Rating Manual section 6: valuation practice

Part 6: exemptions - part A - property used for disabled persons

The Valuation Office Agency's (VOA) technical manual for the rating of business (non-domestic) property.

Introduction

When considering any case for exemption in respect of property used for disabled persons, there are two key aspects that need to be taken into account:

The Hereditament, and the facts that surround it and The Law, and how it relates to those facts associated with the hereditament.

To take the hereditament point first, any particular case will turn on its own individual facts. Indeed, without a knowledge of them, it is simply not possible to decide one way or the other about any likely exemption. The breadth and range of the salient facts necessary to determine a disabled exemption case, together with the time it can take to establish them, should not be underestimated. Accordingly, it can never be too soon to engage with the occupier in an effort to discover what those facts are. A brief sketch of the various matters that will need to be resolved in a disabled exemption case are set out in Appendix: 6.

Once the facts have been established, one may start to consider the law.

The legislative provisions for Disabled Persons Exemption are set out in paragraph 16 of Schedule 5 to the Local Government Finance Act 1988 [LGFA 1988].

The original paragraph 16 provisions have been amended by:

The Care Act 2014 and Children and Families Act 2014 (Consequential Amendments) Order 2015 [SI 2015 No. 914]. With effect from 1 April 2015, the original meaning of ‘disabled person’, previously set out in paragraphs 16(2) and 16(3) has been replaced with a definition derived from the Equality Act 2010 in a new paragraph 16(1A). This change only relates to England.

The Social Services and Well-being (Wales) Act 2014 (Consequential Amendments) Regulations 2016. With effect from 6 April 2016, regulation 52 replaces the original definition of ‘disabled person’ with a definition derived from the Social Services and Well-being (Wales) Act 2014. This change only relates to Wales. The Social Services and Well-being (Wales) Act 2014 (Consequential Amendments) Regulations 2016, again in regulation 52, also replaces the original definition of “Welfare services for disabled persons” in paragraph 16(4) with two new definitions, applicable to England or Wales, as appropriate.

These changes to paragraph 16 Schedule 5 LGFA 1988 apply with effect from 1 April 2015 [England] / 6 April 2016 [Wales] and this Section reflects the current VOA approach to them.

However, in the event that:

these amended definitions become a contentious issue, or the Material Day for a particular paragraph 16 exemption case is before 1 April 2015 [England] / 6 April 2016 [Wales] caseworkers must seek advice from the Technical Adviser immediately.

The Law

The altered paragraph 16 now reads as follows:

16 (1) A hereditament is exempt to the extent that it consists of property used wholly for any of the following purposes -

the provision of facilities for training, or keeping suitably occupied, persons who are disabled or who are or have been suffering from illness:

  • the provision of welfare services for disabled persons;
  • the provision of facilities under section 15 of the Disabled Persons (Employment) Act 1944;
  • the provision of a workshop or of other facilities under section 3(1) of the Disabled Persons (Employment) Act 1958.

(1A) For the purposes of this paragraph in its application to hereditaments in England, a person is disabled if he has a disability within the meaning given by section 6 of the Equality Act 2010.

(2) For the purposes of this paragraph in its application to hereditaments in Wales, a person is disabled if he is disabled within the meaning of section 3 of the Social Services and Well-being (Wales) Act 2014.

(3) “Illness” has the meaning given by section 275 of the National Health Service Act 2006.

(4) “Welfare services for disabled persons” means services or facilities (by whomsoever provided) -

of a kind which a local authority in England had power to provide under section 29 of the National Assistance Act 1948 before it ceased to apply to local authorities in England; of a kind which a local authority in Wales has power to provide, or arrange to provide, to an adult in the exercise of its functions under sections 35 or 36 of the Social Services and Well-being (Wales) Act 2014. To summarise, the revised paragraph 16 Schedule 5 LGFA 1988 provisions, as they apply from April 2015 (England)/April 2016 (Wales), are as follows:

Paragraph 16(1), in sub-paragraphs (a)-(d), sets out exemption provisions for property wholly used for any of four specific purposes [the ‘purposive use’]. Paragraph 16(1A) defines the term “disabled person” for application in England. Paragraph 16(2) defines the term “disabled person” for application in Wales. Paragraph 16(3) defines the term “illness” as it relates to paragraph 16(1)(a). Paragraph (4) defines the phrase “welfare services for disabled persons”. In practice, these definitions are complex and their application requires the consideration of detailed criteria that varies depending upon the type of exemption being sought. The specific requirements are determined by individual ‘tests’ set within the wording of paragraph 16.

The Legislative Tests

In common with the other exempting provisions of Schedule 5, the specific wording of paragraph 16 sets a series of tests that must be satisfied before an exemption can be granted. Such tests are set by either specific wording or reference to other legislation.

This annotation of the paragraph 16 wording shows those tests:

16 (1) A hereditament is exempt to the extent that [TEST 1] it consists of property used wholly [TEST 2] for any of the following purposes -

  • the provision of facilities for training, or keeping suitably occupied [TEST 4], persons who are disabled [TEST 3b] or who are or have been suffering from illness [TEST 3b];
  • the provision of welfare services for disabled persons [see TEST 7].
  • the provision of facilities under section 15 of the Disabled Persons (Employment) Act 1944 [TEST 5];
  • the provision of a workshop or of other facilities under section 3(1) of the Disabled Persons (Employment) Act 1958 [TEST 6].

(1A) For the purposes of this paragraph in its application to hereditaments in England, a person is disabled if he has a disability within the meaning given by section 6 of the Equality Act 2010 [TEST 3a].

(2) For the purposes of this paragraph in its application to hereditaments in Wales, a person is disabled if he is disabled within the meaning of section 3 of the Social Services and Well-being (Wales) Act 2014 [TEST 3a].

(3) “Illness” has the meaning given by section 275 of the National Health Service Act 2006. [TEST 3b]

(4) “Welfare services for disabled persons” [TEST 7] means services or facilities (by whomsoever provided) -

of a kind which a local authority in England had power to provide under section 29 of the National Assistance Act 1948 before it ceased to apply to local authorities in England of a kind which a local authority in Wales has power to provide, or arrange to provide, to an adult in the exercise of its functions under sections 35 or 36 of the Social Services and Well-being (Wales) Act 2014.

The Tests in Detail

Test 1: “to the extent that”

It is important to note that the exemption applies to a hereditament only to the extent that the hereditament consists of eligible property used for the disabled.

The use of the words “to the extent that” in paragraph 16(1) means that the entirety of the hereditament does not need to be ‘used wholly’ for one of the qualifying purposes set out in paragraph 16(1)(a) to (d). The phrase “to the extent that” is common to all the exemption classes in Schedule 5 and its use in paragraph 16(1) makes it clear that if an identifiable part of a hereditament is used wholly for the qualifying purpose, that part can benefit from the exemption, even if the rest of the hereditament is not used for the qualifying purpose.

The words “to the extent that” should be construed in a purely spatial context, thus giving exemption to a part of a hereditament (if it meets the other requirements), rather than restricting the relief to whole hereditaments used for such purposes. The spatial extent within the overall hereditament wholly used for a qualifying purpose may be relatively small (but not an insignificant part of the whole), yet it will still qualify for exemption to that “extent”.

Test 2: “Used Wholly”

Case Law

The question whether any property within the hereditament is “used wholly” for any of the qualifying purposes was explored by the Court of Appeal in Samaritans of Tyneside v Newcastle Upon Tyne City Council CA [1985] RA 219. Although this decision predates LGFA 1988 [and was concerned with the Rating (Disabled Persons) Act 1978 and relief from rates], it turned essentially upon the phrase ‘used wholly for purpose(s)’. In this decision, two distinct elements were considered relevant:

  • the expressed purpose of the occupier of the property under consideration, and
  • the purpose for which it is actually being used.

These are both questions of fact and degree. If, when analysed in this way, the use of the property under consideration extends beyond the scope of the qualifying purposes, then the exemption does not apply.

However, the fact that activities wholly incidental to the qualifying purpose (that in themselves would not qualify for exemption) are carried on within the property under consideration would not take it outside the exemption. Nor need account be taken of de minimis occasional and temporary incidence on any given day of use for wider purposes. See section 67(5) LGFA 1988 and Tully v Jorgensen (VO) [1988] RA 242.

NB Where s.67(5) refers to the state of affairs existing immediately before the day ends, it is not requiring that attention be confined to the particular activities being carried on at a precise moment in time. What has to be considered is the use of the property with all its features and all that s.67(5) does is to identify the material time by reference to which any change in the use of the property is related.

In Chilcott (VO) v Day [1995] RA 285, the President of the Lands Tribunal considered whether holiday accommodation adapted for the disabled and let to disabled persons only when accompanied by an able-bodied person was “wholly so used” within the meaning of paragraph 16(1). The President considered that the provision of a holiday cottage did not fall within 16(1)(a) - “keeping suitably occupied”, but the VO conceded that the provisions of 16(1)(b) – provision of welfare services - were satisfied.

Whilst the ‘wholly’ test is mainly aimed at the use of the property for any of four specific purposes set out in paragraph 16(1)(a)-(d), it is also necessary to determine whether all the persons using the hereditament fall to be regarded as ‘disabled persons’ under this test. As in Chilcott, if more than a de minimis number of users do not meet the ‘disabled persons’ qualification, then the hereditament would fail this test.

“Used Wholly” and the De Minimis Non Curat Lex Maxim

The term de minimis non curat lex means that the law is not concerned with very small things. Whilst it is necessary under paragraph 16(1) for property to be “used wholly” for a qualifying purpose, the application of the de minimis principle would prevent the injustice of the exemption being denied in a case where the use is almost completely for a qualifying purpose but there is a very small non-qualifying use.

In Reid (VO) v Barking, Havering & Brentwood Community Health Care Trust[1997] RA 385, the Lands Tribunal expressed the view that the de minimis principle could apply, and this is consistent with the approach of courts in other areas of the law, where there is a willingness to apply the principle to prevent an obvious injustice. It should be noted that the point was left open by the President in Chilcott (VO) v Day [1995] RA 285, at p.291.

The de minimis principle in this context relates to use:

  • by non-qualifying persons, and
  • for non-qualifying purposes.
  • In the event that the de minimis principle becomes a contentious issue in relation to the amount of time or space * attributed to a non-qualifying use/user, advice must be sought from the Technical Adviser.

Practical Application of Test 1 [“to the extent that”] and Test 2 [“used wholly”]:

The requirements of Test 1, “to the extent that”, and Test 2, “used wholly”, apply to each of the four qualifying purposes for exemption described in paragraph 16(1)(a) to (d). With the identification of the main purpose for which the hereditament is being used as a pre-requisite, each test should be applied in sequential order having regard to this main purpose. Accordingly, the following thought processes should be applied:

Look at the hereditament as a whole. Does its purpose come within the exemption provisions in sub-paragraphs (a) to (d)? If it does, any property within the whole which does not itself meet the exemption requirements, but which has a purpose incidental or ancillary to the exempt purpose, will be included within the exemption. On the other hand, if the hereditament as a whole does not have a purpose which falls within the exemption provisions in sub-paragraphs (a) to (d), is there any significant identifiable part of the hereditament (either a physical identity or one clearly defined by use) which warrants separate consideration? If so, is it being used wholly for a qualifying purpose? Although the spatial extent of the part wholly used for a qualifying purpose may be relatively small in relation to the overall hereditament, providing it is not an insignificant part of the whole, it will still qualify for exemption to that “extent”.

Test 3a: “Disabled” & “Disabled Persons”

Definitions

The term “disabled person” is defined:

In England by paragraph 16(1A), with effect from 1 April 2015 In Wales by paragraph 16(2), with effect from 6 April 2016. Despite these two ostensibly different definitions, both ultimately refer back to the definition of ‘disabled’ contained in the Equality Act 2010. Consequently, there is unlikely to be any practical difference between England and Wales when considering the exemption provisions of paragraphs 16(1A) and 16(2).

The Equality Act 2010 Definition of ‘Disability’ and ‘Disabled Person’

In section 6 of the Equality Act 2010 the terms ‘disability’ and ‘disabled person’ are defined as follows:

6. Disability

(1) A person (P) has a disability if –

(a) P has a physical or mental impairment, and

(b) the impairment has a substantial and long-term adverse effect on P’s ability to carry out normal day-to-day activities.

(2) A reference to a disabled person is a reference to a person who has a disability.

(3) … …

(4) … …

(5) … …

(6) … …

In 2011, HM Government’s Office for Disability published “Guidance on matters to be taken into account in determining questions relating to the definition of disability”. This is primarily designed for adjudicating bodies such as courts and tribunals and, amongst other things, provides guidance on the meaning of the terms:

Substantial (see Page 14 of the Guidance Note) Long Term (see Page 27 of the Guidance Note) Affects the Person’s Ability to Carry Out Normal Date to Day Activities (see Page 34 of the Guidance Note). Certain conditions relating to addiction and dependency (together with a number of other tendencies) are excluded and whether a person is disabled for the purposes of the Act will generally depend upon the effect that an impairment will have on that person’s ability to carry out normal day to day activities.

Additionally, paragraph 6 of Schedule 1 to The Equality Act 2010 states that Cancer, HIV Infection and Multiple Sclerosis are each a disability for the purposes of that Act.

As caseworkers are likely to encounter a variety of abbreviations when considering the requirements of paragraphs 16(1A) or (2), this table explains their meanings:

ADHD Attention deficit hyperactivity disorder
 ASD  Autistic Spectrum Disorder
 BESD  Behavioural, Emotional and Social Difficulties
 HI  Hearing Impairment
 MLD  Moderate Learning Difficulty
 MSI  Multi-Sensory Impairment
 NSA  SEN support but no specialist assessment of type of need
 OTH  Other Difficulty/Disability
 PD  Physical Disability
 PMLD  Profound & Multiple Learning Difficulty
 SEMH  Social, Emotional and Mental Health [now replaced by SMEH]
 SEN  Special Educational Needs
 SEND  Special Educational Needs and Disabilities
 SLCN  Speech, Language and Communication Needs
 SLD  Severe Learning Difficulty
 SMEH  Social, Mental and Emotional Health
 SPLD  Specific Learning Difficulty
 VI  Visual Impairment

Practical Application: ‘Disability’ and ‘Disabled Person’

For obvious reasons, there can be no expectation that VOA staff will have any medical expertise. Hence it will always be good practice to seek confirmation of diagnosis of the disability that gives rise to the exemption claim from a medical practitioner or a mental health professional. Mental health professionals will be doctors (GPs and hospital doctors such as consultants), psychiatrists or psychologists. A Tribunal will require evidence of diagnosis of the impairment/condition by a competent and suitably qualified person, who will not normally be a social worker.

Test 3(b): “Illness”

In paragraph 16(3), the term ‘illness’ is given the same meaning as that provided in section 275 of the National Health Service Act 2006. In particular, section 275(1) states that the word “illness”:

“includes any disorder or disability of the mind and any injury or disability requiring medical or dental treatment or nursing.”

It follows that a person to whom this definition applies has to have to be clinically treated or diagnosed by a psychiatrist, doctor, consultant or mental health professional. Support for this contention is in the evidence reported in Samaritans of Tyneside v Newcastle Upon Tyne City Council CA [1985] RA at page 224 and second paragraph page 229).

Any cases of doubt should be referred to the Technical Adviser for advice.

Practical Application

Obtaining Information about Disabled Persons:

When disabled persons exemption is being claimed, information about the persons using the hereditament must be sought by using the specimen letter and form of return [FoR] set out as Appendix 1 and Appendix 2 [England] and Appendix 3 and Appendix 4 [Wales].

It is the responsibility of the claimant ratepayer to satisfy the VO that the persons using the premises are correctly diagnosed as disabled persons. It is not for VOA caseworkers to make detailed medical judgements in this area. Operationally, it is a primary requirement that this information is supplied by the applicant because the case cannot progress without it.

The FoR has been designed to obtain the necessary information in a suitably anonymous format which does not contravene Data Protection legislation. Its wording has been approved by counsel and its use accepted by the Valuation Tribunal for England. If any queries arise about its use, the Technical Adviser must be consulted.

Test 4: “facilities for training or keeping suitably occupied”

Background

There are two aspects to paragraph 16(1)(a):

“facilities for training”, and

“facilities … for keeping suitably occupied”. Both are aimed primarily at a type of help for the disabled which, if provided in the public sector, is provided by local authority social service departments, rather than by education departments or by main stream hospital provision in the NHS.

The wording of paragraph 16(1)(a) is taken directly from paragraph 2(1)(b) of Schedule 8 to the National Health Service Act 1977 [NHSA 77], which provides:

“2(1) A local social services authority may…… make arrangements for the purpose of the prevention of illness (etc)… and in particular for (b) the provision…. of centres or other facilities for training them or keeping them suitably occupied…”

As a whole, Schedule 8 to the NHSA 77 aims to empower local authority social services departments to carry out “after-care” functions. The fact that the wording of paragraph 16(1)(a) LGFA 88 is self-evidently based on paragraph 2 of Schedule 8 NHSA 77 strongly suggests that the ‘target’ for the exempting provision was the sort of activity one would expect a social services department to be providing in this connection.

Distinguishing “training or keeping suitably occupied” and ‘treatment’

It is vital to determine whether an activity at a facility constitutes ‘treatment’ because, if it does, it will not qualify for exemption under paragraph 16.

To do this, a sensible starting place is Section 3 of the NHSA 77. The immediately relevant parts of Section 3 provide for two different aspects of the comprehensive health service, in the following terms:

“(1) It is the Secretary of State’s duty to provide…… to such extent as he considers reasonably necessary to meet all responsible requirements –

Hospital accommodation ……. ……. ……. Such facilities for the prevention of illness, the care of persons suffering from illness and the after-care of persons who have suffered from illness as he considers are appropriate as part of the health service; …….” The existence of Section 3(1)(e) NHSA 77, which does authorise the Secretary of State to provide, as part of the Health Service, matters (including facilities for training) which can also be provided by social services departments, prevents the simple argument that if a facility is provided as part of the health service it cannot be a facility for training. Nonetheless the case law on the meaning of “hospital accommodation” within Section 3(1)(a) helps to identify the divide between this training aspect of Section 3 and the other, after-care. Section 3(1)(a) has to be read with the definition of “hospital” in Section 128 NHSA 77:

“Hospital” means:

any institution for the reception and treatment of persons suffering from illness, any maternity home, and any institution for the reception and treatment of persons during convalescence or persons requiring medical rehabilitation”.

The scope of this definition was considered in Minister of Health v Royal Midland Counties Homes for Incurables [1954] Ch 530. The case makes it clear that a wide approach is appropriate and that, in particular, the provision of skilled palliative nursing care will be “treatment” within the definition, with the consequence that an institution for the reception of persons requiring nursing will be a hospital provided pursuant to the duty in Section 3(1)(a), rather than a facility providing after-care.

Looking at the private sector, there is a powerful argument that any institution that requires registration as a nursing home under the Registered Homes Act 1984 [RHA 84] would be a “hospital” as defined (and therefore providing “treatment”) if provided as part of the Health Service. This is because the definition of nursing home in Section 21(1)(a) of the RHA 84 includes “any premises used… …for the reception of, and the provision of nursing for, persons suffering from any sickness, injury, or infirmity”.

A similar point arises in relation to the definition of mental health nursing home in Section 22 of RHA 84. The approach taken in the Home for the Incurables case has been followed by the Social Security Commissioners and the Court of Appeal in a number of social security cases determining whether claimants were being maintained free of charge in a “hospital or similar institution” under arrangements made as part of the Health Service.

The Home for Incurables case was directly concerned with skilled palliative nursing and whether this amounted to treatment. When considering the application of para 16(1)(a), a similar approach should be adopted to any example of skilled therapeutic intervention.

In Reid (VO) v Barking [1997] RA 385, the Lands Tribunal member regarded “the one to one focused counselling with a professionally qualified person which is undertaken by the CDAS [Community Drugs Advisory Service]” to be treatment. In so doing, he relied heavily on the Home for Incurables case.

In Reid, the principal argument was in relation to paragraph 16(1)(b) rather than 16(1)(a). However, for the reasons already given, an institution providing something that is ‘treatment’ should not be regarded as a facility for training, either as a result of the application of the ordinary meaning of the phrase or of consideration of the context within the NHSA 77, from which the words were originally taken.

This line of argument was submitted by counsel for the Valuation Officer in Halliday (VO) v The Priory Hospital Group of the Nottingham Clinic [2001] RA 355. In his decision, George Bartlett QC, the President of the Lands Tribunal, made a number of pertinent observations on the meaning of training in the context of a private clinic providing remedial facilities for persons suffering from drug or alcohol abuse and addiction. The case for the ratepayers was that after a person had been detoxified (phase 1 of the procedures and accepted as not exempt), the rest of the time in the clinic (phase 2) was spent receiving group therapy and discussion, counselling and other procedures aimed at helping address and cope with the illness; and thus these phase 2 procedures should properly be described as training. The case for the Valuation Officer was that phase 2 was not primarily training within the meaning of paragraph 16(1)(a) and should properly be regarded as treatment.

In his judgement the President considered the dictionary definition of training, and concluded:

“But a dictionary definition is no more than an aid to understanding, and it is not sufficient that some element in the definition of a word should be found to be capable of application to the subject matter under consideration. Clearly the individuals in phase 2 are being instructed and educated in their addictions and how to deal with them. The therapy is cognitive in nature … … The techniques employed at phase 2 are directed towards developing the patients knowledge and understanding of his illness and fitting him for a normal life free of his addiction, but it does not seem to me that he is being “trained” in the normal, general meaning of that word.”

In Halliday, Mr Bartlett reviewed the earlier LT decisions in Chilcott (VO) v Day [1995] RA 285 and O’Kelly v Davey (VO) [1996] RA 238, both of which concerned “keeping suitably occupied”. He, concluded that it was clearly implicit in the Chilcott decision of Judge Marder QC, the then LT President, that the word “training” indicated training for a particular occupation - see page 365 of the reported Halliday decision:

“I am of the same view. In my judgement “training” in para (16)(1)(a) is clearly … … instruction for some particular occupation or practice. What is in contemplation is the training of a person who is disabled or who is or has been ill so that he can occupy himself in a way that is suitable to his condition. The provision does not extend to training of a general sort designed to make an individual fit for a normal life in the sense relied upon by the ratepayer and it is clear that the clinic is not providing training for particular occupations.”

Distinguishing “training” and Education:

It is well established that the phrases “training” and “keeping suitably occupied” in paragraph 16(1)(a) of Schedule 5 LGFA 1988 have to be read together - see Chilcott (VO) v Day [1995] RA 285 at page 290, O’Kelly v Davey (VO) [1996] RA 238 at p.243 and Halliday (VO) v Priory Hospital Group of the Nottingham Clinic [2001] RA 355 at p.27.

When read together, the provision of facilities for “training, or keeping suitably occupied” means something like the provision of “training or occupation” - see Chilcott at p. 290.

In Halliday, it was said that “training” indicates “training for a particular occupation”, and it does not mean “training of a general sort designed to make an individual fit for a normal life”. It means something more like the training of a disabled or ill person “so that he can occupy himself in a way that is suitable to his condition”, see p.27.

It is very difficult to draw a clear conceptual distinction between ‘training’ and ‘education’. The two words are capable of meaning different things. Training could be viewed as something geared towards a specific occupation, whereas education could mean something more general.

However, ‘training’ and ‘education’ can also mean the same thing, which is the giving or receiving of systematic instruction.

There is no authority which indicates that ‘education’ falls outside the statutory phrase “training, or keeping suitably occupied”, and there are two authorities which suggest that ‘education’ can fall within the concept of ‘training’. In Church of England Children’s Society v Southwark LBC (1982) 22 RVR, ‘training’ was held to include classroom teaching or education, and in Nottingham County Council v Nottingham City Council (1987) RVR 82, a Local Education Authority special school was treated as a facility for ‘training’.

What is taught in special schools is the national curriculum. Yet, as a matter of practicality, if children in special schools are disabled, the national curriculum has to be taught in a way that is suitable to the condition or conditions of those children. Thus how the national curriculum is taught generally cannot be the same as in other schools.

In Halliday, the Lands Tribunal stated that “training” is not “training of a general sort designed to make an individual fit for a normal life”. On the basis of this statement, one reasonable view could be that educating disabled children in the national curriculum is by its very nature general. It is not geared towards any particular occupation and is only designed to ensure that disabled children have the same core level of education as other children.

The argument against this view is the statement in Halliday that training was not “training of a general sort designed to make an individual fit for a normal life”. However, one must bear in mind the context in which the Lands Tribunal expressed that view: Halliday was a case about a private clinic that provided treatment for drug and alcohol addicts. Various activities took place in the clinic such as therapy and counselling, and the activities were designed to ensure that an addict could go back into society either free of addiction or able to better manage it. The ratepayer argued that what went on in the clinic was ‘training’.

It was in response to that particular argument that the Lands Tribunal stated that training was not “training of a general sort designed to make an individual fit for a normal life”. When the Lands Tribunal used the term “fit for a normal life”, in the context of the case before it, it meant fit in the sense of ‘better able to mentally manage the effects of drug and alcohol addiction’.

It would be risky to take the Lands Tribunal’s finding in Halliday, that training is not “training of a general sort designed to make an individual fit for a normal life”, and apply it out of context to disabled children learning the national curriculum in a way that is suitable to their disabled condition.

Therefore, on balance, advice from counsel is that special schools catering for disabled children, that is to say those meeting the requirements of paragraph 16(1A) [England] or paragraph (2) [Wales], probably will be able to show that their activities fall within paragraph 16(1)(a) of Schedule 5 to the LGFA.

Practical Application

Shop or café used to give practical training to disabled persons:

Applying the reasoning expressed by George Bartlett QC in Halliday, a shop or café used ‘wholly’ for the provision of practical training to disabled persons to enable them to gain employment elsewhere or become an established member of the workforce will qualify for exemption. However, if the training purpose is merely incidental to the commercial operation of the shop, then exemption will not be appropriate.

Mental Health nursing homes and NHS Trust hospitals:

On a broad approach, mental health nursing homes and NHS Trust hospitals will not be exempt because an appropriately registered mental health nursing home in the private sector is an institution for the reception of people requiring nursing; it would be a “hospital” if provided as part of the Health Service and provides treatment rather than training. An NHS trust hospital is similarly likely to be provided pursuant to the “hospital” duty in Section 3(1)(a) of the NHSA 77 and therefore to be providing treatment, rather than training.

Assisted Daily Living Units:

Assisted Daily Living Units (ADLs) will not qualify for exemption under paragraph 16(1)(a) unless they are a genuine aftercare facility and provide training within the approach outlined by the President George Bartlett QC in Halliday. Assessment by occupational therapists and provision of physiotherapy or similar examples of therapeutic intervention are not regarded as falling within the provision of “training” although each case must be considered on its own facts. ADLs may however fall within paragraph 16(1)(b) on the basis that the units could be provided under Section 29 of the National Assistance Act 1948. All cases concerning ADLs must be referred to the Technical Adviser for guidance.

Test 4 (continued): “keeping suitably occupied”

The word ‘suitable’ is defined in the shorter Oxford English Dictionary as:

“fitted for, adapted or appropriate to a person’s character, condition, needs, etc”.

In the context of paragraph 16, if the adjective ‘disabled’ is inserted into this definition before the word ‘person’s’, it follows that “keeping suitably occupied” means suitable not for anybody, but for the disabled person(s) concerned.

Premises used by a disabled person to run a business may not necessarily constitute such facilities. Whilst the premises may be very suitable for the disabled person’s particular circumstances, they may be just as suitable for anyone else to use for business, for example a ground floor office. The use of such premises does not keep a disabled person, having regard to the disability, suitably occupied but affords the opportunity to conduct a business, just as it would anyone else.

There is an element of fact and degree to be considered and, in particular, the nature of the business is important. If the disabled person could be said to be occupying the premises primarily for therapeutic reasons, where the work is undertaken for its own sake rather than for earning a living, then exemption would be appropriate (provided other requirements for exemption are satisfied). The division between exemption and non-exemption is therefore between whether the use is primarily more in the nature of a pastime or hobby (exempt), rather than one that is a business undertaking. Even then, use for the purposes of a business could come within the concept of “keeping suitably occupied” if it is a business which is specifically suitable for the disabled person and is not one that might be generally followed in the absence of a disability.

Guidance on interpretation was given by the President of the Lands Tribunal, His Honour Judge Rich QC, in O’Kelly v Davey (VO) [1996] RA 238. When deciding that a workshop and store adjacent to a disabled person’s home and occupied by that person did not qualify for exemption under paragraph 16(1)(a), he said:

“I think that the meaning of ‘suitably occupied’ must be understood from the context of its juxtaposition to “training”. In this I agree with the approach to construing the words which was adopted by the President in Chilcott (VO) v Day. Occupation in this context means, in my judgement, occupation for the sake of occupation where training is not going to be beneficial. ‘Occupation’, however suitable, which is for the purpose of reward is not in my judgement contemplated in the sub paragraph, although if the occupation, pursued in its own sake, incidentally attracted remuneration to the trainee, that would not necessarily prevent the facilities … … being provided for the purpose of keeping persons who are disabled ‘suitably occupied’.”

Practical Application

“keeping suitably occupied”:

For exemption to apply, following the guidance given by the President of the Lands Tribunal in O’Kelly v Davey (VO), the occupation should be for its own sake, being:

a hobby occupation a therapeutic occupation [in this particular context, the word ‘therapeutic’ should be construed using its beneficial, relaxing, calming or satisfying meaning, rather than in a healing or curative sense] a “diversionary occupation”, as referred to in the parliamentary debate which led to the provisions of the Disabled Persons Employment Act 1958. The test is directed to the benefit of the occupation itself rather than the benefits of the fruits of the employment.

The provision of such an occupation can be made by the disabled person independently, or some other person or body for the benefit of the person to be occupied.

Test 7: “the provision of welfare services for disabled persons”

Statutory Background

The exempting provision contained in paragraph 16(1)(b) refers simply to “the provision of welfare services for disabled persons”.

Paragraphs 16(1A) (in England from 1 April 2015) and 16(2) (in Wales from 6 April 2016) indicates which persons are to be treated as disabled and paragraph 16(3) defines the meaning of “illness”.

The definition of “Welfare services for disabled persons” is made clear in the wording of paragraph 16(4), viz:

(4) “Welfare services for disabled persons” means services or facilities (by whomsoever provided) -

of a kind which a local authority in England had power to provide under section 29 of the National Assistance Act 1948 before it ceased to apply to local authorities in England; of a kind which a local authority in Wales has power to provide, or arrange to provide, to an adult in the exercise of its functions under sections 35 or 36 of the Social Services and Well-being (Wales) Act 2014. Although at face value there may appear to be a difference of approach between England and Wales, in practice this definition “welfare services for disabled persons” encapsulates the services that a local authority in England and a local authority in Wales each has a power to provide.

In England [For Wales follow this link ]

The direct connection in paragraph 16(4)(a) to Section 29 of the National Assistance Act 1948 [NAA 48] relates to the responsibilities for the disabled that it places on the social service departments of local or unitary authorities. Thus the scope of Section 29 NAA 48 is of critical importance.

However, before exploring this scope in detail, two important points need to be made:

Any arguments by ratepayers or their agents that the extended services now authorised by the Care Act 2014 ought to be included under this heading should be firmly rejected. The reasons for this stance are simple:

the range of services supported by the Care Act 2014 is wider than those available under the National Assistance Act 1948 and if the Care Act provided the proper test, Parliament would have said so when amending the definition of “welfare services for disabled persons”. The provision of “welfare facilities” under s.29(1) NAA 48, as amended by paragraph 11 of Schedule 13 to the Children Act 1989, states: “A local authority may, with the approval of the Secretary of State, and to such extent as he may direct in relation to persons ordinarily resident in the area of the local authority shall make arrangements for promoting the welfare of persons to whom this section applies, that is to say persons aged eighteen or over who are blind, deaf or dumb, or who suffer from mental disorder of any description and other persons aged eighteen or over who are substantially and permanently handicapped by illness, injury, or congenital deformity or such other disabilities as may be prescribed by the Minister.”

At first reading, it might easily be thought that exemption would only apply to those ‘welfare facilities’ directed to disabled persons who are aged 18 or over.

However, for the avoidance of doubt, such ‘welfare facilities’ equally include those for disabled children and those over the age of 18. This is because the focus in para 16(4) is on the services a local authority would have provided under s.29 of the NAA or would provide under ss.35 and 36 of the Well-being (Wales) Act, not on the recipient of those services.

Therefore, it does not matter if the services are for disabled adults or disabled children - so long as the service itself is “of a kind” that a local authority would have provided/ would provide under the NAA/ Well-being (Wales) Act, it is a welfare service for a disabled person.

This construction is wholly consistent with the use of the term disabled “persons” in para 16(4), which is of course capable of including adults and children.

On this construction, when s.29 of the NAA was amended by the Children Act 1989 so as to refer only to adults (because the duty to provide services to disabled children was by then catered for elsewhere), there was no need to correspondingly amend para 16(4). Such an amendment would have been otiose as the focus in para 16(4) was always on the service itself and not on the recipient of the service.

On the face of it, section 29 NAA 1948 gives local authorities wide powers to provide welfare services and facilities for disabled persons. The section is extended and made more specific by Section 2 of the Chronically Sick and Disabled Persons Act 1970.

However, the local authority’s powers are circumscribed by virtue of Section 29(1) of the 1948 Act (as amended) which makes provision of such services subject to the approval or direction of the Secretary of State.

The approvals and directions of the Secretary of State are consolidated in Appendix 2 to Department of Health Circular Local Authority Circular [LAC] (93)10, which came into force on 1 April 1993. The material direction is number 2, which says:

“2. (1) The Secretary of State hereby approves the making by local authorities of arrangements under Section 29(1) of the Act for all persons to whom that subsection applies and directs local authorities to make arrangements under Section 29(1) of the Act in relation to persons who are ordinarily resident in their area for all or any of the following purposes -

to provide a social work service and such advice and support as may be needed for people in their own homes or elsewhere; to provide, whether at centres or elsewhere, facilities for social rehabilitation and adjustment to disability including assistance in overcoming limitations of mobility or communication; to provide, whether at centres or elsewhere, facilities for occupational, social, cultural and recreational activities and, where appropriate, the making of payments to persons for work undertaken by them. (2) … …

(3) The Secretary of State hereby approves the making by local authorities of arrangements under Section 29(1) of the Act for all persons to whom that subsection applies for the following purposes:

(a) to provide holiday homes;

(b)-(e) … …

(4) Save as is otherwise provided or under this paragraph, the Secretary of State hereby approves the making by local authorities of all or any of the arrangements referred to in section 29(4) of the Act (welfare arrangements etc) for all persons to whom section 29(1) applies”.

The approvals and directions given in LAC (93)10 replaced those given in LAC 13/74, the circular extant at the date on which the 1990 rating lists came into force and the relevant circular on the facts of Evans v Suffolk County Council [1977] RA 120. Paragraph 8 of 13/74 set out a range of approved services and facilities that closely corresponded to those approved in the directions in LAC (93)10.

In Evans, the Lands Tribunal appears to have construed paragraph 16(4) as being apt to include ‘welfare services’ of a kind which a local authority has power to provide irrespective of whether or not actual approval has been given by the Secretary of State for such welfare services at the material date, under 13/74 (or the later direction, as appropriate). This conclusion is based on the incidence of the words “of a kind” and “(by whomsoever provided)” in the relevant paragraph 16(4).

However, if a local authority has power to provide some facilities under specific legislation other than section 29 NAA 48, subject to limitations, it may well not be open to it (or not have been open to it) to claim provision under the broader power of Section 29 rather than the specific legislative code in order to obtain exemption from non-domestic rates. This would be matter of construction of the relevant code.

Additionally, it should also be noted that section 29(6) states that the remainder of section 29 does not authorise or require “the provision of any accommodation or services required to be provided under the National Health Service Act 1977…”.

Institutions providing skilled nursing or other skilled therapeutic intervention, if provided as part of the Health Service, would be “hospitals” within the extended definition in the National Health Service Act 1977, and would thus be provided pursuant to the mandatory duty contained in Section 3(1)(a) of that Act. Specifically, section 29(6)(b) NAA 48 does not authorise local authority social services departments to provide nursing homes and the like.

In short, if an institution is providing “treatment”, it cannot be regarded as providing a service or facility of a kind which could be provided under Section 29.

In any case of doubt whether the interpretation “of a kind” can embrace provision of facilities provided under subsequent legislation (such as the NHS and Community Care Act 1990 and The Care Act 2014, which make provision of some facilities or services mandatory, rather than giving a power to provide them under the 1948 Act), advice should be sought from the Technical Adviser.

In Wales

In Wales, the phrase “welfare services for disabled persons” is defined by 16(4)(b) as being:

“of a kind which a local authority in Wales has power to provide, or arrange to provide, to an adult in the exercise of its functions under sections 35 or 36 of the Social Services and Well-being (Wales) Act 2014”.

See Appendix 5 for the wording of sections 35 and 36 of the Social Services and Well-being (Wales) Act 2014.

Although at face value, these appear to be different tests, counsel has advised that in practice there is no real difference in the services or facilities an English local authority had power to provide under section 29 of the National Assistance Act 1948 and the services or facilities a Welsh local authority has power to provide or arrange to provide when exercising its functions under sections 35 or 36 of the Social Services and Well-being (Wales) Act 2014.

The terms of s.29, including subsections (1) and (4), and the approvals and directions made by the Secretary of State for Health under subsection (1) (see Appendix 2 to Local Authority Circular LAC (93) 10), make it plain that s.29 is concerned with arrangements promoting welfare in the sense of promoting well-being. That is also essentially what a Welsh local authority is doing when exercising its functions under sections 35 or 36 of the Well-being (Wales) Act, as the provisions of that Act and the Codes of Practice made under it suggest.

Whilst a Welsh local authority can under s.34(2) of the 2014 Act potentially do a number of things to meet needs under sections 35 or 36 of that Act, such as provide or arrange “accommodation in a care home…or premises of some other type” under s.34(2)(a), there is only a single reference in s.34(2) to providing or arranging to provide “services or facilities” and that is in s.34(2)(c), which refers to “services, goods and facilities”.

Therefore, the kind of “services or facilities” a Welsh local authority would provide/ arrange to provide under sections 35 or 36 are whatever services or facilities are envisaged by s.34(2)(c). There is no suggestion that the services or facilities envisaged by s.34(2)(c) are any broader than those envisaged by s.29 of the NAA.

Accordingly, the meaning of “welfare services for disabled persons” is in substance the same in England and Wales.

Practical Application

Examples of EXEMPT “welfare services …”

The following are all examples of “welfare services” that fall within the ambit of section 29 NAA 48:

Hostels

Section 29(4)(c) of NAA 48 enables the provision of hostels for disabled persons who are employed in sheltered workshops, or for whom work or training is being provided under the Disabled Persons (Employment) Acts of 1944 and 1958. These hostels (which in some cases may be non-domestic and otherwise rateable because they provide only short-term accommodation) will be exempt.

Shops

Section 29(4)(e) of 1948 Act enables the provision of shops and other facilities for the disposal of produce made by disabled persons. (NB: This does not confer exemption on ‘charity shops’ generally).

Recreational Facilities

Section 29(4)(f) of the 1948 Act enables the provision of recreational facilities for disabled persons. Examples of such facilities that will qualify for relief include sports facilities specifically provided for the disabled; social or day centres, short-stay holiday homes.

Conversely, day centres, etc where the users do not fall within the definition of “disabled” in paragraph 16(1A) or 16(2) will not be exempt.

Advice Centres

Advice centres potentially fall within Section 29. If it is plain, on the facts, that the target group for advice consists entirely of the disabled or ill within the relevant statutory definitions, then the centre will be exempt. Exemption will not fail if from time to time advice is given to a person falling outside the definitions such as carers and mental health professionals, provided such use does not offend the de minimis non curat lex maxim. If on the other hand it is clear that the centre exists to give advice to a wider set of clients, only some of whom are disabled etc, then it cannot be regarded as being wholly used for the relevant purpose.

Support Services

It is possible for a property to qualify for exemption even though it is not physically used by the disabled. The pertinent test is whether it is used wholly for services directly supporting the provision of qualifying welfare services.

An example would be a floor of offices occupied by a local authority Social Services department that serve as the base for outreach teams who deliver services to disabled persons in the community.

Without this ‘operational hub’ it would not be possible to deliver the services. If these services or facilities are of a kind which fall within section 29 of the NAA 48 there is no reason to refuse exemption, unless the open plan offices are shared by persons engaged in work which does not fall within a qualifying purpose, and that proportion of use is more than de minimis. In that case the “wholly used” test is not satisfied and exemption cannot apply.

(NB: Offices which are used for fund raising will not be exempt, nor where the functions are of an administrative or financial nature, such as the Finance Department of a local authority which in addition to its other tasks will handle payment of accounts, invoicing, wages, etc for teams which deliver welfare services to the disabled.)

Offices that are located within a hereditament that is exempt or partially exempt may also be treated as exempt if their use is no more than incidental to the qualifying exempt use.

Practical Application

Examples of NON-EXEMPT “welfare services”:

Because section 29(1) is a general enabling provision, it does not specify any of the arrangements that a local authority may make, but section 29(4) lists some of them by way of example. However it is possible to identify a number of services or facilities in respect of which a local authority may not make arrangements under section 29. These include:

Residential Accommodation

It is settled law that a local authority is not empowered to provide residential accommodation in the exercise of its community care functions under section 29 of the National Assistance Act 1948. In Vandyk v Oliver [1976] AC 659, Lord Wilberforce said, at page 690B:

“As regards the second Act (of 1948) I regard it as clear that section 29 does not authorise the provision of residential accommodation. I shall not enlarge on this since I believe that all your Lordships agree on the point. Section 21 of the same Act does so authorise…”.

It should be noted that Section 29(4) does in fact authorise the provision of hostel accommodation in the specific circumstances there stated.

In the case of training centres operated by the Guide Dogs for the Blind Association, it has been accepted that residential accommodation which is provided for partially sighted and blind persons attending the centre for training purposes as an integral part of the training process, should be treated as exempt because it is incidental to the primary purpose that is exempt under paragraph 16(1)(a).

Respite care facility/emergency beds occupied with a day centre

Unless it can be shown that the use is incidental to the primary use of the building as a day centre, the provision of respite care facility/emergency beds occupied with a day centre does not fall within the exemption provisions of paragraph 16(1)(b).

In Evans (VO) v Suffolk County Council [1997] RA 120, a day centre was occupied as part of a larger complex comprising long and short-stay residential accommodation, physiotherapy, administrative offices and other facilities. It was accepted that the day centre itself was exempt under paragraph 16(1)(b). The sole issue in the appeal was whether at the material date the short-stay accommodation was exempt.

In Evans, the President of the Lands Tribunal held that he was bound by the decision in Vandyk v Oliver (VO), finding that:

“the provision of residential accommodation is not within the power of a local authority to provide as “welfare services” under s.29 of the 1948 Act.”

It should be noted that the President took into account changes in the relevant legislation in NAA 48, but nevertheless held that the Vandyk case remained an accurate statement of the extent of a local authority’s power to provide residential accommodation under NAA 48. He said, at page 131:

“the provision of accommodation is not incidental, but is the predominant function and purpose of the provision made. As it seems to me, the single common strand running through the 11 categories which… represent those persons admitted, is the need for shelter, for a roof over their heads for a short period – Nor is a person whom the Social Services Department require to observe and assess, in order to determine the extent of home care which may be necessary, [admitted in order to benefit from training or suitable occupation]. Likewise, the first requirement in the case of “respite care” is accommodation away from the permanent home… .”

Although the overriding purpose of a local or unitary authority in establishing and operating both a respite care facility and emergency beds is to provide residential accommodation to those admitted, it is inevitable that such persons be provided with daytime activities and the incidents of residential care during their stay. That provision, however, is properly to be characterised as incidental to the overriding primary purpose of the respite care/emergency facility. It follows that neither the respite care facility nor the emergency beds can be said to be wholly used for the purposes described in either paragraph 16(1)(a) or paragraph 16(1)(b).

Services provided under the National Health Service Act 1977

Section 3(1) of the NHSA 77 specifies the Secretary of State’s duty in this respect, which includes, inter alia, the provision of hospital and other accommodation; facilities for the prevention of illness; the care and after-care of persons suffering from illness, and such other services as are required for the diagnosis and treatment of illness. It should be noted that the provision of these matters is excluded from section 29 of the 1948 Act by section 29(6)(b), except insofar as they may fall within the arrangements made under section 29(4)(b) or (4)(c).

Mental health nursing homes and NHS Trust Hospitals will be outside section 29, save for the rare possibility of an institution provided by the Secretary of State for Health purely under the after-care functions in section 3(1)(e) of the NHSA 77.

Private clinics for alcohol and drug abusers if registered as nursing homes will similarly fail the test.

In Reid (VO) v BHB Community Health Care NHS Trust [1997] RA 385, it was held that parts of a health centre used on premises for the Community Drug Advice Service [CDAS] were not exempt under paragraph 16(1)(b) because the counselling service, which formed the principal part of the services provided by CDAS at the appeal hereditament, constituted diagnosis and treatment within the meaning of section 3 of the NHSA 77, and were not therefore welfare services which a local authority has power to provide under Section 29 of the NAA 48. The CDAS provided a treatment advice and counselling service for drug misusers, and also provided advice to members of the public who were not drug dependent but required advice on the subject of drug abuse.

The provision of any arrangements for fund-raising activities

This non-exemption is absolute, unless exceptionally encompassed within section 29(4)(e) of the 1948 Act.

Car Parking Spaces for Disabled Persons

Car spaces allocated and marked for use as “disabled spaces” or reserved for use as part of a Shopmobility Scheme will not be exempt under paragraph 16(1)(b) because they are not considered to fall within any of the part of Section 29 of the NAA 48. Counsel has advised that where local authorities provide car parking spaces for disabled persons in their car parks the powers to do so are to be found in the Road Traffic Regulation Act 1984 Part IV, in particular sub-sections 32 and 35. Section 117(3)(b) of that Act defines a “disabled person’s concession” as “a provision made in any order under this Act for the use of a parking space by disabled persons’ vehicles”. If the spaces are provided under these regulations rather than section 29 of the NAA 48 they will not be exempt under paragraph 16(1)(b).

The fact that such spaces may be provided free of charge is not relevant when considering exemption from rating.

Shopmobility Schemes

Shopmobility schemes are operated by many local authorities, private bodies, and charities who are members of the National Federation of Shop Mobility. Facilities required to operate a Shopmobility scheme will usually include a store for the equipment and vehicles, admin offices and parking.

Persons using the scheme will be required to register for insurance purposes on the first visit but thereafter subsequent visits can be made without notice. The facility will usually be free of charge. It may be funded directly by the local authority, or by a combination of grant, donations or sponsorship.

A scheme will normally provide manual and powered wheelchairs and battery powered scooters and chairs to anyone with a limited mobility a result of temporary or permanent disablement, age, accident, illness, pregnancy etc. The service is available for use by all and there is no requirement to be registered as disabled.

As a consequence, such schemes will not qualify for exemption because they fail the “wholly used” test on account of their wider availability to persons who do not meet the definition of disabled.

Public Conveniences Reserved for Disabled Persons

The issue is whether a public convenience reserved for use by disabled persons is a facility of a kind which a local authority is empowered to provide under section 29 of the NAA 48.

Legal advice has concluded that such a facility is not exempt because it is not a facility the provision of which the Minister has directed nor approved under Section 29(1) of the NAA 48, and because there exists express and specific powers for the provision of such a facility by local authorities under section 87 of the Public Health Act 1936 and section 5 of the Chronically Sick and Disabled Persons Act 1970. The 1970 Act enables the provision of public conveniences for the disabled by both County and District Councils, whereas welfare service under the 1948 Act are provided by Social Services authorities, ie County Councils (and now unitary authorities). Parliament so ordered the distinction of functions under the 1970 Act with the result that the provision of public conveniences for disabled persons is treated separately from the provision of welfare services under section 29 of the NAA 48, and is to be undertaken by a wider class of authorities. There is therefore a strong case for concluding that Parliament never intended that the powers under section 29 were to be used to provide public conveniences since the facilities and services mentioned in section 29(4) of NAA 48 are quite different in kind to public conveniences for the disabled.

There is no authority directly in point, and the issue is open to argument.

However, given that exemption has previously been conceded over a number of years since 1990 in accordance with earlier instructions, the issue of exemption for public conveniences should as a matter of policy not be contested where the facility is specifically reserved or constructed for use for the purposes of disabled persons.

In many cases, a toilet for disabled persons will form part of a larger public convenience. In which case the hereditament will be partially exempt to the extent that the toilet for disabled persons is exempt, and the description in the rating list must in such circumstances contain the words “part exempt”.

Test 5: “Facilities under section 15 of the Disabled Persons (Employment) Act 1944”

Facilities may be provided under section 15 of the Disabled Persons (Employment) Act 1944 for enabling disabled persons who, by reason of the nature or severity of their disability, are unlikely to obtain employment, or to undertake work on their own account. Such facilities are the subject of Ministerial determination and their funding subject to Treasury approval.

Whether or not a factory or workshop is provided under the relevant provision can normally be resolved by reference to the constitution of the occupying body. If the premises are provided under this statutory provision, then exemption under paragraph 16(1)(c) will be appropriate.

Facilities provided under this heading are sometimes called ‘sheltered workshops’ and perhaps Remploy was once the most common provider created under the provisions of the 1944 Act, and exemption was therefore granted to their workshops, as well as to associated premises.

However, between 2007 and 2012 Remploy closed the majority of their factories and others have closed subsequently. Some have continued in other ownership, including management buy-outs. Depending on the relevant facts of each case, such factory facilities are likely to remain exempt under the provisions contained in s.29(4).

Latterly, however, Remploy itself has undergone a major change in its operations and has branched out into providing general employment assistance not only for disabled people but also for others with barriers to employment. Indeed, following the closure of most Remploy factories, the provision of these assistance services have become Remploy’s principal purpose.

In July 2014, the Department for Work and Pensions (DWP) announced that it was looking for Remploy Employment Services to leave government control, by way of a joint venture between a private company and Remploy’s employees. In March 2015 it was confirmed that Remploy would become owned by US service provider Maximus (70%) and an employee trust (30%). The transfer of ownership was completed on 7 April 2015.

In the event that any facilities occupied by this re-fashioned company the subject of a claim for exemption under paragraph 16, the merits of the case should be considered under the criteria applicable under section 16(1)(a) or 16(1)(b) and not paragraph 16(1)(c). Particular note should be made of the persons to whom assistance is being offered in such facilities, as it is possible that they may not all be disabled.

Test 6: “Workshop or other facilities under section 3(1) of the Disabled Persons (Employment) Act 1958”

A local authority has power under section 3(1) of the Disabled Persons (Employment) Act 1958 to provide facilities for registered persons ordinarily resident in its area who are seriously disabled for employment, or to work on their own account, under special conditions, and of training for such employment or work.

A simple enquiry should be made if the premises are provided under this statutory provision. If so, exemption under paragraph 16(1)(d) will be appropriate.

Tests 5 & 6: General

Associated premises, which do not qualify for exemption under paragraph 16(1)(c) or (d) of schedule 5 to the 1988 Act, may qualify for exemption under paragraph 16(1)(b) if they are used wholly to form a provision of “welfare services for disabled persons”. The scope of these “welfare services” is explained in more detail above.

The only case law under these provisions is Davey (VO) v O’Kelly [1999] RA 245. This case concerned the provision of a wheelchair by the Employment Service for use in the appeal hereditament (a workshop and store occupied by Mr O’Kelly for the repair of musical instruments, making musical boxes and musical instruments). The claim for exemption was limited to paragraph 16(1)(c) and the Lands Tribunal decided that the wheelchair had been provided under the Training Act 1973 and not the Disabled Persons (Employment) Act 1944; that the appeal premises comprised business premises used as a workshop and that the hereditament was not used wholly for the provision of the wheelchair. The appeal hereditament was therefore not exempt from rating under paragraph 16(1)(c).

Appendix 1

Obtaining information about Disabled Persons [England]

Letter to Accompany Form of Return [England]

[under the VOA Regional Valuation Unit Letterhead]

Dear Sir/Madam,

Request for Information under Paragraph 5(1) of Schedule 9 to the Local Government Finance Act 1988

Property Address:

You have asked that the above named property should not be shown in the rating list because it is exempt from rating under paragraph 16 of Schedule 5 to the Local Government Finance Act 1988. Before going into the details of your case, it might be helpful if I set out the legal requirements for exemption of this type.

The Legislation:

Paragraph 16 of Schedule 5 to the Local Government Finance Act 1988 (“the LGFA”), lists four uses of property which may qualify for disabled exemption. This is what paragraph 16(1) says: 16 (1) A hereditament is exempt to the extent that it consists of property used wholly for any of the following purposes -

the provision of facilities for training, or keeping suitably occupied, persons who are disabled or who are or have been suffering from illness; the provision of welfare services for disabled persons; the provision of facilities under section 15 of the Disabled Persons (Employment) Act 1944; the provision of a workshop or of other facilities under section 3(1) of the Disabled Persons (Employment) Act 1958.

Any activities that are outside the scope of these specific exempt purposes will mean that exemption cannot apply. The legislation also requires that to be exempt, a property must be “wholly” used for an exempting purpose. However, if this is the case, it may still be possible to exempt a part of the property on the basis of that particular part being used wholly for an exempting purpose. If you think that only part of the property may qualify for exemption, please clearly identify that part, preferably on a plan. Paragraph 16(1A) of Schedule 5 sets out the following definition of a “person who is disabled”: (1A) For the purposes of this paragraph in its application to hereditaments in England, a person is disabled if he has a disability within the meaning given by section 6 of the Equality Act 2010.

Paragraph 16(3) of Schedule 5 sets out the following definition of “illness”: (3) “Illness” has the meaning given by section 275 of the National Health Service Act 2006.

To help me reach a decision, I shall need some further information from you, please. This will be best recorded on the enclosed Form of Return. This knowledge will enable me to fulfill my duties under Part III of the Local Government Finance Act 1988 to compile and maintain rating lists. On this form you will also be required to make three declarations.

The Required Declarations:

The first confirms that the whole of the property, or the part otherwise identified, is used wholly for an exempt purpose . The second declaration is that each of the current users of the property is disabled. Please make this declaration by completing the table on the attached form, as appropriate for each user. For each of the users you must show the nature of their condition and that it has been diagnosed by a suitably qualified medical practitioner or mental health professional.

The Valuation Officer is required to ascertain that each relevant user has a medically diagnosed condition and will require evidence of the name and position of the medical practitioner or mental health professionalwho has given that diagnosis.

Simply ticking the column, or non-completion, will not be sufficient to pass the test within the statutory provisions. Self-diagnosis, or diagnosis by a non-medical professional (for example, an educationalist), will not be sufficient to pass the statutory requirements.

You should then sign and date the third, general, declaration and provide the contact details requested.

The completed document should then be returned to me, using the enclosed pre-paid envelope.

Please note that under the legislation false statements can give rise to criminal prosecution.

If you prefer, you can provide this information in another format (you do not have to use the attached form). However, you must provide all the required information, and your reply must include a statement that the information is correct and complete to the best of your knowledge and belief which must be signed and dated by you.

I look forward to hearing further from you in due course.

Yours faithfully

[Signature]

Valuation Officer

Enclosed:

Form of Return

Pre-Paid Envelope

Form of Return

Appendix 2: Form of Return [England]

Paragraph 5(1) Schedule 9 Local Government Finance Act 1988 (LGFA):

Statement in relation to exemption under paragraph 16 of Schedule 5 to the LGFA - Property used for the disabled

About this notice

This request for information is a notice sent to you pursuant to powers granted to the Valuation Officer under paragraph 5(1) of Schedule 9 to the Local Government Finance Act 1988.

You are required, as the owner or occupier, to provide information regarding the property (see paragraph 5(2) of schedule 9 to the Act.

You may be prosecuted if you make false statements and you will be liable to penalties if you do not complete and return this form within 56 days.

How to fill in this form

You may find it useful to have a copy of  any lease or agreement to hand.

If when filling in this form you need more space for any question, you can continue on a separate sheet of paper. Please make sure that any extra sheets you use:

  • clearly show the relevant question number(s)
  • are signed and dated, and
  • are securely attached to this form.

I believe that the information requested will assist me in carrying out functions conferred or imposed on me by or under Part III of the Local Government Finance Act 1988 (concerning non-domestic rating), including compiling a new Rating List or maintaining an existing Rating List.

 

 

........................................................................

Valuation Officer

Time limit

You must return this form completed within 56 days from the day you receive it.

If you do not return this form within 56 days you will be liable to a penalty of £100 [see paragraph 5A(1) of Schedule 9 to the Local Government Finance Act 1988].

A pre-paid envelope is enclosed for your reply.

Declaration 1

I declare that:

[] the whole of [insert property address] *:

[] the part of the property identified on the attached plan*

is used wholly for one or more of the purposes set out in paragraph 16(1) of Schedule 5 to the Local Government Finance Act 1988.

[*delete as appropriate]

Please complete the table below for each user of the property, with anonymised details of their respective disabilities:

Declaration 2

I declare that each of the users below, whose names have been anonymised, has consulted with and been diagnosed by a medical practitioner or medical health professional who has confirmed that the user has a disability within the meaning given by section 6 of the Equality Act 2010 or are, or have been, suffering from "Illness" as defined in section 275 of the National Health Service Act 2006 .

Name

For example:

A, B, C or 1, 2, 3, and so on.

1

Please provide details of each user's disability or illness.

2

Please state the name and role of the medical practitioner or mental health professional who confirmed the user’s diagnosis.

Declaration 3

To the best of my knowledge and belief the information I have given in this form and any attachments is correct and complete.

Signature ………………………………………………………………………………….

Name in Capitals ……………………………………………………………………….

Date …………………………………………………………………………………………

Position …………………………………………………………………………………….

I am the (delete as appropriate)

Occupier / Owner / Lessee / Occupier’s Agent / Owner’s Agent / Lessee’s Agent

Daytime Telephone No. ………………………………………………………………

Email Address ……………………………………………………………………………

Obtaining information about Disabled Persons [WALES]

Appendix 3

Letter to Accompany Form of Return [Wales]

[under the VOA Regional Valuation Unit Letterhead]

Dear Sir/Madam,

Request for Information under Paragraph 5(1) of Schedule 9 to the Local Government Finance Act 1988

Property Address:

You have asked that the above named property should not be shown in the rating list because it is exempt from rating under paragraph 16 of Schedule 5 to the Local Government Finance Act 1988. Before going into the details of your case, it might be helpful if I set out the legal requirements for exemption of this type.

The Legislation:

Paragraph 16 of Schedule 5 to the Local Government Finance Act 1988 (“the LGFA”), lists four uses of property which may qualify for disabled exemption. This is what paragraph 16(1) says: 16 (1) A hereditament is exempt to the extent that it consists of property used wholly for any of the following purposes -

the provision of facilities for training, or keeping suitably occupied, persons who are disabled or who are or have been suffering from illness;

  • the provision of welfare services for disabled persons;
  • the provision of facilities under section 15 of the Disabled Persons (Employment) Act 1944;
  • the provision of a workshop or of other facilities under section 3(1) of the Disabled Persons (Employment) Act 1958.

Any activities that are outside the scope of these specific exempt purposes will mean that exemption cannot apply.

The legislation also requires that to be exempt, a property must be “wholly” used for an exempting purpose. However, if this is the case, it may still be possible to exempt a part of the property on the basis of that particular part being used wholly for an exempting purpose. If you think that only part of the property may qualify for exemption, please clearly identify that part, preferably on a plan.

Paragraph 16(2) of Schedule 5 sets out the following definition of a “person who is disabled”: (2) For the purposes of this paragraph in its application to hereditaments in Wales, a person is disabled if he is disabled within the meaning of section 3 of the Social Services and Well-being (Wales) Act 2014.

Paragraph 16(3) of Schedule 5 sets out the following definition of “illness”: (3) “Illness” has the meaning given by section 275 of the National Health Service Act 2006.

To help me reach a decision, I shall need some further information from you, please. This will be best recorded on the enclosed Form of Return. This knowledge will enable me to fulfill my duties under Part III of the Local Government Finance Act 1988 to compile and maintain rating lists. On this form you will also be required to make three declarations.

The Required Declarations:

The first confirms that the whole of the property, or the part otherwise identified, is used wholly for an exempt purpose.

The second declaration is that each of the current users of the property is disabled. Please make this declaration by completing the table on the attached form, as appropriate for each user. For each of the users you must show the nature of their condition and that it has been diagnosed by a suitably qualified medical practitioner or mental health professional.

The Valuation Officer is required to ascertain that each relevant user has a medically diagnosed condition and will require evidence of the name and position of the medical practitioner or mental health professionalwho has given that diagnosis.

Simply ticking the column, or non-completion, will not be sufficient to pass the test within the statutory provisions. Self-diagnosis, or diagnosis by a non-medical professional (for example, an educationalist), will not be sufficient to pass the statutory requirements.

You should then sign and date the third, general, declaration and provide the contact details requested.

The completed document should then be returned to me, using the enclosed pre-paid envelope.

Please note that under the legislation false statements can give rise to criminal prosecution.

If you prefer, you can provide this information in another format (you do not have to use the attached form).

However, you must provide all the required information, and your reply must include a statement that the information is correct and complete to the best of your knowledge and belief which must be signed and dated by you.

I look forward to hearing further from you in due course.

Yours faithfully

[Signature]

Valuation Officer

Enclosed:

Form of Return

Pre-Paid Envelope

Form of Return

Appendix 4: Form of Return[Wales]

Paragraph 5(1) Schedule 9 Local Government Finance Act 1988 (LGFA):

Statement in relation to exemption under paragraph 16 of Schedule 5 to the LGFA - Property used for the disabled.

About this notice

This request for information is a notice sent to you pursuant to powers granted to the Valuation Officer under paragraph 5(1) of Schedule 9 to the Local Government Finance Act 1988.

You are required, as the owner or occupier, to provide information regarding the property (see paragraph 5(2) of schedule 9 to the Act.

You may be prosecuted if you make false statements and you will be liable to penalties if you do not complete and return this form within 56 days.

How to fill in this form

You may find it useful to have a copy of  any lease or agreement to hand.

If when filling in this form you need more space for any question, you can continue on a separate sheet of paper. Please make sure that any extra sheets you use:

  • clearly show the relevant question number(s)
  • are signed and dated, and
  • are securely attached to this form.

I believe that the information requested will assist me in carrying out functions conferred or imposed on me by or under Part III of the Local Government Finance Act 1988 (concerning non-domestic rating), including compiling a new Rating List or maintaining an existing Rating List.

 

 

........................................................................

Valuation Officer

Time Limit

You must return this form completed within 56 days from the day you receive it.

If you do not return this form within 56 days you will be liable to a penalty of £100 [see paragraph 5A(1) of Schedule 9 to the Local Government Finance Act 1988].

A pre-paid envelope is enclosed for your reply.

Declaration 1

I declare that:

[] the whole of [insert property address] *:

[] the part of the property identified on the attached plan*

is used wholly for one or more of the purposes set out in paragraph 16(1) of Schedule 5 to the Local Government Finance Act 1988.

[*delete as appropriate]

Please complete the table below for each user of the property, with anonymised details of their respective disabilities:

Declaration 2

I declare that each of the users below, whose names have been anonymised, has consulted with and been diagnosed by a medical practitioner or medical health professional who has confirmed that the user has a disability within the meaning of section 3 of the Social Services and Well-being (Wales) Act 2014, or are, or have been, suffering from "Illness" as defined in section 275 of the National Health Service Act 2006 .

Name

For example:

A, B, C or 1, 2, 3, and so on.

1

Please provide details of each user's disability or illness.

2

Please state the name and role of the medical practitioner or mental health professional who confirmed the user’s diagnosis.

Declaration 3

To the best of my knowledge and belief the information I have given in this form and any attachments is correct and complete.

Signature ………………………………………………………………………………….

Name in Capitals ……………………………………………………………………….

Date …………………………………………………………………………………………

Position …………………………………………………………………………………….

I am the (delete as appropriate)

Occupier / Owner / Lessee / Occupier’s Agent / Owner’s Agent / Lessee’s Agent Daytime Telephone No. ………………………………………………………………

Email Address ……………………………………………………………………………

Appendix 5

Sections 35 and 36 of the Social Services and Well-being (Wales) Act 2014.

35 Duty to meet care and support needs of an adult

(1) A local authority must meet an adult’s needs for care and support if it is satisfied that conditions 1, 2 and 3 are met (but see subsection (6)).

(2) Condition 1 is that the adult is -

  • ordinarily resident in the local authority’s area, or
  • of no settled residence and within the authority’s area.

(3) Condition 2 is that -

  • the needs meet the eligibility criteria, or

  • the local authority considers it necessary to meet the needs in order to protect the adult from abuse or neglect or a risk of abuse or neglect.

(4) Condition 3 is that -

  • there is no charge for the care and support needed to meet those needs, or
  • there is a charge for that care and support but -
  • the local authority is satisfied on the basis of a financial assessment that the adult’s financial resources are at or below the financial limit,
  • the local authority is satisfied on the basis of a financial assessment that the adult’s financial resources are above the financial limit but the adult nonetheless asks the authority to meet his or her needs, or
  • the local authority is satisfied that the adult lacks capacity to arrange for the provision of care and support and there is no person authorised to make such arrangements under the Mental Capacity Act 2005 or otherwise in a position to do so on the adult’s behalf.

(5) For the meaning of “financial assessment” and “financial limit” see Part 5.

(6) The duty under subsection (1) does not apply to an adult’s needs to the extent that the local authority is satisfied that those needs are being met by a carer.

36 Power to meet care and support needs of adult

(1) A local authority may meet an adult’s needs for care and support if the adult is—

(a) within the local authority’s area, or

(b) ordinarily resident in the authority’s area, but outside its area.

(2) If a local authority meets the needs of an adult who is ordinarily resident in the area of another local authority under subsection (1), it must notify the local authority in whose area the adult is ordinarily resident that it is doing so.

(3) A local authority has the power to meet needs under this section whether or not it has completed a needs assessment in accordance with Part 3 or a financial assessment in accordance with Part 5.

Appendix 6

Facts to be established when dealing with a claim for paragraph 16 exemption

When considering any case for exemption in respect of property used for disabled persons, it is essential to establish the facts peculiar to it. Once known, they can be tested against the relevant statutory requirements.

The following list sets out the various enquiries that will need to be made in order to elicit those facts. As it may be necessary to present this information at the VT or the UT[LC] in evidence, the information is best established in writing.

This list is not exhaustive.

Are the persons using the hereditament or directly benefiting from services provided from the hereditament “ill” or “disabled” as defined in paragraphs 16(1A) or 16(2)?

If not, then exemption does not apply.

Information should be sought regarding:

who the clients are generally (note that because of the confidentiality of clients’ records this information must be general and not specific). As appropriate, Appendices 1 to 4 may be used for this purpose. [Appendix 1, Appendix 2, Appendix 3, Appendix 4] what illnesses and/or disabilities they have (note that because of the confidentiality of clients’ records this information must be general and not specific) the selection criteria for persons attending the facility – for example, they may be referred by GPs, there may be a minimum age limit, they may be referred by social services, etc.

Who is the rateable occupier of the hereditament?

This may be a local authority, NHS Trust joint venture, or private company. Most facilities provided by NHS Trusts will provide treatment and will therefore not be exempt.

Under what statute is the facility provided? When considering exemption under para 16(1)(b) – provision of welfare services – only facilities which could be provided under the National Assistance Act 1948 (as amended) are exempt. Therefore, the authorising statute needs to be identified.

Every publicly funded facility will be authorised by statute. Private facilities will be licensed under a statutory provision. Identification of the relevant statute is important since this will determine exemption.

What is the stated purpose of the facility?

This information will assist in deciding which provision of paragraph 16 may apply.

Is it a day centre for the elderly, elderly disabled, a respite centre, an assessment centre, a training centre, an assisted daily living centre?

Are there any residential facilities? If so, is the residential facility essential to the purpose and what is the average length of stay? Is the intention to improve clients’ health or prevent deterioration, or assess future care needs? If administrative offices are they the ‘operational hub’ of a local authority or other body providing a qualifying service within 16(1)(a) or (b)?

Usually there is a policy document or brochure which sets out the purpose of the facility; how this is to be achieved; eligibility criteria; what the referral process is, etc. A copy should be requested as this will often contain much of the information required.

What actually goes on at the facility?

Again, this information will assist in deciding which provision of paragraph 16 may apply.

How do those who attend the facility spend their time?

Are there any classes provided (keep fit, craft-work, music therapy, anger management, assistance with life skills etc). If so, this may indicate a treatment purpose rather than a welfare or training purpose.

Do clients read, watch TV, chat, play games etc according to their individual preference? (If so, this may indicate the facility is not a training facility but may be ‘keeping suitably occupied’).

Are activities supervised/guided by staff at the facility? This may indicate training or therapy. Do clients receive any physiotherapy, occupational therapy, counselling, whilst at the facility? This will indicate treatment.

Are clients’ abilities and needs for further assistance assessed at the facility?

Is medication administered at the facility, and if so, what is the nature and purpose of that medication? If admin offices, what services are administered? Is the office wholly used for such services? Offices used for fund raising or part of the Finance department of a local authority will not be exempt.

Staff at the facility

Are there clinical staff at the facility – doctors, nurses, occupational therapists, physiotherapists, psychiatric social workers, etc?

If so, how many and/or how often do they attend at the facility?

What are their professional qualifications? (SRN, SEN etc.)

What proportion of the whole staff do these medical/quasi-medical staff constitute?

What is the regime?

An overall understanding of how the facility operates, including an understanding of what sequence of events might take place throughout the period during which a client uses the facility helps to set the property into a wider context.

How frequently do clients attend (every day, one day a week)?

Do they attend indefinitely or for a fixed number of weeks?

How many attend at one time?

Are clients likely to re-attend at a later date? (as an outpatient)?

Use of the property

Only accommodation used for an exempt purpose will qualify under paragraph 16.

Consequently, if there is any doubt that the whole or part is exempt/not exempt, a room by room note should be made of the use and marked on a layout plan.

All relevant facts as to the use and operation of the hereditament as a whole and the activities involved need to be established by reference to the material day. Sometimes the VO may have only limited information, but in the case of an appeal before the Valuation Tribunal this can be augmented by way of directions from the Tribunal at a pre-hearing review, and by the use of powers of discovery in the Upper Tribunal [Lands Chamber].

If rooms are in dual use then a note should be made of the uses during each day or how they vary from day to day.