Row blocks review of property rates

 

A little-known dispute at the Valuation Office has cost local authoritiesmillions of euro, writes Mark Hennessy.

For months, industrial action has blocked the beginning of a review of the country's commercial property rates, the lifeblood of local government.

In February 2001, the then Minister for the Office of Public Works, Mr Martin Cullen, promised a fundamental review of the rateable valuation of 150,000 properties throughout the country within seven years.

While the Oireachtas passed the legislation with relatively little fuss, staff in the Valuation Office, which is based in the Irish Life Centre in Dublin's Lower Abbey Street, were less co-operative.

Seeking a clutch of promotions and extra pay in return for their co-operation, staff imposed industrial action from May 2nd - though neither management, nor unions have been keen to publicise the existence of the dispute.

The dispute delayed the beginning of the national rates review, which had been due to get under way from May 1st. More seriously, revisions to existing rateable valuations ground to a near halt.

Already, warns Galway City Manager Mr John Tierney, the dispute has cost his local authority €350,000, while nationally, local authorities have millions outstanding. Led by Dublin City Manager, Mr John Fitzgerald, city and county managers have warned the Government and the Valuation Office for months that action must be taken to end the row.

The Valuation Offices provides a crucial service. Though under the control of the Department of Finance, it is is independent on a day-to-day basis in its valuation of all commercial property.

Although a State enterprise, the Valuation Office is profitable. Each revision to a rateable valuation - perhaps because of a new building on the site, or an extension - costs a minimum of €250.

On its website, the office declares: "Our mission is to deliver a high quality, impartial valuation service to our customers, at a competitive cost, through skilled and motivated staff." It has been some time since such standards of service have been available.

Under legislation dating back to the 1980s, as amended by Supreme Court judgments along the way, all commercial properties, along with tolls and rights over property, attract rateable valuations. The basis for an assessment is the net annual value of the property, which is equivalent to the annual rent, exclusive of all payments for rates, taxes, and repairs and insurance.

Because no national valuation has taken place since the first and only such exercise between 1852 and 1865, local authorities have been forced to use increasingly complicated fractions to strike a rate. The national review now being frustrated by the dispute would remove "deficiencies and make it more transparent and equitable for the taxpayer", said the Office of Public Works. And it would not necessarily mean extra costs for the business community, at least not immediately, because the Department of the Environment would impose a cap in the first year.

"A revaluation will lead to a redistribution of the rates burden between ratepayers, reflecting changes in the property market that have taken place over the years," said Mr Cullen at the time.

Faced with industrial action, Valuation Office managers contacted their paymaster, the Department of Finance. Some promotions could be offered, but not extra pay. Change has already been paid for, argued Finance.

The national rates review was to be hived off to a separate body, the Revaluation Office to be staffed by 30 contract valuers and led by one civil servant promoted to principal officer rank, and three others promoted to lower grades.

However, the review would be carried out differently "using high technology output and a very focused, driven approach to the work", said one Valuation Office manager.

Although unhappy with the staffing arrangements, one of the unions involved, IMPACT, suspended industrial action for a month to allow negotiations to get under way.

However, IMPACT's original demand that all of its members should be promoted was quickly rejected by the Department of Finance, who feared copycat demands from elsewhere in the Civil Service.

However, there were concessions. Two extra IMPACT officials would be promoted. The offer was rejected and industrial action resumed in September, according to sources.

During the interregnum, staff worked on a backlog of revision applications worth €20 million extra in rates. However, the valuations had not been posted when industrial action resumed.

Since then, senior managers finished off the outstanding work and dispatched the new figures in early December. The office still has a substantial block of revision applications on hand. Management has now proposed to bring in an outside facilitator.

A solution will not be easy to find. The action is but a symptom of the grumbles shared by professional and technical staff spread throughout the Civil Service.

"People had very high expectations of their careers. Those expectations have not been met, particularly for professional and technical staff. There have been a massive number of promotions for administrative grades," said one manager.