I wrote to you last week about the conference session on the proposed rating assessment of covered markets and also about the decision in the Knaresborough case which, although concerned with an open market, appears to have implications for markets generally. When Chris Royle, of the Valuation Office, attended our conference, he did not mention the Knaresborough decision which is dated late August 2007, and, following notification of the decision, I raised the significance of the case with him. Chris does not feel that it has any real relevance in terms of the exercise we are currently undertaking in respect of covered markets and he is probably correct in this assessment. Where the decision does have significance, however, is in respect of the valuation approach in respect of markets generally and the fact that markets have been recognised as a unique trading operation, a point which Nabma has made from the outset, and it is this aspect which is important in terms of what follows the determination of whether a particular covered market should be subject of a single or separate assessment.

Iain Dewar, our rating expert, has said that some markets that have already been assessed may want to consider an appeal on the basis of the Knaresborough decision and that is a matter for each Nabma member based on the particular facts relating to their market. However Iain has also said that it expects serious consideration to be given to an appeal on the Knaresborough decision so it is a case of watch this space.

In terms of our ongoing discussions with the Valuation Office I have already indicated that our proposal to defer this matter to 2010 has been rejected. Chris Royle has indicated that not only does a proposal to defer until 2010 go against the VOs duty to maintain an accurate Valuation List, it effectively puts the issue on the back burner again, placing the Valuation Office in the same position in a few years time; Nabma members would arguably be no better off, and could be worse off, as it would still take a long time to get Valuation Officers into the position where they could decide with confidence to split the (200 or so) candidate markets sensitively

Chris goes on to say that there are two possible ways to approach this issue: Firstly, split the candidate markets now, based on the very minimal information received, and thrash out the likely issues and difficulties arising from such an ill informed and speedy action until the dust eventually settles down, or, secondly, to spend time marshalling the information needed on the 200 or so candidate markets, so that Valuation Officers can make a better informed and sensitive decision based on all available facts, hopefully with a measure of agreement and co-operation from the operators - performing any splits required all at once, when the whole review is concluded.

Chris Royle hopes Nabma will agree that the second avenue is the more palatable. If so, he asks that we agree to continue over the coming months and years to assist VOs in their deliberations, which will include:

The formulation of the questions we would seek answers to on the questionnaires
Your encouraging your members to provide information in answer to the questionnaires
Inspections of markets to establish the "facts on the Ground"
Take time to place the facts and legal situation together to establish whether a "potential candidate" market becomes a "definite candidate" or not.
Embark on the "splitting of the pie" analysis (rent/rates/charges) analysis with some care
seeking a measure of agreement of the eventual valuations
Preparing the mechanics of the splits (notices etc)
Do the splits.
It is proposed that this process is done with great diligence and Nabma’s agreement and assistance. Performing such a task in advance would take time, and here, Chris states, we are potentially looking at the longer rather than the short term. Once it has been determined what splits are required in respect of all candidate markets, the material and effective date rules in force at that time will be applied. There is a strong chance "definite candidates" may not be split until the 2010 list is in force, therefore it would be prudent to have the relevant information at the anticipated valuation date of April 2008 in anticipation of such an eventuality, in addition to the evidence required to an AVD of April 2003.

Obviously, should any 2005 rating appeal against a "potential candidate" market be listed for VT hearing, this would have the effect of taking that market out of the "global review", examining all the facts etc at the relevant material day in determination of that appeal. Whether this results in the particular candidate market remaining as a single assessment or not depends on the facts. If it turned out the 2005 appeal was in respect of a "definite candidate", that market would be subsequently split as a result. However, if the appeal were withdrawn before it became clear it was a "definite candidate" market, Chris Royle can see no reason why the market should not remain a "potential candidate", to be considered as part of the "global review" and the decision to split being taken along with all the others.

As I indicated at Conference Nabma’s willingness to continue the dialogue is not a statement of Nabma’s acceptance that it is right to make a separate assessment in respect of covered market but members will already know that we have taken counsel’s opinion on the issue and we need to be guided by the conclusions in that opinion.Nabma’s main priority is to protect the viability of its members markets and this is why I believe it is vital that we continue to have this national dialogue.

I said at conference that on issues like this there is clear recognition of the value of a national organisation.Nabma has already incurred substantial amounts of money in dealing with this matter and Nabma is indebted to NMTF who are sharing this cost and also taking part in the discussions. Unless members tell me to the contrary Nabma will continue the national dialogue and keep members informed of developments.

NABMA has been informed on 21st September that the valuation officer has lodged an appeal regarding the Knaresborough decision.

Graham Wilson,
Chief Executive
Nabma