Management Team Ronald Barham provide a greater focus on training (EMT) comprises the Chief Paul Wood OBE undertaken by the voluntary Executive, the Corporate Director Peter Lawton membership. The Committee and the Resource Director. The
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Members of the EMT during 2007-08 were: with the means to protect Appointment Appointment ourselves from the adverse effects Name Position Started Ends of risk and to facilitate progress Dr Christina Townsend Chief Executive 2 July 2007 Permanent with meeting our organisational Alan Begg Resource Director 15 May 2006 Permanent aims. Antonio Masella Corporate Director 1 April 2004 Permanent Key risk indicators are identified and closely monitored in our role of the EMT is to implement Risk management organisation-wide risk register, operational and strategic Board- and strategy which is reviewed and updated approved plans, and provide We view the management of risk quarterly by the EMT, monitored strategic direction for staff. as a key component of our by the Audit Committee and Following the appointment of a governance framework and we discussed by the Board. The new Chief Executive on 2 July 2007 adopt a system for managing risks, Accounting Officer and EMT a review of the EMT, together with which complies with the propose, support and implement a review of the corporate principles set out in the ‘Orange risk policies agreed by the Board, governance decision making Book,’ Management of Risks – and encourage an open and process is in progress with a view Principles and Concepts, receptive approach to solving to widening decision making for published by HM Treasury in problems by risk owners and the organisation in 2008-09. October 2004. Our approach to managers at executive and risk is set out in our risk regional level. Our risk Senior Management Team management strategy, which sets management framework is closely The EMT are also members of the the tone and influences the aligned with the processes of Senior Management Team, culture of risk management internal control, accounting responsible for providing the day throughout the organisation, policies, audit policies, and to day operational control. During determining the acceptable levels reviews (in conjunction with CLG) the year the SMT has assisted in of risk exposure and the of the Management Statement developing strategy. Four members appropriate risk controls. and Financial Memorandum of the SMT held positions as issued to the Board. One of our objectives in Regional Managers. During 2007- establishing the risk appraisal 08 the Regional Managers were: A risk management workshop was process is to achieve assurance held on 19 December 2007, Name Region that we are managing our key risk attended by the Board and the Lesley Rutherford North exposures in an appropriate Senior Management Team, to Lee Anderson Central manner. This internal assurance develop a best practice approach Jon Bestow East enables us to comply with the to the identification and recording Murray Campbell South requirements placed upon us. of strategic risks. Work in this area However, the overriding objective continues into the new year. of the process is to provide us
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Our public interests
Equality and diversity » ensure that all new policies take to enable hearing impaired We developed our policies account of our legal duty to appellants to participate fully relating to equality and diversity promote equality; when attending a tribunal. Since to ensure that we meet our » establish systems of monitoring the creation of the VTS we have statutory obligations under the data which chart and measure carried out work to our estate Disability Discrimination Act progress; portfolio to ensure that wherever reasonable to do so, our offices 2005. We continue to make our » increase the representation, at have been adapted to be family of guidance leaflets all levels, of all minority groups compliant with the Disability available in the nine most within the organisation; and commonly used languages in the Discrimination Act requirements. » improve satisfaction across its country (English, Arabic, Bengali, diverse stakeholders including We also introduced in February Chinese, Gujurati, Polish, Punjabi, employees. 2008, as a pilot, a speech enabling Urdu and Vietnamese). During the service to our website called year, we accommodated 19 As a demonstration of this ‘Browse aloud’. This software will requests for translations of seven commitment, during 2007 all read the contents of any webpage, of our leaflets into six different employees took part in a full day ‘PDF’ file and or word document. In languages. In addition we had of Diversity Awareness Training. return for meeting an annual seven requests for large format licence fee, the VTS will have a link versions of the guidance leaflets in on its site to enable the public to other languages. We have also Disability download, free of charge, the provided an interpreter in Bangla. We value the skills and experience ‘Browse aloud’ software for use on During the year, we developed an that disabled people bring to the their PCs. In addition to reading Equality and Diversity Scheme to workforce and wish to make full the contents of the website in a meet with the requirements of use of the talents of disabled staff variety of languages and accents, the Equality and Human Rights and members, and to be user- the software contains a facility that Commission codes of practice and friendly towards appellants with explains the meaning of any word current equality and anti- disabilities. for the user. We will be evaluating the benefit of this software during discrimination legislation. The The VTS guidance leaflets and the next financial year. scheme provides a strategy and tribunal decision documents are framework for promoting equality offered in Braille, large print and and valuing diversity over the next audiotape. During the year we Customer survey two years. Our aim is to: received 11 requests for large print » raise the profile of equality and versions and two for audio format. We continue to build on our diversity throughout the VTS Signers and other communication improvements based on and valuation tribunals; assistance are provided on request stakeholder feedback. 2007-08
Primarily we need to raise awareness of the independence of valuation tribunals from the organisation whose decision is being challenged 22 < CONTENTS Ref: Qd12753 File: Qd12753b-alt p49 (p23) Date: 22.7.08
254 Service Tribunal Valuation The people interviewed for a survey of unrepresented appellants who attended valuation tribunal hearings to have their cases determined Annual Report and Accounts 2007-08 Accounts and Report Annual
was the third year that the VTS perspective. We will be The Data Protection Act 1998 has commissioned a survey of monitoring the impact of Appeals and Freedom of Information unrepresented appellants who Direct for council tax during the Act 2000 attended valuation tribunal year and including questions on During the year, the VTS received hearings to have their cases this topic in our next survey. and responded to nine requests determined. Over the summer of made under the Acts, compared 2007 254 people were interviewed to 14 in 2006-07. for this survey. The questions have Complaints been broadly similar from year to The VTS maintains a register of all year to allow comparison, but this complaints received in its offices. Document Handling and time we removed some questions During the year we raised a Data Security about matters over which we greater awareness of our We are working closely with have no control and introduced complaints policy to tribunal our sponsoring department to new questions about the users. Our Customer Charter and ensure that we fulfill Cabinet improvements that followed the Complaints Policy are published Office requirements and earlier surveys, namely the on the VTS website and issued to recommendations. We have introduction of a DVD and video anyone expressing dissatisfaction already taken steps to protect about the hearing process, a with the service they receive from information by encrypting any hearing reminder notice and time the administration. During the IT equipment which is slots for hearings. year under review, 49 complaints transferable (lap tops, USB The challenge for 2008-09 is to about the administration were devices). We will be developing a focus on the areas showing a registered (compared to security policy to cover, for decline in satisfaction, whilst 21 complaints in 2006-07 and example, handling data we continuing to further improve on 17 in 2005-06). Six complaints currently hold for HR related areas where we are doing well. were referred to the Corporate purposes and to address paper Primarily we need to raise Director for investigation for disposal in our offices, including awareness of the independence of maladministration, (compared to shredding facilities. valuation tribunals from the nine in 2006-07). No instances of The Accounting Officer has overall organisation whose decision is maladministration were found responsibility for ensuring that being challenged. The automatic and no cases were referred to the information risks are assessed and transmission of appeals does very Parliamentary Commissioner. mitigated to an acceptable level. little in assisting this There were 33 judicial complaints understanding, so the recent (33 in 2006-07 and 46 in 2005-06). introduction of regulations which No cases were brought for judicial change the way council tax review. Full details of the valuation appeals are now made complaints are held by the will hopefully alter such a Corporate Director.
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Management commentary
Delivering our Business Plan Our delivery against the targets strategy, the workshops also 2007-08 we set in the Business Plan is addressed findings from our The following pages set out what detailed below. customer and staff surveys. Staff feedback from these workshops we achieved during the year 1. Strategic Management against our business plan for has greatly contributed to the » Implement an integrated 2007‑08. In addition to these future development of the VTS. planning cycle to promote activities, we have worked with the participation at all levels in » Review internal and external our IT partners in researching and the VTS in the direction communications developing changes to our for the service. A formal review of our internal IT system for the implementation and external communication of Appeals Direct for council tax. We involved our four regional processes was deferred during the We have also co-operated with managers in the development of course of the year as we focused the Valuation Office Agency in our future strategy, building on on developing our future strategy. reviewing our communication their operational experiences which However, we have very much processes with council tax payers. provided an important perspective continued to build on processes In addition, we liaised with our and input in reflecting views and put in place last year to engage sponsoring department to opinions of their staff. Regional staff at all levels. Staff regional successfully implement Managers have been engaged with meetings have played a key part in regulations. Our focus and work the Executive Management Team influencing our future in these areas greatly contributed in developing strategy through the development plans. Engagement to the successful implementation medium of a senior management of regional staff at all levels, and introduction of the new strategy workshop held in through various projects and regulatory process which came September 2007. The various meeting groups has contributed into force on 1 April 2008. papers derived from this workshop, covering the creation of a single to a number of initiatives that we valuation tribunal, organisational have put in place for the structure, performance development, introduction and management, information implementation of national technology, and efficient and practices and standards. effective estates utilisation, greatly We continue to be involved in a informed the Board’s strategy day number of groups involving held on 17 October. external stakeholders. The Rating At this strategy day, the Board Liaison Group embraces the focused in working towards a professional bodies (Royal ‘Shaping the Future’ agenda, the Institution of Chartered Surveyors, ingredients of which were then Rating Surveyors’ Institute, discussed with all staff through Institute of Revenues, Rating and workshops. In addition to the VTS Valuation) and representatives of
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78% Service Tribunal Valuation The The overall satisfaction index in 2007 was 78%, an increase of 5% in the overall satisfaction index between 2006 and 2007 Annual Report and Accounts 2007-08 Accounts and Report Annual
the Valuation Office Agency, all The survey findings showed an perceived familiarity that develops specialists in the field of rating increase of 7% (to 69%) in those between members and the and valuation. This group meets who said the guidance leaflets Valuation Officer, due to the quarterly under terms of reference helped and provided all the frequency of them attending reviewed on an annual basis. We information required, and an tribunals. There was an also meet as a liaison group with increase of 6% (to 73%) in improvement of 16% (39% in 2007; the Valuation Office Agency numbers of those who said their 23% in 2006) in the number of on a quarterly basis on treatment up to the start of the people who felt they could ask workload matters. hearing was excellent or good. questions and explain their case as fully as they wanted. This figure We continue to have regular An area of concern for us relates however, leaves room for quarterly meetings with our to the perception of the significant improvement. sponsoring department. independence of the tribunals. 47% of those surveyed still were » Work with sponsoring Our Chairman continues to unaware that their appeal had department in developing attend a number of meetings with moved from one organisation to performance indicators across the Administrative Justice and another, or of the difference the organisation Tribunals Council, the Tribunals between the VTS and the Service and members of other We have introduced processes to Valuation Office Agency. However, tribunal jurisdictions, to keep better capture workload this is an improvement on the abreast of developments in the information underpinning each previous years’ figure of 64%. wider tribunal arena. valuation tribunal and this has The survey also showed a small assisted us in developing a » Carry out a survey to measure decrease of 3% (to 55%) in those number of key performance customer satisfaction and who felt they had received a fair indicators. We continue to share improve on 2006 survey results hearing by the tribunal. This workload information with our We carried out a customer survey perception is linked more with the sponsoring department using during the summer of 2007 that judicial process (that is, the the vehicle of our quarterly focused on a national sample treatment received during and liaison meetings. of 586 people who attended after the hearing) than the We have established a project valuation tribunals during the administrative process itself. By group to look at a range of period October 2006 to March far, the majority of complaints this performance indicators and are 2007 and were unrepresented year refer in one way or another continuing to develop key in presenting their case. 254 to the perceived advantage held performance indicators in the people (43%) were interviewed by the Valuation Officer, mainly areas of finance, staff and by telephone. The overall due to accessibility and members as well as operations. satisfaction index in 2007 was knowledge of the type of 78%, an increase of 5% in the evidence that would be overall satisfaction index between considered by a tribunal and the 2006 and 2007.
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2. Financial Resources In a budget of £1,004,000 we and development of strategic » Ensure expenditure within spent £789,000, representing a issues. The make up of the EMT agreed budget and implement saving of 21%. Much of this is as a will be enhanced at director level monthly budget control result of improvements by the addition of a HR Director mechanisms implemented regarding our and Developments Director. procurement policy in office During the year we raised the » Review regional staff structure supplies. awareness of our budget holders and establishment to ensure in monitoring procedures by » Review national contract for appropriate resources introducing budget guidance and legal services to ensure value Work has been done to holding in-house training sessions for money standardise responsibilities of staff for managers on understanding Better value for money was and we have been working with ‘accruals’ and ‘Departmental achieved through a tendering regional managers to ensure that Expenditure Limits’ (DEL). This has process to bring together all areas the regional management anagement commentary anagement led to the development of of legal activity under a single structure not only reflects monthly reporting mechanisms M provider using a ‘one stop shop’ organisational requirements but being introduced for managers. service approach on a call off basis also meets front line services in However, our controls need as opposed to annual contract. providing administrative services further improvement in the light This arrangement brings with it to tribunal members and also the of an unplanned under spend of the benefit of a single provider professional services of our £500,000 during the year. At year who is versed in all aspects of our technical staff at hearings. With end this under spend was fully organisation in advising on legal new challenges brought about by utilised to accelerate our estates matters affecting us. This has also the estates optimisation and the optimisation programme that will meant that relationships have introduction of a single valuation lead to cost savings in the future. been improved through the tribunal, we will be maintaining a » Achieve 5% efficiency savings introduction of key contacts. focus in future reviews to ensure in accordance with the optimum staffing levels. Spending Review 3. Human resources » Undertake a job evaluation Savings were achieved in terms of process » Review Head Office make-up our workforce running costs, as and the effectiveness of the Much work has been undertaken we had planned our resources to Executive Management Team by staff in preparation for employ 135 people but operated (EMT) implementing a job evaluation with 120 staff. In addition, we process. With the passing of the During the course of the year have focused efficiency savings in Local Government and Public EMT meetings have been the area of ‘general administration Involvement in Health Act 2007 informed by the involvement of costs’ (telecommunications, travel to create the Valuation Tribunal regional managers, HR Manager and subsistence, office supplies). for England it is inappropriate to and Training Manager in the input
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25% Service Tribunal Valuation The The average number of working days lost per full time equivalent employee was 6.5 days for the year representing a 25% improvement from 8.2 days in 2006-07 (7.2 days in 2005-06) Annual Report and Accounts 2007-08 Accounts and Report Annual
implement a job evaluation year representing a 25% The closure of Maidstone, process given the evolving status improvement from 8.2 days in Worcester and Wokingham of the organisation at present. 2006-07 (7.2 days in 2005-06). resulted in a total of eight staff However, the process so far has opting for redundancy rather than generated benefits for the redeployment due to the length organisation in terms of 4. Estate of journey to a new office, developing national job Following a review of the estate resulting in a total redundancy descriptions for posts within the strategy, the Board decided to payment of £137,500 in year. The service, in addition to better accelerate the closure of a number annual running costs of these understanding the additional of offices during the course of the offices for rent, rates and service national roles and tasks that staff year. This included Croydon, charges was around £90,000. take on in driving the VTS Winchester and Angel, which will Peterborough staff were all forward and which will be take place during 2008-09 redeployed. recognised in future development financial year. The staff and work and appraisals. of both Croydon and Angel (Head » Open a new Peterborough Office) will move to Whitechapel. office » Implement an absence This decision has contributed to management policy and Following the expiry of the lease, our plans for the fuller utilisation achieve an improvement the Peterborough office was of our Whitechapel space. This of 5% in working days lost replaced with the acquisition of has not only had the benefit of on previous financial year an office in its suburb freeing up some financial resource (Werrington). This new office A Sickness Absence Policy was which can be used in improving opened on 1 October 2007. implemented in July using the front line services, but has also Bradford Index process to allowed us to create more » Increase use of dedicated encourage improvements in flexibility in the deployment of tribunal accommodation by individual attendance, whilst staff by bringing a bigger nucleus at least 10% providing an equitable method of together under one roof. During the year Clerks worked dealing with alleged cases of poor towards increasing the use of » Close Wokingham, Worcester, attendance. This policy was also dedicated in-house tribunal Peterborough and Maidstone aimed at assisting managers to accommodation for hearing offices manage absence within their appeals. Whilst this objective has teams and to facilitate the return In line with our planned closures been achieved, the reduction in to work of employees who have we closed the Wokingham, our estate portfolio and been absent due to sickness. Worcester, Peterborough and accelerated approach to office Maidstone offices and successfully The average number of working closures has required us to transferred the administration to days lost per full time equivalent reconsider the use of more neighbouring offices. employee was 6.5 days for the external venues to address the travelling requirements of our
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users, members and staff. This has 5. Information Technology » Implement a process of inevitably meant that we are now » Research and work with the initiating a council tax appeal looking to provide a more local professional bodies towards a electronically footprint for the hearing of method of communicating Following the introduction of appeals which requires the notices electronically Appeals Direct for council tax, the identification of local and We met with representatives of the VTS website has been updated to appropriate venues. professional bodies (Royal incorporate electronic versions of » Maintain quarterly health and Institution of Chartered Surveyors, the council tax appeal forms. This safety meetings and keep Rating Surveyors’ Association, now permits council tax appeals under review health and safety Institute of Revenues, Rating and to be made on-line to the relevant issues in offices and maintain Valuation) in July 2007 to gain a valuation tribunal to initiate the effective monitoring systems better understanding of their full appeal process. The form and guidance meet the criteria Four training events were held requirements. As a result of established by the Plain English anagement commentary anagement during the year to further discussions, this work was divided into two separate projects. The Campaign and have received their M enhance the knowledge and skill ‘Crystal Mark’. base of the six health and safety first is to enable the software to officers who all hold the automatically generate notices in a » Research and cost the transfer Institution of Occupational Health format which will allow all users to of the stand alone HR and and Safety Managing Safely receive and be able to read training database to the qualification. In addition, four documentation we send. The VTS network second is to streamline our internal meetings were held to discuss The HR and Training database processes so that documents to be health and safety matters. (ASR) contains staff and member sent electronically are processed details and was introduced to the In readiness for the changes automatically rather than manually. VTS in 2004. It operates as a stand introduced in the Corporate The first part of this is nearing alone system with a server based Manslaughter Act 2008 on 6 April completion. The second part will in head office. The fact that it is a 2008, which allows criminal require development. In addition stand alone system is itself a risk, proceedings to be brought against to notices, we will be looking to as there are no back up servers in employers if they are found to include letters within the operation should the lone server have caused death due to gross electronic communication process. corporate health and safety fail. The benefit of introducing an failures, we commissioned an audit of all our current health and safety policies to help identify any gaps in our policies. We are also working towards the VTS website has been updated to incorporate BS10081 standard. electronic versions of the council tax appeal forms. This now permits council tax appeals to be made on-line
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45 Service Tribunal Valuation The We held a total of 45 courses during the year compared with 10 in 2006-07 Annual Report and Accounts 2007-08 Accounts and Report Annual
HR database (whether ASR or participation and interaction presidents and a Board member, another) to the central database is at events. We held a total of was formed on 6 December 2007, part of the ongoing IT strategy 45 courses during the year under terms of reference currently being developed as part compared with 10 in 2006-07. endorsed by the VTS Board, to of our focus for the new financial develop strategy relating to the » Complete the Members’ year. The cost to transfer ASR to future training of members of Handbook and make it the central database (currently valuation tribunals. Member accessible via Members’ Pages based in Worthing) and to make training and development needs of the VTS website it available to the VTS network is for 2008-09 were sought from within the region of £30,000. The Members’ Handbook was presidents and presented to this completed in July 2007 following Committee in March 2008, with various stages of consultation at the emphasis on centrally 6. Members Quarterly Presidents’ Meetings prepared and locally delivered and is available on the Members’ » Design and implement a training. The approved Pages of the VTS website, which is members’ development and programme has been published accessible to every valuation training programme centrally and clerks of tribunals tribunal member. The Handbook have been given the responsibility The members’ training and has been recently revised to for booking training events for development programme reflect the introduction of their tribunal members in comprised a range of courses, Appeals Direct and following this consultation with tribunal including an induction important addition, the President presidents. In addition, we are programme for Presidents. In of London South West piloting a mentoring process in addition to the continuation of volunteered to proof read the six consultation with the President of training modules from 2006-07, a chapters of the Handbook. In the Manchester North Valuation new module aimed at experienced addition, and at the request of Tribunal, Philip Harrison. chairmen was introduced to presidents, once proof read we further refine and develop the arranged for the chapters to be » Standardise best practice skills of chairmen in tribunal. made available in hard copy and in the way in which clerks support hearings During the year we also made these have been distributed in better use of our in-house hearing ring binders to Clerks of valuation As part of our commitment rooms for the delivery of training, tribunals for circulation to the in providing good case moving away from hotel membership. management of appeals, and to avoid unnecessary delay accommodation. This allowed us » Draft, consult and publish and expense, we issued specific to focus better on smaller training a training programme guidance to clerks when dealing groups of 20 rather than 70 for 2008‑09 at hotel venues. These smaller with postponement requests. The Training Strategy Committee, groups have been successful This guidance encourages clerks made up of a number of in achieving greater member to consider all postponement
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The core benefits of Active Case Management (ACM) are in promoting better customer service and value for money
applications on individual 7. Tribunal procedures manage listed appeals is becoming merit and undertake a » Review the internal increasingly important and ACM ‘reasonableness’ test. communications policy has been developed to encourage: Valuation tribunals expect The review of our internal » timely personal contact with postponement applications to be communication policy has been any appellants who wish to made in writing and at least three put back to 2008-09. We are attend hearings and require working days before the focusing our activity on further information (such as scheduled hearing date. Where communicating changes and leaflets, video/DVD); consideration leads the clerk to developments through the » direct guidance and advice to the view that the request is medium of regional meetings, those who do not wish to reasonable, then there will be a regional workshops with staff who attend; presumption to grant the request. support tribunals and through » actual or indicative hearing However, where such Quarterly Presidents’ Meetings times;
anagement commentary anagement consideration leads the clerk to (QPMs). » management guidance on the view that the request is M » Develop and implement an ‘meaningful tribunals’ to enable unreasonable, then there will be a audit tool for policies and clerks to maximise staff, presumption to refuse the guidance member and venue resources; request. Whatever the decision, and parties will be notified in writing, In pursuit of one of its core aims, and this will be supported with the VTS has been continually » a mechanism which encourages reasons in the event of refusals to developing practices and more coherent and timely grant the application. As part of procedures, to comply with good communication channels with our aim in upholding fairness, practice; and to create greater key stakeholders. consistency. As a further anyone remaining unhappy with This has been very successful in development, we have decided to such a refusal retains the right to managing workload and regional ask our new internal auditors to appear before the tribunal to managers are continually reviewing provide an independent view, so present an adjournment the effectiveness of ACM within that we can check our progress application. offices to assess the towards standardisation across all communication flow between the This national and robust approach our offices. has reduced the administrative valuation tribunal administration burden placed on a presiding » Review active case and the parties. We aim to ensure tribunal, allowing the members to management in offices that at least five working days focus on cases where there are The core benefits of Active Case prior to the scheduled hearing disputes as opposed to dealing Management (ACM) are in date, our administration makes with administrative processes. promoting better customer contact with the parties to service and value for money. The establish progress. This process ability of our staff to actively case endeavours to ascertain that
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parties have exchanged all relevant » List 95% of all outstanding » List 100% of civil penalty information, agreed facts and 1995 appeals appeals within four months identified the issues in dispute, so We have listed 100% of 1995 of lodgement that the dispute may proceed Rating List appeals. 148 appeals The number of appeals received effectively to the hearing stage. remain outstanding that cannot during the year was 234 and all » Increase meaningful tribunals be progressed as they relate to were listed within two months by improving the ratio of issues to be considered in appeals of lodgment contested cases to tribunal to the Lands Tribunal. hearings by 5% » List 95% of council tax liability 8. Quality of Service During the year, we have exceeded appeals within three months our target. A meaningful tribunal of lodgement » Agree and publish a standard format and content for is a hearing day that has sufficient The number of appeals received reasoned decisions business to last several hours that during the year was 883; all have engages members and staff. been listed within three months A guidance document entitled Valuation tribunals recorded 3,589 of receipt. Format and Content of Decisions appellants attending to contest was published in September 2007. cases on 1,732 tribunals, compared » List 100% of council tax This document provides for a to 2,389 attending in 2006-07 banding appeals within six standard approach to be taken with 1,967 tribunals. This shows months of lodgement regarding the format and content that on every tribunal during the The number of appeals received of reasoned decisions, especially year there were on average during the year was 34,340. This as most decisions are published 2.0 attendances compared to on target was met in 98% of cases. on the public domain pages of the average 1.2 in 2006-07. Valuation tribunals administered VTS website so that the general from the Plymouth, Winchester public may check similar decisions » List 100% of all outstanding and Doncaster offices fell slightly issued in different areas. Since 1990 appeals outside of this target. this document was issued, the We have listed all 1990 appeals, format and content of reasons apart from 41 appeals which has improved and this has cannot be progressed as they been acknowledged by the are awaiting a superior court professional bodies. determination.
on every tribunal during the year there were on average 2.0 attendances compared to on average 1.2 in 2006-07
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11% 11% of reasoned decisions were issued beyond 21 working days. This is an improvement on the figure for 2006-07 (19%) and exceeds our target for the year
» Implement an effective We continue to work with clerks 9. Equality and Diversity process of quality checking of valuation tribunals to reduce » Communicate the decisions within offices this figure even further. organisation’s commitment All reasoned decisions drafted by » Work with members to ensure to workplace equality and our technical staff now undergo a that all reasoned decisions diversity to all employees peer checking process to check sent to a presiding tribunal are and members consistency and accuracy. Peer returned within 7 working During the year, we have checking is not restricted to office days to assist in meeting the developed our first Equality and colleagues, but is extended to 21 working day issue to Diversity Scheme, which is fully anagement commentary anagement include peers from other offices. appellants compliant with the Equality and
M This process has contributed to To enable a decision to go out Human Rights Commission codes the better standard of decision within 21 working days it requires of practice and current equality writing and drawing out the the co-operation of chairmen and and anti-discrimination legislation. salient issues resulting from the members. An objective was set for This document contains evidence presented and clerks of valuation tribunals to important information about the considered by the tribunal. This work with the tribunal work we will be doing to promote process also assists clerks in membership in agreeing and equality of access to services and managing any review of decision implementing a timeline that opportunities and how we plan to writing standards. meets the requirement of eliminate discrimination. The » Increase number of reasoned members yet still achieves the Scheme also explains what we will decisions issued within timely issue of decisions to do to ensure that our values on 21 working days by 5% appellants within the 21 working equality and diversity remain fundamental to everything we do. This 21 working day target relates day expectation. Guidance was The VTS’ Equality and Diversity to reasoned decisions following a given to clerks to introduce an aim policy was published to all staff in hearing, of which there were 4,594 of seven working days for members July and a mandatory training day during the year under review. to review draft decisions. was held across all regions to raise 11% of reasoned decisions were 4,080 decisions (89%) were issued organisational awareness in this issued beyond 21 working days. during the year within the area. We have also built diversity This is an improvement on the 21 working day target date. into the various training modules figure for 2006-07 (19%) and for members’ training and exceeds our target for the year. members’ training programme.
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» Develop and maintain an » Develop ongoing Funding organisation-wide assessment communications systems to We received sufficient funds as and evaluation system to create and reinforce a high grant in aid to meet our overall monitor progress throughout level of employee awareness of expenditures. The Cash Flow the organisation towards the importance of diversity Statement, as set out on page 53 attainment/retention of a We have published our policy on which analyses net cash flow from diverse workforce and a work the intranet and have held a operating activities, identifies cash environment mandatory training day for all spent by the VTS on capital We are required by the Cabinet staff to raise awareness of diversity expenditure and shows grant in Office to report on such and the importance of this in aid that the VTS drew down from information and have developed the workplace. its sponsoring department in our HR processes to capture this order to finance its activities. » Implement an equal information for prompt reporting. opportunity system for We already have systems in place tribunal users for staff and request new Asset management In addition to the English members appointed to valuation The main aim of the VTS asset language, we continue to provide, tribunals to provide such management is to ensure that on request, our family of leaflets information for monitoring appropriate fixed assets are held in the eight most commonly used purposes. This approach has to meet the VTS objectives. increased the amount of languages (Arabic, Bengali, information we now hold Chinese, Gujarati, Polish, Punjabi, Urdu and Vietnamese). We will Outturn against estimates » Meet the sponsoring also provide them in Braille, large 2007‑08 department’s monitoring print and in audio to ensure that processes, goals and the appeal process is understood Net expenditure per the Income timetables to ensure our and accessible to all. During and Expenditure Account for the workforce, at all levels, and the year, we accommodated year on page 50 shows £9,857,000 reflects the diversity of the 19 requests for translations of on ordinary activities (2006-07 – communities from which our seven of our leaflets into six £9,809,000). Adjusted for workforce is drawn different languages. In addition we pensions, the net expenditure We monitor the makeup of the had 11 requests for large format increases to £10,129,000, lay membership and staff and we versions of the guidance leaflets, (2006‑07 – £10,116,000). ensure that our status and seven of these in other languages, recognition as an equal and two requests for audio opportunities employer is versions. We have also provided reflected in any recruitment an interpreter in Bangla. literature.
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Financial Summary EMT, with engagement also by the Fixed Assets Expenditure for the financial year SMT, reviewed the three-year The total net book value of the to 31 March 2008 was £10,129,000. business (or Forward) Plan and fixed assets as at 31 March 2008 conducted close monitoring of all was £987,000. The movements in The VTS expenditures were financial activities. fixed assets for the year are set contained within funding limits for out in notes 6 and 7 to the both revenue and capital through Total net operational revenue financial statements. There were the year. Revenue expenditure expenditure was £9,857,000 in no costs incurred on Research includes certain dilapidation 2007-08. This was held below the and Development during the provisions as required by FRS 12. budget of £9,968,000 but 12 months ended 31 March 2008. The VTS continues to pay out of exceeded the grant in aid (revised) The additions to fixed assets funding the cost of local limit of £9,243,000. comprised £155,630 on acquiring government pension schemes’ The operating deficit on the new leasehold premises in benefits accruing over the financial Income and Expenditure Account Werrington in October 2007 anagement commentary anagement year, in addition to the separate is not fully covered by grant in aid having closed the Peterborough
M pension costs charged under FRS (GIA) from the Department. This office the previous month. 17 for pension liabilities. was mainly as a result of timing In August 2007, the VTS closed its Total grant in aid claimed and differences in the accounting for office in Worcester and in received from the sponsor and payment of reorganisation February 2008 the offices at department was £9,743,000. costs. The VTS made provisions for staff redundancies and Maidstone and Wokingham The Department Expenditure dilapidations of £631,045 in total, closed on expiry of the leases. Limit (DEL) budget for the year relating to the closure of offices in Commitments at the balance was £10,378,000, made up of Croydon, Durham, Harrow, sheet date for lease agreements in £9,968,000 resource and £410,000 Winchester and in Head Office for force and due to be paid are capital. This budget took account period June 2008 to March 2009. shown on page 69. On page 70, of a pre-agreed funding GIA received reflects only the Note 21 refers to there being no withdrawal for 2007-08 of VTS’ requirement for cash in any capital commitments entered into £352,000 from the resource given year. The Department has at the balance sheet date. budget and £90,000 from the indicated that the GIA required to capital budget. match the expenditure provided Day to day responsibility for for will be drawn down from the financial management of the VTS’ Department during 2008-09 and activities is managed by the EMT. 2009-10, as the cash to pay these During the course of the year, the obligations is required.
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Pension Liabilities Events since the end of the The GIA for 2007-08 takes into For the purposes of Financial financial year account the amounts required to Reporting Standard (FRS 17), There are no events that have meet the VTS’ liabilities falling due pension scheme liabilities of happened since the end of the in that year. This has already been £9,170,000 have been recognised financial year to materially affect included in the Department’s in the balance sheet. An actuarial the contents of these financial estimates for that year. Provision gain of £4,296,000 is shown in the statements. for future years is provided for Statement of Recognised Gains within HM Treasury’s and Losses, taking account of Comprehensive Spending Review, pension fund movements to Going Concern which has set funding for the VTS for the next three years. It has 31 March 2008. These pension The Board confirms that, after accordingly been considered entries in the Accounts represent making appropriate enquiries with appropriate to adopt the going non‑cash items. the sponsoring department, it has concern basis in preparing these a reasonable expectation that the financial statements. VTS has adequate resources to Financial Risk continue its operations for the The VTS adheres to a policy foreseeable future. The balance Auditors of managing and monitoring sheet shows net liabilities of significant risks, including financial £8,767,000. This reflects the The Accounts of the VTS are risks, as an integral part of the inclusion of liabilities falling due in audited by the Comptroller and management of the VTS. future years which, to the extent Auditor General under the Local At 31 March 2008 there were no that they are not to be met from Government Act 2003. An material financial liabilities other the VTS’ other sources of income, internal audit service was than those shown in these may only be met by future grants provided by Deloitte & Touche accounts. The accounting for or GIA from the sponsoring Public Sector Internal Audit FRS 17 – pension liabilities, is department. This is because, separately under the terms of a dependent on the annual under the normal conventions service level agreement which valuations of 30 pension funds applying to parliamentary control expired on 31 March 2008. administered outside the control over income and expenditure, The Board has approved the of the VTS for which valuations such grants may not be issued in engagement of AHL Limited are returned for the schemes by advance of need. as the VTS’ internal auditors actuarial reports at the year end. for 2008-09.
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Remuneration report
Board members’ emoluments Executive Management Team Chairman’s, Chief Executive’s and expenses The salary of the Chief Executive and Directors’ Terms of Office The remuneration of the is reviewed annually and is The Chairman is appointed on a Chairman is determined by increased on guidance provided three-year term; the second three- Ministers and at 31 March 2008 from the Department. The post of year term was confirmed by the was £55,451 per annum. The other Chief Executive was filled in July Secretary of State and expires on six Board members, also 2007 as the previous incumbent 31 March 2009. appointed by the Secretary of had given notice not to continue The Chief Executive, appointed on State, are eligible to receive an beyond March 2007. There was 1 July 2007, and the Directors are annual fee, which is non- therefore no inflation salary appointed on a permanent pensionable, and which is based increase to the new appointee contract basis. on the number of days in although a performance related attendance at Board and other element does apply to that post. Board approved meetings. All Directors, who with the Chief member posts are non-executive Executive comprise the Executive and all members’ emoluments are Management Team, receive non-pensionable. Board members annual pay increases in line with can be appointed for a term up to all other VTS staff. For the year three years. When their first term commencing 1 April 2007 the pay of office comes to an end, a award was 2.475%. second term of appointment may be granted by the Secretary of State. At 31 March 2008, three Proportion of remuneration members ended their term of subject to performance office, two service members and The Remuneration Committee an independent member. One considers annually the service member was re-appointed performance of the Chief for a second three year term as Executive against the objectives Deputy Chairman; the other two set for the year. members were replaced through a Department selection process by Each Director is appraised by the one service member and an Chief Executive with additional independent member. Board comments from the Chairman. members receive an annual The incentive scheme for the appraisal from the Chairman, who Chief Executive and Directors is is also appraised annually by the restricted to a maximum of 10% sponsoring department. of gross salary. Board members can be appointed for a term up to three years 36 < CONTENTS Ref: Qd12753 File: Qd12753b-alt p49 (p37) Date: 22.7.08 The Valuation Tribunal Service Tribunal Valuation The Annual Report and Accounts 2007-08 Accounts and Report Annual
Audited Information The salary and pension entitlements of the Chairman and Chief Executive were as follows: Year ended Year ended 31 March 2008 31 March 2007 £’000 £’000 The emoluments of the Chairman, Anne Galbraith: – Basic salary 55 55 Total emoluments 55 55 The emoluments shown for of the Chief Executive, Dr Christina Townsend, is for the period 1 July 2007 to 31 March 2008: – Basic salary 61 79 – London weighting 2 3 – Performance related pay 0 8 – Employer pension contribution 11 12 Total emoluments 74 102 – Pension increase (net of inflation) 1 1 – Total accrued pension at 31 March 2008 1 3
Fees and emoluments for non-executive members of the VTS Board: Year ended Year ended 31 March 2008 31 March 2007 Name £’000 £’000 Anne Galbraith 55 55 Paul Wood 7 6 Ronald Barham 6 5 Ted Gunby 6 5 Peter Lawton 6 5 Irene Robinson 6 5 Michael Tildesley 6 5 Total 92 86
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The emoluments of the Directors were as follows: Year ended Year ended 31 March 2008 31 March 2007 £’000 £’000 The emoluments of the Resource Director, Alan Begg for the period 1 April 2007 to 31 March 2008: – Basic salary 61 47 – London weighting 3 3 – Performance related pay 61 61 – Employer pension contribution 12 8 Total emoluments 82 64 – Pension increase (net of inflation) 2 1 emuneration report emuneration – Total accrued pension at 31 March 2008 9 7 R The emoluments of the Corporate Director, Antonio Masella for the period 1 April 2007 to 31 March 2008: – Basic salary 61 56 – London weighting 3 3 – Performance related pay 61 61 – Employer pension contribution 12 9 Total emoluments 82 74 – Pension increase (net of inflation) 4 1 – Total accrued pension at 31 March 2008 22 18
1 Performance pay refers to the accrual at the end of each financial year. The salary, pension entitlements and the value of any taxable benefits in kind of the Executive Management Team of the VTS during 2007-08 are as shown. Salary, Real increase including in CETV after London adjustment weighting Benefits Total accrued for inflation and in kind pension at and changes performance (rounded to Real increase age 60 in market pay (£k) nearest £k) in pension at 31.3.08 CETV CETV investment (2006-07 (2006-07 and related and related at 31.3.07 at 31.3.08 factors in brackets) in brackets) lump sum (£k) lump sum (£k) (nearest £k) (nearest £k) (nearest £k)
Name i ii iii iv v vi vii 60-65 Christina Townsend1 (N/A) 0 1-4 1-4 0 18 7 65-70 Alan Begg (55-60) 0 2-6 9-26 87 119 23 65-70 Antonio Masella (65-70) 0 4-11 22-65 212 273 41
1 Dr Townsend became Chief Executive on 1 July 2007 and since she did not transfer in any previously accrued pensionable service at that time, start period calculations have been excluded. Service/benefits purchased from additional voluntary contributions have however been included, as they fall within the Regulations for such payments.
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Columns (v) and (vi) of the table show the member’s cash equivalent transfer value (CETV) accrued at the beginning and the end of the reporting period. Column (vii) reflects the real increase in CETV using the rate of inflation based on the RPI as 3.77%. The net increase in CETV ignores the effects of the change in market conditions, members’ age and employee contributions paid over the year. The CETV calculations ignore the effect of GMP (Guaranteed Minimum Pensions) and as such the GMP stopped accruing after April 2007. GMP has therefore been ignored in the calculations at the start and end of the year. A CETV is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the staff member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the staff member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies. The CETV figures, and from 2006-07 the other pension details, include the value of any pension benefit in another scheme or arrangement that the individual has transferred to the LGPS arrangements, where relevant. The transfer value basis is the Club Transfer Value basis adopted by the Local Government Pension Scheme. CETVs are calculated within the guidelines and framework of the London Pensions Fund Authority’s CETV calculations. The number of staff, including the Chief Executive, whose annual rate of remuneration as at 31 March 2008 exceeded £40,000 excluding pension contributions and performance related pay but including any benefits in kind and London Weighting was: Year ended Year ended 31 March 2008 31 March 2007 Remuneration Band Number Number £40,000 to £44,999 4 6 £45,000 to £49,999 11 10 £50,000 to £54,999 1 0 £55,000 to £59,999 0 2 £60,000 to £64,999 3 0 £65,000 to £69,999 0 0 £70,000 to £74,999 0 0 £75,000 to £79,999 0 0 £80,000 to £84,999 0 1
Dr Christina Townsend Accounting Officer and Chief Executive, VTS 14 July 2008
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Foreword to the financial statements
The financial statements have Financial Reporting Standard been prepared in line with a FRS 17 ‘Retirement Benefits’ direction issued by HM Treasury Under HM Treasury guidance, the in accordance with the Local VTS has implemented Financial Government Act 2003. Reporting Standard 17 (FRS 17). The VTS prepares its Accounts in accordance with the Financial Statutory basis Reporting Manual (FReM) as it The VTS is a non-departmental applies to NDPBs. This assumes a public body (NDPB) and its net discount rate of 2.1% p.a. and constitution is set out in section an inflation rate of 3.8% p.a. 105 and Schedule 4 to the Under FRS 17, the additional costs 2003 Act. associated with paying benefits early, or granting additional service, where staff members VTS aim retire on unreduced pension on To secure the efficient and redundancy or efficiency grounds independent operation of the have been recognised in full in the valuation tribunals in England and Income and Expenditure to improve customer service Statement in the year the through the spread of best practice. requirement is granted. The Secretary of State has defined the overall aim for the VTS as follows: To provide staff, accommodation and other support (including general advice about procedure in relation to proceedings before tribunals) to valuation tribunals in England.
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Statement of the Board’s and Chief Executive’s Service Tribunal Valuation The responsibilities Annual Report and Accounts 2007-08 Accounts and Report Annual
Under the Local Government Act The annual Accounts are prepared In addition the Chief Executive 2003, the Board and the Chief on an accruals basis and must should: Executive of the Valuation show a true and fair view of the » confirm that all reasonable Tribunal Service for England are VTS’ state of affairs at the year steps have been taken to make required to prepare a statement end, and of its income and the auditors aware of any of Accounts for each financial expenditure and cash flows for relevant audit information. year, in the form and on the basis the financial year. determined by the Secretary In preparing these Accounts, the of State, with the consent of Chief Executive is required to: HM Treasury. » observe the Accounts Direction Dr Christina Townsend The Accounting Officer for the issued by the Secretary of State, Accounting Officer and sponsoring department including the relevant Chief Executive, VTS designated Dr Christina Townsend accounting and disclosure 14 July 2008 as the VTS’ Accounting Officer for requirements, and apply the accounting period 1 July 2007 suitable accounting policies on to 31 March 2008. For the three a consistent basis; month period to June 2007, » make judgements and estimates Alan Begg had been appointed on a reasonable basis; Accounting Officer. » state whether or not applicable At March 2008 Dr Townsend accounting standards have been had responsibility for the followed and disclose and propriety and regularity of the explain any material departures public finances and for the in the financial statements; and keeping of proper records, as set » prepare annual Accounts on a out in the Non-Departmental going concern basis unless it is Public Bodies’ Accounting inappropriate to presume that Officers’ Memorandum, issued the VTS will continue in by HM Treasury and published operation. in ‘Managing Public Money’ by the Stationery Office.
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Statement on internal control
Scope of responsibility The purpose of the system of Capacity to handle risk I am appointed by the sponsoring internal control Whilst every member of staff department (Communities and The system of internal control is within the VTS has a responsibility Local Government) as Accounting designed to manage risk to a to ensure that the VTS’ exposure Officer for the VTS. As reasonable level rather than to risk is managed, overall Accounting Officer1 I have eliminate all risk of failure to leadership of the VTS risk responsibility for maintaining a achieve policies, aims and management process rests with sound system of internal control objectives. It can only provide, senior management. They are that supports the achievement of therefore, reasonable and not responsible for promoting and the VTS’ policies, aims and absolute assurance of embedding a risk management objectives, whilst safeguarding the effectiveness. The system of culture within the VTS, which public funds and departmental internal control is based on an includes setting the risk assets for which I am personally ongoing process designed to management framework within responsible, in accordance with identify and prioritise the risks which the VTS operates. the responsibilities assigned to me to the achievement of the VTS’ The Corporate Director has in Managing Public Money. policies, aims and objectives, to leadership responsibility for evaluate the likelihood of those I have no role in the make up of ensuring that appropriate risks being realised and the impact the membership of valuation mechanisms are in place to should they be realised, and to tribunals and the judicial identify, monitor and control manage them efficiently, processes associated with them, risk and for advising senior effectively and economically. or the decisions of the individual management on the actions The system of internal control tribunal, nor any role in the needed in order to comply has been in place in the VTS for management, appraisal or with our corporate governance the financial year 2007-08 and discipline of tribunal members. requirements. The Board regularly up to the date of signing of the Responsibility for the tribunals monitors the organisation’s risk Annual Report and Accounts and appointment of members management performance and and accords with HM Treasury currently lies with the 56 delegates to the Audit Committee guidance. presidents. The presidents and the members are all volunteers.
1 For the period up until 1st July 2007, the Resource Director, Alan Begg, had responsibility as Accounting Officer.
The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of the VTS’ policies, aims and objectives and to manage them efficiently, effectively and economically 42 < CONTENTS Ref: Qd12753 File: Qd12753b-alt p49 (p43) Date: 22.7.08 The Valuation Tribunal Service Tribunal Valuation The Annual Report and Accounts 2007-08 Accounts and Report Annual
the responsibility for ensuring to the organisation. This change organisation. This year we have that the risk management will be introduced in 2008-09 added a third key area relating to responsibilities are discharged along with the other agreed change. The key areas are now: efficiently, effectively and recommendations contained in » the risk to the VTS’ reputation, economically. During the course the report. » financial risks of the year the Board reviewed the major corporate risks and » risks resulting from our the level of assurance provided The risk and control change agenda against each one and made an framework Given the VTS’ responsibilities, assessment concerning the The existing risk management the loss of reputation is likely to acceptability of the residual risk framework is composed of a be the most damaging outcome, that had been identified. hierarchy of registers, including with the potential to do the The Audit Committee meets at the corporate risk register, risk greatest harm to the regular intervals and is made up registers for each of the four VTS organisation’s capacity to of four Board members and an regions, each office and each of effectively carry out its legislative independent member. The the Head Office departments. functions. There is also a separate Health Committee has the review of risk In the 2008-09 financial year, and Safety risk register. Currently management as a standing item it is planned to improve the risks are identified through a on its agenda. Between year end effectiveness and risk monitoring ‘bottom up’ approach with risk and the signing of the accounts, of change through significant management being a standing our internal auditors, AHL, staff training on project and item at team meetings. Risks (appointed from April 2008) programme management. identified in the office risk assessed the existing risk Six managers will receive training registers are reviewed by the management framework against and accreditation on PRINCE2 relevant Regional Manager with established best practice using the techniques and a further 21 will high level risks being added to the HM Treasury Orange Book (2004). receive either one or two days regional risk register. The regional Their report concluded that the training on the principles and and departmental risk registers current risks management practice of project management are reviewed quarterly by the framework is broadly compliant focusing on PRINCE2 processes. Corporate Director, who includes with established good practice In addition, a senior member risks with an impact on the and ‘reasonable assurance’ was of staff at Director level has whole organisation. given. Their report states that been appointed to lead our there is a strong case for changing The VTS has a risk management development work and will the reporting mechanism to the policy and strategy which include undertake MSP (strategic Board to ensure that the Board is a methodology for measuring programme management) training only considering the strategic risks the relative levels of risk to the and accreditation.
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21 Six managers will receive training and accreditation on PRINCE2 techniques and a further 21 will receive either one or two days training on the principles and practice of project management focusing on PRINCE2 processes. control
An ongoing dialogue takes place understand better and to respond Review of effectiveness with the 56 presidents of the to their needs, concerns and As Accounting Officer I have tribunals. In particular there are motivation. responsibility for reviewing the quarterly consultative meetings As part time volunteers sitting on effectiveness of the system of where issues such as standardising an occasional basis, the tribunal internal control. My review is the different aspects of the members rely on guidance from informed by the work of the running of a tribunal and appraisal my professional staff when coming senior managers within the VTS of members are discussed. It is for to a decision about an individual who have responsibility for the each president to decide whether case. I plan for 2008-09 to review development and maintenance of to accept any guidelines that the effectiveness of initial and the internal control framework, by emerge. I plan to enhance our continuing development of my the advice and guidance I receive communications with presidents professional staff and to make from the Audit Committee, the Statement on internal on Statement and members in the 2008-09 recommendations to the Board and sponsor team within financial year. In particular, I have VTS Board. CLG, by surveys of tribunal users appointed an additional member and by both internal and external of senior staff at director level In addition to the actions already auditors in their management who will have communication discussed, the following have letter and other reports. with tribunal members as one of continued: The Statement of Assurance from their main responsibilities. » the business planning process our Internal Auditors for 2007-08 ensures that new risks, or As volunteers the tribunal (Deloitte and Touche) states: members carry out their duties changes to existing risks, are because they have a strong identified at each stage of the “Based on the work completed commitment to serve their local process, from horizon scanning between 1 April 2007 and community. It is a very cost through to the agreement of 31 March 2008, carried out in effective means of providing the detailed business plans; accordance with the scopes service and it is important that » the reporting of performance agreed by the Audit Committee, the ‘goodwill’ I have available to against key operational taking into account the proposed me is maintained and built upon. indicators; and action by management to rectify the control weaknesses identified I plan to carry out a survey of » periodic reports from the Chair in our detailed reports, in our tribunal members in the next of the Audit Committee to the opinion the VTS has an adequate financial year in order to Board and the Accounting and effective system of internal Officer.
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controls which provide reasonable of secure office premises. The Significant internal assurance regarding the effective VTS has recently received control issues and efficient achievement of the re‑accreditation from Computer Although detailed financial VTS’ objectives”. Electronic Security Group (CESG) information is produced on a of its GSX email security system. monthly basis, there have been The VTS now has a Senior issues with regards to the Information handling Information Risk Owner (SIRO), accuracy of the information on A recent review of information whose role is to ‘own’ the VTS’ actual and forecast spend, and handling procedures in the VTS, information risk policy and future commitments. This in compliance with directives assessment and by so doing reflected concern about how far received from the Cabinet Office, ensure that it is embedded into budget holders understood and has assessed that, generally we the culture and work of the VTS. engaged with this process, and operate suitable and appropriate whether they were reporting procedures for protecting and An internal review has been complete and accurate forecast sharing data. undertaken during 2008 to ensure information to Finance. The that our procedures, particularly process was further weakened by The principal threats to the concerning personal data, will be the lack of opportunity for senior integrity of the VTS’ data have fully effective. Our action plan will management review of the figures been assessed as being from data concentrate over coming months before Board review. Our new copied from the network on to on ‘protection’ of personal data, internal auditors carried out a removable media and publication of an information review of our budget monitoring inappropriate transmissions via charter, a document retention processes. An action plan and email. Accordingly, restrictions policy, and various compliance timetable is being drawn up and have been imposed on the procedures to adhere to the Board members as well as senior copying of data: for example all Cabinet Office’s guidelines. All management will be monitoring data exported on to memory this will require a certain amount progress. disks must be encrypted and of training for staff and initial the export of data on to CDs, steps will be taken in this area by The VTS uses the SAP financial DVDs and floppy discs has been the second quarter of 2008-09. accounting system under a service stopped until further software level agreement with CLG. enhancements are available later Although this is an effective this year to enforce encryption on system for managing transactions these media. A ban has also been and maintaining accounting imposed on any non encrypted information, it still does not laptops or drives containing provide the functionality or personal data being taken outside
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flexibility to allow the VTS an monitor activity of suppliers. The effective reporting capability. VTS needs to be able to act as an We are holding discussions with intelligent customer and to ensure CLG with regards to adding it has sufficient knowledge and control
functionality to the system. leverage to effectively challenge We are also commissioning a contractors over their service. review to identify whether This means the VTS needs to hold increased benefits can be copies of key contracts and reasonably attained from SAP or documentation, have clear whether a replacement system feedback mechanisms to would be more appropriate. contractors and regular access to the main contracts managers in The VTS has service level departments. Discussions are agreements with the Valuation taking place with my sponsoring Office Agency for IT maintenance department with regard to how and with CLG for the SAP to bring about the changes. accounting system, and both are renewed annually on 31 March. I am satisfied that no other Statement on internal on Statement The VTS also makes use of significant internal control issues government wide framework materialised in 2007-08. agreements for the provision of payroll services and IT support services, including the provision of Signed by business continuity and disaster recovery, logical and physical IT security and mainframe management. Currently, therefore, Dr Christina Townsend the VTS has little flexibility in managing its IT environment and Accounting Officer and lacks some key information to Chief Executive, VTS 14 July 2008
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Report by the Service Tribunal Valuation The internal auditors Annual Report and Accounts 2007-08 Accounts and Report Annual
We have now completed our » all internal audits undertaken » to ascertain that accounting Internal Audit Programme between 1 April 2007 and and other information is reliable covering the financial period, 31 March 2008; as a basis for producing 1 April 2007 to 31 March 2008, as » the action taken in response to accounts, and financial, approved by the Audit Committee. our audit recommendations; statistical and other returns; The purpose of this report is to » whether fundamental or » to ascertain the integrity and present the results of the Internal significant recommendations reliability of financial and other Audit work carried out by Deloitte have been accepted by information provided to & Touche during 2007-08. management, and the management, including that As defined in the GIAS, the role of consequent risks; used in decision making; and internal audit is to provide an » the effects of any material » to ascertain that systems of independent and objective changes in the VTS’ objectives control are laid down and opinion to the Accounting Officer or systems; and operate to promote the most on risk management, control and economic, efficient and » whether or not any limitations governance. The opinion given by effective use of resources. have been placed on the scope internal audit is a key element of of internal audit. We have provided a statement of the framework of assurance which the level of assurance achieved for the Accounting Officer needs to each system audited. Full or inform the completion of the Sources of Assurance substantial assurance was annual Statement of Internal achieved for 100% of all of the Control (SIC). The opinion can To provide the required assurance systems audited. only be reasonable in the sense we undertook an agreed that no opinion or assurance can programme of work with the Based on the work completed ever be absolute and is by following objectives: between 1 April 2007 and definition an extrapolation of the » to appraise the soundness, 31 March 2008, carried out in evidence available. The Internal adequacy and application of the accordance with the scopes agreed Audit opinion does not supersede whole internal control system; by the Audit Committee, taking the Accounting Officer’s personal » to ascertain the extent to which into account the proposed action responsibility for risk, control and the system of internal control by management to rectify the governance. ensures compliance with control weaknesses identified in established policies and our detailed reports, in our procedures; opinion the VTS has an adequate The Statement of Assurance and effective system of internal » to ascertain the extent to which controls which provides reasonable We are required to give an opinion the assets and interests entrusted assurance regarding the effective on risk management, control and to or funded by the VTS are and efficient achievement of the governance. In assessing the level properly controlled and safe- VTS’ objectives. of assurance to be given, we have guarded from losses arising from taken into account: fraud, irregularity or corruption;
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Certificate and Report of the Comptroller and Auditor General to the Houses of Parliament
I certify that I have audited the My responsibility is to audit the HM Treasury regarding financial statements of the financial statements and the part remuneration and other Valuation Tribunal Service for the of the Remuneration Report to be transactions is not disclosed. year ended 31 March 2008 under audited in accordance with I review whether the Statement the Local Government Act 2003. relevant legal and regulatory on Internal Control reflects the These comprise the Income and requirements, and with Valuation Tribunal Service’s Expenditure Account, the Balance International Standards on compliance with HM Treasury’s Sheet, the Cash Flow Statement Auditing (UK and Ireland). guidance, and I report if it does and Statement of Recognised I report to you my opinion as to not. I am not required to consider Gains and Losses and the related whether the financial statements whether this statement covers all notes. These financial statements give a true and fair view and risks and controls, or form an have been prepared under the whether the financial statements opinion on the effectiveness of accounting policies set out within and the part of the Remuneration the Valuation Tribunal Service’s them. I have also audited the Report to be audited have been corporate governance procedures information in the Remuneration properly prepared in accordance or its risk and control procedures. Report that is described in that with the Local Government report as having been audited. I read the other information Act 2003 and directions made contained in the Annual Report thereunder by the Secretary of on pages 2 to 42 and consider State. I report to you whether, Respective responsibilities of whether it is consistent with the in my opinion, the information the Valuation Tribunal audited financial statements. included in the Annual Report Service, Accounting Officer/ I consider the implications for on pages 2 to 42 is consistent with Chief Executive and Auditor my report if I become aware of the financial statements. I also any apparent misstatements or The Valuation Tribunal Service report whether in all material material inconsistencies with and Chief Executive as Accounting respects the expenditure and the financial statements. Officer are responsible for income have been applied to the My responsibilities do not extend preparing the Annual Report, the purposes intended by Parliament to any other information. Remuneration Report and the and the financial transactions financial statements in accordance conform to the authorities which with the Local Government Act govern them. 2003 and directions made Basis of audit opinions thereunder by the Secretary of In addition, I report to you if the I conducted my audit in State and for ensuring the Valuation Tribunal Service has not accordance with International regularity of financial transactions. kept proper accounting records, Standards on Auditing (UK and These responsibilities are set out if I have not received all the Ireland) issued by the Auditing in the Statement of the Board’s information and explanations Practices Board. My audit includes and Chief Executive’s I require for my audit, or if examination, on a test basis, of Responsibilities. information specified by
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evidence relevant to the amounts, of the presentation of information Opinion on Regularity disclosures and regularity of in the financial statements and » In my opinion, in all material financial transactions included in the part of the Remuneration respects the expenditure and the financial statements and the Report to be audited. income have been applied to part of the Remuneration Report the purposes intended by to be audited. It also includes an Parliament and the financial assessment of the significant Opinions transactions conform to the estimates and judgments made by In my opinion: authorities which govern them. the Valuation Tribunal Service and » the financial statements give a Accounting Officer in the true and fair view, in accordance preparation of the financial Report with the Local Government Act statements, and of whether the 2003 and directions made I have no observations to make on accounting policies are most thereunder by the Secretary these financial statements. appropriate to the Valuation of State, of the state of the Tribunal Service’s circumstances, Valuation Tribunal Service’s consistently applied and affairs as at 31 March 2008 T J Burr adequately disclosed. and of its surplus for the year Comptroller and Auditor General I planned and performed my audit then ended; National Audit Office so as to obtain all the information » the financial statements and 151 Buckingham Palace Road and explanations which I the part of the Remuneration London SW1W 9SS considered necessary in order to Report to be audited have 15 July 2008 provide me with sufficient been properly prepared in evidence to give reasonable accordance with the Local assurance that the financial Government Act 2003 and statements and the part of the directions made thereunder by Remuneration Report to be the Secretary of State; and audited are free from material » information included in the misstatement, whether caused by Annual Report on pages 2 to 42 fraud or error, and that in all is consistent with the financial material respects the expenditure statements. and income have been applied to the purposes intended by Parliament and the financial transactions conform to the The maintenance and integrity of the VTS’ website is authorities which govern them. In forming my opinion I also the responsibility of the Accounting Officer; the evaluated the overall adequacy work carried out by the auditors does not involve consideration of these matters and accordingly the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website < 49 CONTENTS Ref: Qd12753 File: Qd12753b-alt p49 (p50) Date: 22.7.08
Income and expenditure account for the year to 31 March 2008
Year ended Year ended 31 March 2008 31 March 2007 Note £’000 £’000 Income Operating Income 2 0 4 Total income 0 4 Expenditure Administration costs – Staff costs 3 4,949 4,577 – Other costs 4/5 4,950 5,220 Total expenditure (9,899) (9,797) Net expenditure (9,899) (9,793) Interest received 0 0 Interest paid/charges 0 0 Cost of capital 8 378 368 Finance charges for pensions 12a (230) (323) Net expenditure on ordinary activities (9,751) (9,748) Reversal of notional cost of capital 8 (378) (368) Net expenditure for year 13 (10,129) (10,116) Represented by: Net expenditure attributable to ordinary activities (9,857) (9,809) Net expenditure attributable to pensions 16 (272) (307)
The notes on pages 54 to 71 form part of these Accounts All activities were continuing in the year
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Statement of recognised gains and losses Service Tribunal Valuation The as at 31 March 2008 Annual Report and Accounts 2007-08 Accounts and Report Annual
Year ended Year ended 31 March 2008 31 March 2007 Note £’000 £’000 Increase/(decrease) in irrecoverable pension surplus from membership fall and other factors 12a 4,296 (4,514) Recognised gains/(losses) for the year 4,296 (4,514)
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Balance sheet as at 31 March 2008
12 months to 12 months to 31 March 2008 31 March 2007 Note £’000 £’000 Fixed assets – Intangible assets 6 0 4 – Tangible assets 7 987 1,019 987 1,023 Current assets – Debtors 9 637 492 – Cash at bank and in hand 19 153 29 790 521 Creditors – Amounts falling due within one year 10 (642) (632) Net current assets/(liabilities) 148 (111) Total assets less current liabilities 1,135 912 Provisions for liabilities and charges 11 (732) (395) Net assets employed excluding pension liabilities 403 517 Provisions for pension liabilities 12 (9,170) (13,194) Total net liabilities (8,767) (12,677) Represented by Capital and reserves – General reserve 13 (1,395) (781) – Capital reserve 14 1,798 1,298 – Revaluation reserve 15 0 0 – Pension fund reserve 16 (9,170) (13,194) (8,767) (12,677)
The notes on pages 54 to 71 form part of these Accounts
Dr Christina Townsend Chief Executive, VTS 14 July 2008
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Cash flow statement for the year to 31 March 2008 Service Tribunal Valuation The Annual Report and Accounts 2007-08 Accounts and Report Annual
Year ended Year ended 31 March 2008 31 March 2007 Note £’000 £’000 Net cash (outflow)/inflow from operating activities 18 (197) 11 Return on investments and finance charges (230) 0 Capital expenditure Purchase of fixed assets 7 (221) (342) Net cash outflow from capital expenditure (221) (342) Financing Increase in capital reserve 14 500 380 FRS 17 adjustment 16 272 (20) Total financing 772 360 Net cash inflow 19 124 29
The notes on pages 54 to 71 form part of these Accounts
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Notes to the accounts
1 Statement of accounting policies 1.1 The financial statements have been prepared in accordance with the 2007-08 Financial Reporting Manual issued by HM Treasury. The accounting policies follow applicable Accounting Standards in the United Kingdom and meet the accounting and disclosure requirements of the Companies Act 1985 to the extent these are appropriate. The financial statements are prepared on a historical cost basis. 1.2 Fixed assets and depreciation i Capitalisation threshold Assets are capitalised where they have an expected useful life of more than one year and where the original cost of the item exceeds £1,000 including VAT. Individual items valued at less than this threshold are capitalised if they constitute integral parts of a composite asset that is in total valued at more than the capitalisation value. ii Land and buildings The VTS does not hold any financial interest in land or buildings; it occupies various premises rented or leased from a number of landlords. iii Revaluation The VTS does not consider that revaluation of assets is appropriate to its assets as represented by the carrying value of all assets. iv Depreciation The straight line method of depreciation is used; that is depreciation is provided at rates calculated to write off the valuation of fixed assets less the estimated residual value by equal annual instalments over their estimated useful lives. The VTS reviews the asset lives annually. The asset lives currently applied to the VTS’ main category of assets are as follows: » computers three years; » in-house developed software five years; » furniture and office equipment five years; and » leasehold improvements over life of lease. Depreciation is charged in the month of acquisition except where this may fall at the month end in which case the charge falls in the following month, but depreciation is charged in the month of asset disposal. v Intangible assets and amortisation Software licences are capitalised as Intangible Assets and shown in Note 6. These licences are amortised by equal annual instalments over the length of the licence.
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vi Group assets The core VTS capitalisation threshold is £1,000 inclusive of VAT. Assets with a net value of less than £1,000 can be grouped together and capitalised, as set out below: » networked computer infrastructure; » strategic IT equipment; and » furniture. Where the VTS replaces key components of grouped assets, the replacement is depreciated over the remaining useful life of the asset. Where regular maintenance is performed, this is expensed during the year. 1.3 Stocks The VTS aims to hold stock at a level that is commensurate with immediate business needs. Therefore stock holdings are minimal and have no significant realisable value outside the VTS. Stock has therefore been valued at zero for the year ended 31 March 2008. 1.4 Income Income is accounted for on a receivable basis. Grant in aid (GIA) is accountable on a cash basis. GIA received is treated as financing because it is regarded as a contribution from the controlling party. This gives rise to a financial interest in the residual interest of the VTS as an NDPB. For periods preceding 2006-07, GIA was treated as income. 1.5 Capital charge A charge, reflecting the cost of capital utilised by the VTS, is included in operating costs. The charge is calculated at the Government’s standard rate of 3.5 % in real terms on all assets less liabilities, except for donated assets and cash balances with the Paymaster General, which do not attract a charge. 1.6 Pensions In compliance with its Accounts Direction and the FReM, the VTS has adopted FRS 17. This accounting standard prescribes the treatment of retirement benefits in the accounts of employing entities. All VTS staff are members of the Local Government Pension Scheme (LGPS). The LGPS is a funded, multi-employer, contributory defined benefit statutory scheme administered in accordance with the Local Government Pension Scheme Regulations 1997, as amended. It is contracted out of the state second pension. The London Pensions Fund Authority administers the LGPS on behalf of the VTS but employees are admitted to thirty separate LGPS pension funds, each with their own employer contribution rate for VTS employees.
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The VTS, therefore, pays for the pension entitlements of existing and retired employees and also bears the full cost of the LGPS benefits for employees who retire early or with an enhanced pension. The total cost of granting early retirements or enhancements is charged to the Income and Expenditure Account in the year that the retirements are granted. Regular pension fund costs are paid from the same source. FRS 17 requires an organisation to account for pension liabilities as they arise, regardless of when pension payments are due to be paid. Setting side by side the value of all future pension payments and the snapshot value of investments as at 31 March each year, results in either an overall deficit or surplus. The total net deficit arising for the VTS, as at 31 March 2008, is £9,170,000. The assessment of current surplus or deficit arising from an FRS 17 valuation carries with it no additional payment requirements from the VTS to its LGPS pension authorities as the separate LGPS actuarial valuation, carried out every three years, sets revised employer contribution rates for each employer, such as the VTS, to ensure that existing assets and future contributions will be sufficient to meet future pension payments. Notes to the accounts the to Notes The VTS is an NDPB, sponsored by CLG. As such, there is no risk that it will default on its LGPS contribution payments in any way and the pension fund obligations are fully accounted for and protected at all times. 1.7 Leases Rentals payable under operating leases are charged to the Income and Expenditure Account in the year to which the payments relate. 1.8 Provisions The VTS provides for legal or constructive obligations which are of uncertain timing or amount at the Balance Sheet date on the basis of the best estimate of the expenditure required to settle the obligation. This practice conforms to FRS 12. Where the effect of the time value of money is significant, the estimated risk-adjusted cash flows are discounted using the Treasury discount rate of 2.8% (2006-07, 2.8%) in real terms. Dilapidation costs are treated as provisions and are recognised in terms of the obligations within the VTS’ leases on buildings which the VTS still occupies. Where buildings have been vacated, these have been included in Creditors. 1.9 VAT The VTS is not VAT registered. Therefore where goods and services include a charge for VAT the VAT-inclusive cost is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets. 1.10 Taxation The VTS is exempt from income and corporation tax under the Income and Corporation Taxes Act 1988. 1.11 Liquidity risk The VTS’ net revenue resource requirements are financed by resources voted annually by Parliament, just as with its capital expenditure. The VTS is not, therefore, exposed to significant liquidity risks.
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1.12 Interest rate risk All of the VTS’ financial assets and liabilities carry nil or fixed rates of interest and are, therefore, not exposed to significant interest rate risk.
2 Operating income Year ended Year ended 31 March 2008 31 March 2007 £’000 £’000 Rent receivable 0 4 Total operating income 0 4
3 Staff costs Year ended Year ended 31 March 2008 31 March 2007 £’000 £’000 The payroll costs for the VTS were as follows: Salaries 3,502 3,467 Social security costs 284 290 Pension costs 830 634 4,616 4,391 Other staff costs Redundancy payments and provisions 273 105 Fringe benefits 2 2 Agency/Seconded staff costs 26 71 Other non staff costs 32 8 333 186 Total staff costs 4,949 4,577 The average number of staff employed during the period to 31 March, was split as: Full time equivalent permanent staff 116 131 Fixed and short term contract, and agency staff 4 4 Total 120 135
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4 Other costs Year ended Year ended 31 March 2008 31 March 2007 £’000 £’000 4a Board costs Emoluments 92 86 Training 7 2 Travel and subsistence 38 34 Total board costs 137 122 4b Members’ costs Financial loss allowance 49 56 Training 115 82 Travel and subsistence 258 304
Notes to the accounts the to Notes Total members’ costs 422 442 4c Other administrative expenses Travel and subsistence – staff 139 204 Furniture and office equipment 3 4 Telecommunications and postage 402 508 Publications, printing and publicity 72 77 Recruitment, training and conferences 98 129 Catering and hospitality 25 25 Office supplies 55 69 Subscription to professional organisations 10 15 Car hire and lease cost 0 7 Removals and storage 9 8 Support services1 803 965 Information technology 337 202 1,953 2,213 Internal audit fees 26 26 External audit fees 32 31 Total administrative expenses 2,570 2,834
1 includes legal fees and outsourced contracts e.g. accounting system, IT support, payroll.
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4d Estates’ costs Year ended Year ended 31 March 2008 31 March 2007 £’000 £’000 Rent – paid as operating leases (buildings) 868 833 Rates 261 273 Service charges 264 312 Fixed maintenance 21 76 Domestic services 69 73 Heating and lighting 50 53 Insurance 16 22 Temporary accommodation 39 55 Security 7 8 Variable maintenance 100 110 Car park charges 13 17 Dilapidation charges 28 100 Strategic provisions 387 282 Total estates’ costs 2,123 2,214 Total other costs 4,693 5,048
5 Depreciation Year ended Year ended 31 March 2008 31 March 2007 Note £’000 £’000 Intangible fixed assets Amortisation for period 6 4 4 Tangible fixed assets Depreciation charge for period 7 253 168 Total Depreciation charge for period 257 172
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6 Intangible fixed assets Software licences £’000 Cost or valuation At 1 April 2007 8 Revaluation 0 Additions 0 Disposals 0 At 31 March 2008 8 Amortisation At 1 April 2007 (4) Revaluation 0 Additions 0 Notes to the accounts the to Notes Charge for period (4) At 31 March 2008 (8) Net book value at 31 March 2008 0 Net book value at 31 March 2007 4
7 Tangible fixed assets Leasehold Furniture Information Improvements and Fittings Technology Total £’000 £’000 £’000 £’000 Cost or valuation At 1 April 2007 0 86 1,178 1,264 Revaluation – Note 15 0 0 0 0 Additions 156 34 31 221 Disposals 0 0 0 0 At 31 March 2008 156 120 1,209 1,485 Depreciation At 1 April 2007 0 (32) (213) (245) Revaluation 0 0 0 0 Additions 0 0 0 0 Disposals 0 0 0 0 Charge for period (16) (20) (217) (253) At 31 March 2008 (16) (52) (430) (498) Net book value at 31 March 2008 140 68 779 987 Net book value at 31 March 2007 0 54 965 1,019
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8 Notional costs Guidance given by HM Treasury in respect of NDPBs’ Annual Reports and Accounts requires NDPBs to disclose the full cost of their activities in their accounts. The VTS has therefore included in its Accounts charges for the notional cost of capital. The cost of capital shown in the accompanying table has been arrived at by calculating a rate of 3.5% to the average capital employed. The average capital employed is defined as the average of total net assets over the year. Total net assets exclude bank balances.
Year ended 31 March 2008 £’000 Capital employed as at 1 April 2007 (12,706) Capital employed as at 31 March 2008 (8,920) Average capital employed (10,813) Notional cost of capital @3.5% (378)
9 Debtors Year ended Year ended 31 March 2008 31 March 2007 £’000 £’000 Due in one year Prepayments and accrued income 627 462 Other debtors 10 30 Represented by external bodies to Government 637 492
10 Creditors: amounts falling due within one year Year ended Year ended 31 March 2008 31 March 2007 £’000 £’000 Accruals and deferred income 642 632 Represented by bodies external to Government 642 632
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11 Provisions for liabilities and charges Year ended Year ended 31 March 2008 31 March 2007 £’000 £’000 At 1 April 395 175 Amount used from opening provision (62) (146) Unused amount reversed during the period (115) 0 Dilapidations based on third party valuations 514 366 732* 395*
* Represented at beginning and end of year by property dilapidations Discount rate is not applicable Notes to the accounts the to Notes 12 Provisions for pension liabilities Year ended Year ended 31 March 2008 31 March 2007 £’000 £’000 At 1 April 13,194 8,373 (Reduction)/addition in provision in period (4,024) 4,821 9,170 13,194 A provision has been recognised for pension liabilities. For purposes of valuing pension liabilities, the VTS commissioned its independent actuaries, Hymans Robertson. Valuations of the LGPS funds to which the VTS contributes were carried out at March 2007. The actuaries have updated the 2007 valuations to take account of the different assumptions required by FRS 17 and adjusted the results to allow for investment experience and cash flows between 31 March 2007 and 31 March 2008. Other experience, membership movements, salary growth etc for the period is assumed to be in line with the assumptions made in the funding valuations. The projected unit method of valuation was used to calculate the service cost under FRS 17. The financial assumptions used for the purposes of the FRS 17 calculations as at 31 March 2007 and 31 March 2008 are shown in the table below. 31 March 2008 Real 31 March 2007 Real Assumptions as at % p.a. % p.a. % p.a. % p.a. Price increases 3.6% – 3.2% – Salary increases 5.1% 1.5% 4.7% 1.5% Pension increases 3.6% – 3.2% – Discount rate* 6.9% 3.2% 5.4% 2.1%
* A real discount rate of 3.2 % was used to determine unfunded liabilities at 31 March 2008.
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Salary increases are assumed to be 1.5% more than price increases, in line with the assumption used in the latest formal valuations by the vast majority of the funds. The actuary assumed a rebasing of the results for those funds that did not have a real salary increase assumption of 1.5% p.a. at the 31 March 2007 formal valuation. Both the service cost and the interest cost over the year to 31 March 2008 have been based on HM Treasury’s net discount rate of 3.2% p.a. but using an inflation assumption as at 31 March 2008 to calculate the nominal discount rate (that is a discount rate of 6.9% using market implied inflation of 3.6%). Additionally, the interest cost over the year was based on the liabilities as at 31 March 2007 rebased using a corporate bond related discount rate.
Expected return on assets The expected return on assets is based on the long-term future expected investment return for each asset class as at the beginning of the period (as at 31 March 2008 for the year to 31 March 2009). FRS 17 requires that the expected return on assets is to be set by the VTS having taken actuarial advice. The expected returns adopted as at 31 March 2007 and 31 March 2008 are shown in the table below:
Expected Return at Expected Return at 31 March 2008 31 March 2007 Asset class (% per annum) (% per annum) Equities 7.7% 7.8% Bonds 5.0% 4.9% Property 5.7% 5.8% Cash 4.8% 4.9%
There is a range of actuarial assumptions that are acceptable under the requirements of FRS 17, particularly in respect of the expected return on equities. We consider that these assumptions are within the acceptable range and are thus consistent with the requirements of FRS 17. The assumed returns are net of administration and investment expenses. Allowance has been included in the cost of accruing benefits for expenses to the extent that we have been informed that it has been allowed for in the future service rate for each Fund.
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Balance sheet disclosure as at 31 March 2008 31 March 2008 Real 31 March 2007 Real Assumptions as at % p.a. % p.a. % p.a. % p.a. Price increases 3.6% – 3.2% – Salary increases 5.1% 1.5 % 4.7% 1.5% Pension increases 3.6% – 3.2% – Discount rate 6.9% 3.2% 5.4% 2.1%
Long-term Long-term return at Assets at return at Assets at 31 March 2008 31 March 2008 31 March 2007 31 March 2007 Assets (Employer) % p.a. £’000 % p.a. £’000 Equities 7.7% 19,154 7.8% 21,191 Bonds 5.0% 4,239 4.9% 3,729 Notes to the accounts the to Notes Property 5.7% 1,689 5.8% 2,009 Cash 4.8% 986 4.9% 963 Total 7.0% 26,068 7.2% 27,892
31 March 2008 31 March 2007 Net Pension Asset as at £’000 £’000 Estimated Employer Assets (A) 26,068 27,892 Present Value of Scheme Liabilities1 33,795 39,548 Present Value of Unfunded Liabilities2 1,443 1,538 Total Value of Liabilities (B) 35,238 41,086 Net Pension Liability (A)-(B) (9,170) (13,194)
1 The actuary estimates that this liability comprises of approximately £13,989,000, £3,495,000 and £16,311,000 in respect of employee members, deferred pensioners and pensioners respectively as at 31 March 2008. The approximation involved in the roll forward model means that the split of scheme liabilities between the three classes of member may not be reliable for certain Funds where there has been membership movement between active, deferred and pensioner classes. However, the actuary is satisfied that the approach used leads to reasonable estimates for the aggregate liability figure.
2 The actuary assumed that all unfunded pensions are payable for the remainder of the member’s life. On death of the member, any spouse will receive a pension equal to 50% of the member’s pension as at the time of death of the member. The unfunded liabilities as at 31 March 2008 have been valued using a real discount rate of 3.2%.
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12a Revenue account costs for the year to 31 March 2008 Analysis of amount charged to Income and Expenditure Account Year to 31 March 2008 Year to 31 March 2007 £’000 (% of Payroll) £’000 (% of Payroll) Service cost 673 21.4% 561 17.2% Past service costs – – – – Curtailment and settlements 108 3.4% 179 5.5% Decrease in irrecoverable surplus – – – – Total operating charge (A) 781 24.8% 740 22.7%
Amount credited to other finance income Year to 31 March 2008 Year to 31 March 2007 £’000 (% of Payroll) £’000 (% of Payroll) Expected return on employer assets 1,979 62.9% 1,744 53.4% Interest on pension scheme liabilities (2,209) (70.2%) (2,067) (63.3%) Net return (B) (230) (7.3%) (323) (9.9%) Net revenue account cost (A)-(B) 1,011 32.1% 1,063 32.6%
Movement in (Deficit) during the year Year to Year to 31 March 2008 31 March 2007 £’000 £’000 (Deficit) at beginning of the year (13,194) (8,373) Current service cost (673) (561) Employer contributions 642 663 Contributions in respect of unfunded benefits 97 93 Past service costs 0 0 Impact of settlements and curtailments (108) (179) Net return on assets (230) (323) Actuarial gains /(losses) 4,296 (4,514) (Deficit) at end of year (9,170) (13,194)
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12b History of experience gains and losses Year to Year to 31 March 2008 31 March 2007 £’000 £’000 Difference between the expected and actual return on assets (3,256) 182 Value of assets 26,068 27,892 Percentage of assets (12.5%) 0.7% Experience gains /(losses) on liabilities 3,075 268 Total present value of liabilities 35,238 41,086 Percentage of the total present value of liabilities 8.7% 0.7% Actuarial gains/(losses) recognised in STRGL 4,296 (4,514) Total present value of liabilities 35,238 41,086 Percentage of the total present value of liabilities 12.2% (11.0%) Notes to the accounts the to Notes
Projected pension expense for the year to 31 March 2009 Analysis of projected amount to be charged to Income and Expenditure Account for the year to 31 March 2009 Projected amount charged to Income and Expenditure Account Year to 31 March 2009 £(000) (% of Payroll) Estimated current service cost 500 15.2% Past service costs – – Curtailment and settlements – – Decrease in irrecoverable surplus – – Total operating charge (A) 500 15.2%
Projected amount credited to other finance income Year to 31 March 2009 £(000) (% of Payroll) Expected return on employer assets 1,803 54.7% Interest on pension scheme liabilities (2,407) (73.0%) Net return (B) (604) (18.3%) Estimated net revenue account cost (A)-(B) 1,104 33.5%
Note: these figures exclude the capitalised cost of any early retirements or augmentations which may occur during 2008-09.
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The service cost figures allow for the changes to LGPS benefits which are effective from 1 April 2008. Further, allowance is included for the abolition of the Rule of 85 for service from 1 April 2008, with certain members protected for service to years 2016 and 2020. The actual monetary amount of the service cost on 2008-09 will be based on an updated estimate of pensionable pay for 2008-09 and any further changes appropriate as circumstances change.
13 General reserve As at As at 31 March 2008 31 March 2007 £’000 £’000 Balance at 1 April 2007 (781) (815) Net expenditure for year1 (10,129) (10,116) Grant in aid treated as financing1 9,243 9,843 Transfer to pensions reserve 272 307 Balance at 31 March 2008 (1,395) (781)
1 The deficit on the Income and Expenditure Account is not fully covered by grant in aid from the Department as a result of timing differences in the accounting for and payment of reorganisation costs. The VTS has made provisions in relation to closure of offices in 2008-09. Grant in aid only reflects the VTS’ requirement for cash in any given year. Therefore, the VTS will look to the Department for additional funds to be drawn down through the supplementary estimates funding process in 2008-09 and through 2009-10, as the cash to pay these obligations is required.
14 Capital reserve As at As at 31 March 2008 31 March 2007 £’000 £’000 Balance at 1 April 2007 1,298 918 Capital grant in aid received 500 380 Balance at 31 March 2008 1,798 1,298
15 Revaluation reserve As at As at 31 March 2008 31 March 2007 £’000 £’000 Balance at 1 April 2007 0 (45) Write back of asset revaluations of prior year – Note 7 0 45 Balance at 31 March 2008 0 0
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16 Pension fund reserve As at As at 31 March 2008 31 March 2007 £’000 £’000 Balance at 1 April 2007 (13,194) (8,373) Transfer from general fund (272) (307) Movement on pensions1 4,296 (4,514) Balance at 31 March 2008 (9,170) (13,194)
1 Represents net movement on assets and liabilities recognised across all pension funds resulting in an increase in total pension liabilities (Note 12), offset by annual charges for accrued benefits, early retirements and employer’s contributions, such that the movement on Reserve falls short of the actuarial value of the liabilities.
17 Reconciliation of movement in funds
Notes to the accounts the to Notes As at As at 31 March 2008 31 March 2007 £’000 £’000 Opening balance of Reserves (12,677) (8,315) Movement in funds: Operating net expenditure (10,129) (10,116) Capital purchases 221 342 Revaluation of fixed assets 0 45 Movement on pensions 4,575 (4,476) GIA treated as financing 9,243 9,843 Closing balance of Reserves (8,767) (12,677) Represented by: General Reserve (1,395) (781) Capital Reserve 1,798 1,298 Revaluation Reserve 0 0 Pension fund Reserve (9,170) (13,194) Closing balance of Reserves (8,767) (12,677)
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18 Reconciliation of net expenditure to net cash flow from operating activities As at As at 31 March 2008 31 March 2007 £’000 £’000 Net expenditure before interest (9,899) (9,793) Depreciation charges 257 172 (Increase) in debtors (145) (277) Increase/(decrease) in creditors 10 (154) Increase in provisions for liabilities and charges 337 220 Grant in aid credited to general reserve 9,243 9,843 Net cash (outflow)/inflow from operating activities (197) 11
19 Reconciliation of net cash flow to movement in cash balance held As at As at 31 March 2008 31 March 2007 £’000 £’000 Cash at bank and in hand at 1 April 2007 29 0 Increase in cash for the year 124 29 Cash at bank and in hand held at: 153 29 HM Paymaster General Account 150 28 Lloyds TSB (imprest accounts) 3 1 Total balance at 31 March 2008 153 29
20 Commitments under non-private finance initiative leases Year ended Year ended 31 March 2008 31 March 2007 £’000 £’000 These were annual commitments as at 31 March 2008 to pay rentals under operating lease agreements as follows: Land and buildings Leases that: Expire within 1 year 206 95 Expire after 1 year but no more than 5 years 345 483 Expire after more than 5 years 120 167 671 745 There were no annual commitments as at 31 March 2008 to pay rental on office equipment under lease agreements.
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21 Capital commitments There were no capital commitments authorised and not contracted for at 31 March 2008.
22 Related party transactions The VTS is an NDPB sponsored during 2007-08 by the Department for Communities and Local Government (CLG), which is regarded as a related party. During the reporting period the VTS had a number of significant related party transactions. In particular the VTS is dependent on two shared services – IT management service and software development using capacities operated on its behalf by the Valuation Office Agency (VOA) and HM Revenue and Customs; and shared use of SAP accounting software provided by CLG’s Finance and Shared Services Division (FSSD).
Notes to the accounts the to Notes The values of related party transactions are as follows with: » Grant in aid of £9,743,000 was received from CLG, of which £9,243,000 was Revenue; » Payments of £791,170 were made to VOA for IT services; » Payments of £106,373 were made to FSSD for accounting services; and payments of £158,780 were made to the LGPS Pension Fund representing employers’ contributions for the year. None of the Board members, senior management staff or other related parties has undertaken any material transaction with the VTS.
23 Contingent liabilities There were no contingent liabilities identified at 31 March 2008.
24 Financial instruments Financial Reporting Standard 13 (FRS 13), Derivatives and Other Financial Instruments, requires disclosure of the impact financial instruments have had during the period in creating or changing the risks an entity faces in undertaking its activities. Because of the largely non-trading nature of its activities and the way government agencies are financed, the VTS is not exposed to the degree of financial risk faced by business entities. Moreover, financial instruments play a much more limited role in creating or changing risk than would be typical of the listed companies to which FRS 13 mainly applies. The VTS has very limited powers to borrow or invest surplus funds and financial assets and liabilities are generated by day to day operational activities and are not held to change the risks facing the VTS in undertaking its activities.
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As permitted by FRS 13, debtors and creditors which mature or become payable within 12 months from the Balance Sheet date have been omitted from the currency profile.
25 Post balance sheet events The VTS’ financial statements are laid before the Houses of Parliament by the Secretary of State for Communities and Local Government or HM Treasury. FRS 21 requires the VTS to disclose the date on which the accounts are authorised for issue. This is the date on which the certified accounts are despatched by the VTS’ management to the Secretary of State for Communities and Local Government or HM Treasury. The authorised date for issue is: 17 July 2008.
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Accounts direction
The Valuation Tribunal Service ACCOUNTS DIRECTION GIVEN BY THE SECRETARY OF STATE WITH THE CONSENT OF THE TREASURY, IN ACCORDANCE WITH PARAGRAPH 19(2) OF SCHEDULE 4 TO THE LOCAL GOVERNMENT ACT 2003 1. The annual accounts of The Valuation Tribunal Service (hereafter in this accounts direction referred to as ‘the Service’) shall give a true and fair view of the income and expenditure and cash flows for the year and the state of affairs at the year end. Subject to this requirement, the annual accounts for 2006-07 and for subsequent years shall be prepared in accordance with: (a) the accounting and disclosure requirements given in Government Accounting and in the Government Financial Reporting Manual issued by the Treasury (‘the FReM’), as amended or augmented from time to time; (b) any other relevant guidance that the Treasury may issue from time to time; (c) any other specific disclosure requirements of the Secretary of State; insofar as these requirements are appropriate to the Service and are in force for the year for which the accounts are prepared, and except where agreed otherwise with the Secretary of State and the Treasury, in which case the exception shall be described in the notes to the accounts. 2 Schedule 1 to this direction gives clarification of the application of the accounting and disclosure requirements of the Companies Act and accounting standards. Additional disclosure requirements of the Secretary of State and further explanation of Treasury requirements are set out in Schedule 2. 3. This direction shall be reproduced as an appendix to the annual accounts. 4 This direction replaces all previously issued directions.
Signed by authority of the Secretary of State
An officer in the Department for Communities and Local Government 28 March 2007
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Annual Report and Accounts 2007-08