Monday, 12 December 2016

Rating Proposals

Simon Crowcroft was speaking at the Chamber of Commerce Lunch last week, and on the subject of the States paying rates on States buildings which came up in a question, he said 11 Constables would be voting against it. He gave the impression that this was an example of unrepresentative democracy, as St Mary’s Constable was elected by far fewer voters on the electoral list than the St Helier one, and this was another example of a lack of voter parity.

What he didn’t say was why they would be voting against the proposal. I have been examining the minutes and reading between, because all the discussion is found in the relevant passages from the minutes of the Committee des Connetables:

“Following discussion, and having noted that the funding mechanism had not been identified to ensure that the payment of rates was cost-neutral for the States, the Committee considered that the proposals had not been satisfactorily formulated and that whilst the ratepayers of St Helier might see a one-off benefit this could be to the detriment of the ratepayers of other parishes.”

“The Committee noted that whilst it was proposed that the States should pay rates from 2017 it was still intended to identify an income stream from 2018 in order to achieve the required cost neutral position. The Connétables remained of the view that ratepayers generally should not have to provide funds to enable States Departments to pay their rates but rather Departments should regard rates as a utility bill and seek savings, or raise funds, to meet its liabilities.”

As I understand it, the Constables Committee objects to a principal of “Pay Paul by Robbing Peter” (to invert the proverb) so that the States would on the one hand pay rates on their property, and on the other increase the universal rate to cover it. The position is that no details are available, and it would be irresponsible to vote (a la Brexit, perhaps) for a proposal which did not set out the intended consequences, and detail the revenue streams by which the States was going to fund this. This is simple financial prudence, not an example (as Simon implied) of a town / country divide.

This also came up in the minutes:

“Revaluation of rateable values, as suggested in Part 12 of the draft MTFP Addition 2017-2019, would involve significant work but would not alter the amount raised (it would only redistribute the amount paid by ratepayers). The Committee recalled that prior to being fixed the rateable value had been based on the rental value and for certain properties, such as utility companies, this had had to be professionally assessed using the ‘profit’s method’. The Committee concluded that a revaluation should only be considered if it could be demonstrated that it would be beneficial but agreed it would not expect any costs to be met by parishes should it be decided to revalue rateable values.”

It is perhaps related, because the aborted scheme commissioned by Senator Ozouf in the run up to the 2014 election suggested a centralisation of the rates, replacing voluntary rates assessors with paid civil servants, and increasing rates to serve as a revenue stream rather than a mechanism for balancing the outgoings of each Parish. This seems like an attempt to start bringing that scheme into play or something like it, by the back door.

Incidentally, I might comment that in the 1980s there was a disaster when under Constable Len Downer, revaluation of ratable values was done over a four year period, during which some rates soared, but others remained relatively static. Some people had rises of 180% and other 10% because it was taking so long.

The system of revaluation was piecemeal and this was inequitable to those persons whose properties were assessed first. The delay of several years before similar properties in the Parish, and in some cases adjacent to the newly assessed ones, were dealt with meant that some ratepayers were carrying too high a proportion of the rates although temporarily.

Stormy Parish meetings took place! I’d recommend that any revaluation if it took place over time must be implemented on a simultaneous basis when complete and not as it went along piecemeal. That’s probably common sense, but that went out of the window in the 1980s, and that, together with inconsistent methods of revaluation, ended in an employee dismissal and a court case in which the mess was displayed for all to see.

So what might be portrayed as a “Constable’s Block Vote” by Constable Crowcroft is more a matter of prudence. Unlike those who voted for Brexit in the UK without the faintest idea of what that would involve, they want something concrete and solid on the table.

I can’t say I blame them, although I would point out that some of them did vote for the first stage of the Medium Term Financial Plan, when both a waste charge and a health charge were proposed without details being given. Those who did vote for more details, however, included Simon Crowcroft (who should want more details now instead of soft-peddling the issue), Sadie Rennard, John Le Maistre and Chris Taylor. 

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