Courts
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
This section applies to all Crown, magistrates’, combined and county courts in England and Wales.
Crown, magistrates’ and combined courts
List description: law court and premises
Scat code 414 (contractors basis)
Scat suffix S
Scat code 415 (rental valuations)
Scat suffix S
County courts list description: law court and premises
Crown, magistrates’ and combined courts are a specialist class and responsibility for valuation will lie with the National Valuation Unit (NVU).
County courts are also specialist and responsibility for valuation lies with the NVU.
Queries of a complex nature arising from the valuation of individual properties should be referred to the NVU class facilitator via the class co-ordination team (CCT).
The Class Co-ordination team has responsibility for ensuring effective co-ordination across this class. The team is responsible for the approach, accuracy and consistency of valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating list. Caseworkers have a responsibility to:
follow the advice given at all times not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team seek advice from the co-ordination team before starting any new work
Purpose built Crown, magistrates’ and combined courts are a sui-generis class and consequently, as a general rule, only evidence relating to hereditaments in the same mode or category of use is pertinent.
See:
Scottish and Newcastle (Retail) Ltd v Williams (VO) (RA 2000 P 119) and the subsequent Court of Appeal decision –Williams (VO) v Scottish and Newcastle Retail and Allied Domecq [RA 2001 P 41)
-
re the appeal of Reeves (VO) RA 2007 P168
-
Dawkins (VO) v Royal Leamington Spa BC and Warwickshire County Council (1961) RVR 291
The method of valuation applicable to Crown, combined and magistrates’ courts is the contractor’s basis; this methodology was endorsed by the Lands Tribunal (Upper Tribunal Lands Chamber) in Lavery (VO) -v- Leeds City Council (2002)
The method of valuation applicable to county courts is the rentals method and the general legal principles that apply to all hereditaments in rating lists apply to county courts.
6.1 Method of measurement
Crown, combined and magistrates’ courts should be measured to Gross Internal Area (GIA), in accordance with the VOA Code of Measuring Practice.
County courts should be measured to Net Internal Area (NIA), in accordance with the VOA Code of Measuring Practice.
6.2 Description
Criminal courts (Crown, combined and magistrates’) are generally housed in purpose-built, highly specialised courthouses. Court buildings need to be seen to be there and seen to be public, authoritative and important in society. They represent the concept of justice and, therefore, have a symbolic function in their architecture. A great many court buildings have historic value and this civic quality is something that is also very much sought after in modern court complexes. Criminal Courts require intricate segregated circulation routes so that the judge, jury, and defendant(s) (if in custody) can make their way to the court room without meeting each other or any other users (e.g. members of the public). Such complexity makes criminal courts a difficult building type to design and procure. They generally comprise an entrance hall that clearly displays the law court function of the building. In addition there will be formal court rooms typically with secure docks as well as informal family and youth courts. Areas for sensitive and intimidated witnesses may exist and these are typically accessed separately from the public entrance. Separate retiring rooms for Judges and Juries will also form part of the accommodation. If a custody area is present this will be a self-contained compartment within the main court building. Car parking ranges from a limited number of secure spaces reserved for the Judiciary to extensive areas of public parking.
The accommodation found within a county court is generally little different to that found within standard office accommodation, the Judge’s Chamber is typically the only area that has any significant uplift in terms of quality.
6.3 Requirements
a) Unit of assessment
Where co-located with other users it is possible that unit of assessment issues may arise, particularly where some facilities are shared. In these circumstances the principles referred to in Rating Manual.
Regard must also be had to The Local Government and Rating Act 1997 Part 1 Section 3 (3) - “the property is to be treated for the purposes of this part as if it were a single hereditament occupied by such one of the occupiers as appears to the billing authority to occupy the largest part of the property.” The Crown is indivisible and so in instances where there are more than one Crown occupier in a courthouse they should be treated as a single ratepayer. In cases of difficulty advice from the NVU valuer should be obtained.
b) Survey detail
The following information is required:
A plan (CAD or otherwise) should be obtained where available and check dimensions taken on site as necessary, if a plan cannot be obtained then one should be drawn up
A description of the building(s) to include details of age, general condition, the date of refurbishment (if applicable) and the method of construction
Where the contractor’s basis is to be the method of valuation only the GIA of individual building(s) is required Where the rentals basis is to be the method of valuation the NIA and a detailed description of each individual room is required
A description and full detail of all services to the hereditament e.g. heating, air conditioning, security systems, solar panels etc
The number of car parking spaces (or the dimensions of the area used for parking), the nature of the parking surface and a note of the extent of site landscaping
The site area
Survey information including plans should be stored in the property folder of the Electronic Document Records Management (EDRM) system.
Where property is to be valued using the contractor’s basis of valuation, the GIA of the building(s) should be entered onto the valuation spreadsheet held on the non-bulk server (NBS).
Where the property is to be valued using the rentals method then data, utilising appropriate BCI and sub location codes, should be captured within RSA.
The contractor’s basis of valuation should be adopted when valuing Crown, combined and magistrates’ courts.
When applying the contractor’s basis the guidance given in Rating Manual applicable to the Rating List for which the valuation is being undertaken is to be followed. The rentals method should be adopted when valuing county courts.
Valuations undertaken using the contractor’s basis should be entered onto the Non-Bulk Server (NBS) (class - courts (Contractors) (Scat 414)).
Valuations undertaken using the rentals method are to be carried out on the Rating Support Application.
Other support available:
Survaid Class Co-ordination team
1. Market Appraisal
1.1 HM Courts & Tribunals Service is an agency of the Ministry of Justice. It is responsible for the administration of the criminal, civil and family courts and tribunals in England and Wales. It operates as a partnership between the Lord Chancellor, the Lord Chief Justice and the Senior President of Tribunals.
1.2 The Service currently operates courts and tribunal centres. The estate is made up of a varied mix of buildings inherited when the organisation was formed in 2011 following the merger of HM Courts Service and the Tribunals Service. The nature and quality of the accommodation it occupies ranges from historic listed buildings to new builds completed to a very high standard.
1.3 The increased use of technology, changes to working practices and the Court Estate Reform running since 2016 has seen the size of the estate reduce. There is acknowledgement that there was a need to invest and modernise the estate, make better use of its buildings and reduce the ongoing costs of maintenance. Further changes to the estate are expected.
2. Changes from the 2017 Practice Note
2.1 There are no significant changes to the 2017 PN.
3. Ratepayer Discussions
3.1 There have been no 2017 List discussions on this class of property.
4. Valuation Scheme
4.1 The accommodation found within a County Court is little different to that found within a standard office property.
4.2 The recommended approach is to value / treat County Courts as offices and adopt a price per square metre net internal area which reflects the location and physical characteristics of the property. The value to be adopted should be derived from an analysis of all the available rental evidence in the locality.
1. Market appraisal
HM Courts and Tribunals Service is an agency of the Ministry of Justice. It is responsible for the administration of the criminal, civil and family courts and tribunals in England and Wales. It operates as a partnership between the Lord Chancellor, the Lord Chief Justice and the Senior President of Tribunals.
In 2015 the Service operated around 460 courts and tribunal centres at a reputed cost of £500 million per annum. The estate is made up of a varied mix of buildings inherited when the organisation was formed in 2011 following the merger of HM Courts Service and the Tribunals Service. The nature and quality of the accommodation it occupies ranges from historic listed buildings to new builds completed to a very high standard.
The increased use of technology, changes to working practices and the Court Estate Reform programme of rationalisation which ran from 2010 to 2014 has seen the size of the estate reduce significantly since 2010.
In March 2014, the Lord Chancellor, the Lord Chief Justice of England and Wales and the Senior President of Tribunals announced details of a programme of reform for the courts and tribunals. HM Treasury agreed to a 5 year investment programme totaling £375 million to enable HMCTS to undergo a Reform Programme designed to deliver “through the use of modern technology, an improved estate and modernisation of current working practices, a more effective, efficient and high performing courts and tribunals administration”.
The joint statement acknowledged that there was a need to invest and modernise the estate, make better use of its buildings and reduce the ongoing costs of maintenance.
Consultation on the provision of the court and tribunal estate in England and Wales took place in 2015. This consultation put forward proposals that aimed to reduce surplus capacity by closing those courts and tribunals that were unused or underused, or that are simply unsuitable for the services that need to be provided from them.
2. Changes from the 2017 practice note
The contractor’s approach remains broadly the same as the 2017 Memorandum of Agreement with updated Stage 1 costs, Stage 2 allowances and Stage 3 land values.
3. Ratepayer discussions
No discussions have so far been held either with ratepayers or their representatives. This Practice Note applies to all purpose built courts in England and Wales for the 2023 rating list with the exception of three prestigious courts listed below. The Supreme Court; The Central Criminal Court (Old Bailey); and The Royal Courts of Justice may require bespoke consideration for valuation purposes.
4. Valuation scheme
The contractor’s basis is to be applied in accordance with Rating Manual section 4 part 3 using the guidance below in relation to each stage of the valuation process.
4.1 Stage 1 - estimated replacement cost
- Building Costs
With the exception of areas that are not used at the AVD and have no prospect of being used, the actual GIA of the courthouse should be used to calculate the Estimated Replacement Cost (Stage 1) of the hereditament.
The cost of the modern substitute courthouse should be used in all circumstances and has been determined at £3163/m2. (Cost Guide reference 61K00U)
Typically the modern substitute will have the following characteristics:
Multi-storey building containing criminal courtrooms (crown or magistrates), and/or civil or tribunal hearing rooms, judges chambers, public waiting areas, interview rooms, administration offices, ancillary space, van dock and custody suite. A steel framed building enclosed with a mixture of facing brick, render, curtain walling and metal cladding walls and a flat roof incorporating an atrium or roof lights. Internally, the building comprises plastered, tiled and panelled wall finishes, suspended ceilings, raised flooring, fitted furniture, sanitary ware, central heating, air conditioning, electric lighting and power, lifts, alarms, data installation, public address, CCTV and security systems.
Plant Rooms - Where plant rooms are excessive, consideration should be given to the exclusion of the excess gross internal area from the valuation. Such an approach will only be appropriate where it is clear that the excess floor space is surplus to the current requirements.
For the avoidance of doubt plant rooms that form part of the original design and integral to the court building should be costed at the full rate.
The cost of basement car parking is £975/m2.
- External Works
The cost of external works is to be added in accordance with the following table.
| Description | Percentage addition |
| 1 | City or town centre or island site typically with 90% or greater building ratio, external lighting, limited parking for judges and magistrates with some secure boundary fencing. No landscaping. | 5% |
| 2 | As 1 above, but typically with an 80% to 90% building ratio and some landscaping around buildings. | 7.5% |
| 3 | As 1 above, but typically with 75% building ratio or less, some landscaping around buildings and parking for judges, magistrates and staff within the hereditament. | 10% |
| 4 | As 3 above, but typically with extensive landscaping around buildings and parking for judges, magistrates, staff and public within the hereditament. Care should be exercised to ensure that any such car parking is not separately assessed. | 12.5% |
Additional notes
There may be some instances where a hereditament occupies an island site and has no tangible land outside of the building footprint. In such circumstances a minimum 2.5% external works addition should be made.
- Location Factors
Location factors should be applied in accordance with Appendix A replicated from the 2023 VOA Cost Guide.
- Contract Size Adjustment
The adjustment for contract size should be made having regard to the total ERC (after adjustment for location but before the addition for fees) in accordance with the following scales:-
| ERC £ | % Adjustment |
|---|---|
| Up to 0.25 million | + 10% max |
| 0.5 million | 8% |
| 0.75 million | 6% |
| 1.0 million | 4% |
| 1.5 million | 3% |
| 2.0 million | 2% |
| 3.0 million | 1% |
| 4.0 million | 0% |
| 5.0 million | -0.5% |
| 6.0 million | -1% |
| 8.0 million | -1.5% |
| 10.0 million | -2% |
| 15.0 million | -3% |
| 18.0 million | -4% |
| 20.0 million | -5% |
| 25.0 million | -6% |
| 35.0 million | -9% |
| Over 40.0 million | - 10% MAX |
| NB. Intermediate figures may be interpolated. |
- Professional Fees
Fees should be added at the percentages shown in the VOA published Cost Guide at Section 7. For convenience these are shown below inclusive of the 2% complexity addition. Note that minimum fees may apply to counter inversion.
Professional Fees and charges
| Size of Contract | % Adjustment |
|---|---|
| Sums up to £750,000 | 14% |
| £750,000 to £1,499,000 | 13.5% |
| £1,500,000 to £3,999,999 | 11.5% |
| £4,000,000 to £7,499,999 | 10.5% |
| £7,500,000 to £14,999,999 | 9.5% |
| Over £15,000,000 | 9% |
4.2 Stage 2
Adjustments to the court buildings for age and obsolescence should be made in accordance with Appendix B and take into account the following salient points;
a) The revised age and obsolescence scale represents the combined age related physical depreciation along with functional obsolescence and technological redundancy exhibited by buildings of each age typical for their quality/specification and condition. It is anticipated that the stated allowances will be adopted in the majority of cases and only either moderated or increased in exceptional circumstances.
b) Extensions are to be given an allowance appropriate to their age unless of a lower specification than would be expected of a building of that age in which case the allowance should be increased to a level appropriate to reflect the specification of the building as a whole.
c) In respect of physical depreciation, the above scales are intended to reflect normal wear and tear and/or deterioration due to the age of the building. The scales assume an average degree of cyclical refurbishment work will have been undertaken, to include whole or partial renewal of building sub-components, most particularly relating to mechanical and electrical services and internal fit-out, but also including periodic renewal of roof coverings and windows.
d) It follows from the above that no adjustment away from the scales is required in the majority of cases where older buildings have been subject to modernisation and refurbishment works, as these are explicitly assumed to have occurred. An exception to this would be for a building taken back to shell and reconstructed with significant renewal of structural elements, where an abatement of age-related physical obsolescence may be required.
e) An example of a building requiring an abatement of the allowances provided by the scales (due to the mitigation of physical depreciation) would be where a major renovation has occurred utilising the original building foundations, frame (including upper floors) but with comprehensive replacement of the external envelope (walls, windows), a complete internal refit and wholescale replacement of mechanical and electrical services.
f) Conversely, the above scales will be insufficient to reflect physical obsolescence in cases where buildings are substantially un-modernised and in any case, the scales do not apply in instances where the hereditament is not repairable at reasonable cost and where it falls to be valued rebus sic stantibus.
g) To qualify as a substantially un-modernised building it is expected that the building will predominantly have the following:
- single glazed windows;
- original internal layout;
- original ceiling height, with no suspended ceilings;
- original external walls;
- pre 1980 internal finishes (flooring, ceiling and walls, internal doors and fixtures and fittings).
h) In respect of functional and technological obsolescence, for buildings that remain in operational use, the scales include adjustments to reflect functional and technological deficiencies observable in buildings typical of their original period of construction but taking account of the level of assumed cyclical refurbishment reflected in the physical depreciation element of the scales.
i) The type of functional and technological obsolescence factors already reflected in the scales include the following:
- poor energy efficiency and/or environmental sustainability;
- inappropriate layout inhibiting flexible and efficient space utilization;
- modern health & safety, fire or building regulations that preclude or limit the original purposes of the building;
- dated design practices that restrict modern usage (such as lack of/or minimal floor and ceiling voids);
- the absence of modern space heating or air conditioning systems within a building;
j) It follows that only where buildings display specific functional deficiencies or issues of technological redundancy, that are atypical for their age, consideration should be given to applying an additional allowance.
k) One indicator that additional functional obsolescence is present such that the allowance provided by the scales should be adjusted is the presence of new and/or replacement facilities making the existing building surplus. Such replacement or other material redundancy should be considered and may result in the total redundancy of the pre-existing building, i.e. 100% obsolescence.
For the avoidance of doubt the age of the building should be taken as the date the building was completed.
Multi-floor allowances will not normally be applicable as the assumption is that there will be adequate lift provision. Where, exceptionally, lifts are inadequate to serve the actual use an allowance may be warranted. This must be justified according to the actual facts of each particular case.
4.3 Stage 3 - land value
Land values should be arrived at having regard to values prevailing in the locality in accordance with Rating Manual section 4 part 3 and the R2023 Land Value Practice Note. Land values should be adopted in line with the ‘residential central fringe area’ values provided for sample towns and cities within each region. Valuer judgement should be exercised for those localities not stated.
The weighted average obsolescence allowance applied to all the buildings (the “Ebdon allowance”) should normally be applied to the land value but see Rating Manual section 4 part 3 for advice.
4.4 Stage 4 - decapitalisation rate
The higher statutory de-capitalisation rate for England or Wales as appropriate should be applied to the Effective Capital Value (ECV) to arrive at an annual equivalent.
4.5 Stage 5 - end adjustments
Any advantage or disadvantage which might affect the value of the occupation of the hereditament as a whole should be reflected at this last stage. An adjustment under this head should not duplicate adjustments made elsewhere. Most hereditaments will not warrant further allowances at this stage and where allowances are appropriate, it is expected that they should not normally exceed 10%.
Appendix A
Location factors
N.B. The Regions referred to are administrative areas and are not significant boundaries
| NORTH EAST REGION | NORTH WEST REGION | |||
|---|---|---|---|---|
| Durham County | 0.91 | Cheshire | 0.97 | |
| Northumberland | 0.95 | Greater Manchester | 0.97 | |
| Tees Valley | 0.94 | Lancashire | 0.97 | |
| Tyne and Wear | 0.91 | Merseyside | 0.97 | |
| Cumbria | 0.98 |
| YORKSHIRE and HUMBERSIDE REGION | SOUTH WESTERN REGION | |||
|---|---|---|---|---|
| East Riding and North Lincolnshire | 0.92 | Cornwall | 1.05 | |
| North Yorkshire | 0.98 | Devon | 1.01 | |
| South Yorkshire | 0.94 | Dorset | 1.04 | |
| West Yorkshire | 0.92 | Gloucestershire | 1.03 | |
| North Somerset | 1.02 | |||
| Somerset | 1.01 | |||
| Wiltshire | 1.03 |
| EAST MIDLANDS REGION | WEST MIDLANDS REGION | |||
|---|---|---|---|---|
| Derbyshire | 1.05 | Herefordshire | 0.92 | |
| Leicestershire and Rutland | 1.04 | Shropshire | 0.95 | |
| Lincolnshire | 1.03 | Staffordshire | 0.94 | |
| Northamptonshire | 1.09 | Warwickshire | 0.98 | |
| Nottinghamshire | 1.03 | West Midlands | 0.95 | |
| Worcestershire | 0.98 |
| EAST OF ENGLAND REGION | SOUTH EAST REGION (EXCL. LONDON) | |||
|---|---|---|---|---|
| Bedfordshire | 1.04 | Berkshire | 1.08 | |
| Cambridgeshire | 1.00 | Buckinghamshire | 1.07 | |
| Essex | 1.03 | East Sussex | 1.09 | |
| Hertfordshire | 1.07 | Hampshire | 1.05 | |
| Norfolk | 0.96 | Isle of Wight | 1.05 | |
| Suffolk | 0.97 | Kent | 1.09 | |
| Oxfordshire | 1.04 | |||
| Surrey | 1.13 | |||
| West Sussex | 1.08 |
| SOUTH EAST REGION (EXCL. LONDON) | ||||
|---|---|---|---|---|
| WALES | CENTRAL LONDON SOUTH | |||
| North Wales | Lambeth | 1.28 | ||
| Flintshire | 0.89 | Southwark | 1.28 | |
| Conwy | 0.93 | Wandsworth | 1.30 | |
| Denbighshire | 0.90 | |||
| Gwynedd | 0.97 | GREATER LONDON NORTH EAST | ||
| Isle of Anglesey | 0.95 | Hackney | 1.25 | |
| Wrexham | 0.91 | Haringey | 1.31 | |
| Newham | 1.18 | |||
| Mid Wales | Tower Hamlets | 1.26 | ||
| Carmarthenshire | 0.98 | Barking and Dagenham | 1.18 | |
| Ceredigion | 0.99 | Enfield | 1.18 | |
| Powys | 0.97 | Havering | 1.09 | |
| Pembrokeshire | 0.92 | Redbridge | 1.15 | |
| Waltham Forest | 1.18 | |||
| South Wales | GREATER LONDON NORTH WEST | |||
| Blaenau Gwent | 0.96 | Barnet | 1.23 | |
| Bridgend | 0.93 | Brent | 1.22 | |
| Caerphilly | 0.93 | Ealing | 1.27 | |
| Cardiff | 0.94 | Harrow | 1.18 | |
| Monmouthshire | 0.99 | Hillingdon | 1.16 | |
| Neath Port Talbot | 0.88 | Hounslow | 1.16 | |
| Newport | 0.95 | |||
| Rhondda, Cynon, Taff | 0.93 | GREATER LONDON SOUTH EAST | ||
| Swansea | 0.93 | Bexley | 1.25 | |
| Torfaen | 0.91 | Bromley | 1.21 | |
| Vale of Glamorgan | 0.97 | Croydon | 1.24 | |
| Greenwich | 1.24 | |||
| CENTRAL LONDON NORTH | Lewisham | 1.21 | ||
| Camden | 1.32 | |||
| City of London | 1.24 | GREATER LONDON SOUTH WEST | ||
| Hammersmith & Fulham | 1.32 | Kingston Upon Thames | 1.26 | |
| Islington | 1.29 | Merton | 1.24 | |
| Kensington & Chelsea | 1.34 | Richmond Upon Thames | 1.22 | |
| Westminster | 1.30 | Sutton | 1.20 |
Appendix B – Obsolescence scale
| Age | % Obsolescence | Age | % Obsolescence |
|---|---|---|---|
| 2023 | 0.00% | 1986 | 43.75% |
| 2022 | 0.75% | 1985 | 44.50% |
| 2021 | 1.50% | 1984 | 45.00% |
| 2020 | 2.50% | 1983 | 48.00% |
| 2019 | 3.50% | 1982 | 51.00% |
| 2018 | 4.75% | 1981 | 54.00% |
| 2017 | 6.00% | 1980 | 56.75% |
| 2016 | 7.25% | 1979 | 57.25% |
| 2015 | 8.50% | 1978 | 57.50% |
| 2014 | 10.00% | 1977 | 58.00% |
| 2013 | 11.25% | 1976 | 58.25% |
| 2012 | 12.75% | 1975 | 58.50% |
| 2011 | 14.25% | 1974 | 58.50% |
| 2010 | 15.75% | 1973 | 58.75% |
| 2009 | 17.25% | 1972 | 59.00% |
| 2008 | 18.75% | 1971 | 59.00% |
| 2007 | 20.25% | 1970 | 59.25% |
| 2006 | 21.75% | 1969 | 59.25% |
| 2005 | 23.25% | 1968 | 60.00% |
| 2004 | 24.50% | 1967 | 60.00% |
| 2003 | 26.00% | 1966 | 60.00% |
| 2002 | 27.50% | 1965 | 60.00% |
| 2001 | 28.75% | 1964 | 60.00% |
| 2000 | 30.00% | 1963 | 60.00% |
| 1999 | 31.25% | 1962 | 60.00% |
| 1998 | 32.50% | 1961 | 60.00% |
| 1997 | 33.75% | 1960 | 60.00% |
| 1996 | 35.00% | 1959 | 57.50% |
| 1995 | 36.00% | 1958 | 55.00% |
| 1994 | 37.00% | 1957 | 55.00% |
| 1993 | 38.00% | 1956 | 55.00% |
| 1992 | 39.00% | 1955 | 55% |
| 1991 | 40.00% | 1954 | 55% |
| 1990 | 40.75% | 1953 and earlier | 55% |
| 1989 | 41.50% | ||
| 1988 | 42.25% | ||
| 1987 | 43.00% |
1. Market appraisal
HM Courts and Tribunals Service is an agency of the Ministry of Justice. It is responsible for the administration of the criminal, civil and family courts and tribunals in England and Wales. It operates as a partnership between the Lord Chancellor, the Lord Chief Justice and the Senior President of Tribunals.
The Service currently operates 460 courts and tribunal centres at a reputed cost of £500 million per annum. The estate is made up of a varied mix of buildings inherited when the organisation was formed in 2011 following the merger of HM Courts Service and the Tribunals Service. The nature and quality of the accommodation it occupies ranges from historic listed buildings to new builds completed to a very high standard.
The increased use of technology, changes to working practices and the Court Estate Reform programme of rationalisation which ran from 2010 to 2014 has seen the size of the estate reduce significantly since 2010.
In March 2014, the Lord Chancellor, the Lord Chief Justice of England and Wales and the Senior President of Tribunals announced details of a programme of reform for the courts and tribunals. HM Treasury has agreed to a 5 year investment programme totalling £375 million which will enable HMCTS to undergo a Reform Programme designed to deliver “ through the use of modern technology, an improved estate and modernisation of current working practices, a more effective, efficient and high performing courts and tribunals administration”.
The joint statement acknowledged that there is a need to invest and modernise the estate, make better use of its buildings and reduce the on-going costs of maintenance.
Consultation on the provision of the court and tribunal estate in England and Wales began on 16 July 2015 and is due to end on 8 October 2015. This consultation puts forward proposals that aim to reduce surplus capacity by closing those courts and tribunals that are unused or underused, or that are simply unsuitable for the services that need to be provided from them.
2. Changes from the 2010 practice note
There are no changes from the approach that was adopted for the 2010 Rating List.
3. Ratepayer discussions
There have been no 2017 List discussions on this class of property.
4. Valuation scheme
The accommodation found within a County Court is little different to that found within a standard office property.
The recommended approach is to value / treat County Courts as offices and adopt a price per square metre NIA which reflects the location and physical characteristics of the property. The value to be adopted should be derived from an analysis of all the available rental evidence in the locality.
1. Market appraisal
HM Courts and Tribunals Service is an agency of the Ministry of Justice. It is responsible for the administration of the criminal, civil and family courts and tribunals in England and Wales. It operates as a partnership between the Lord Chancellor, the Lord Chief Justice and the Senior President of Tribunals.
In 2015 the Service operated around 460 courts and tribunal centres at a reputed cost of £500 million per annum. The estate is made up of a varied mix of buildings inherited when the organisation was formed in 2011 following the merger of HM Courts Service and the Tribunals Service. The nature and quality of the accommodation it occupies ranges from historic listed buildings to new builds completed to a very high standard.
The increased use of technology, changes to working practices and the Court Estate Reform programme of rationalisation which ran from 2010 to 2014 has seen the size of the estate reduce significantly since 2010. In March 2014, the Lord Chancellor, the Lord Chief Justice of England and Wales and the Senior President of Tribunals announced details of a programme of reform for the courts and tribunals. HM Treasury agreed to a 5 year investment programme totalling £375 million to enable HMCTS to undergo a Reform Programme designed to deliver “through the use of modern technology, an improved estate and modernisation of current working practices, a more effective, efficient and high performing courts and tribunals administration”.
The joint statement acknowledged that there was a need to invest and modernise the estate, make better use of its buildings and reduce the ongoing costs of maintenance.
Consultation on the provision of the court and tribunal estate in England and Wales took place in 2015. This consultation put forward proposals that aimed to reduce surplus capacity by closing those courts and tribunals that were unused or underused, or that are simply unsuitable for the services that need to be provided from them.
2. Changes from the 2010 practice note
This Practice Note introduces a change to the approach to the application of the contractor’s basis as compared to that adopted for the 2010 List. It is the modern equivalent of a comparable sized courthouse to that being assessed which is to be costed at stage 1 rather than (as in previous lists) the hereditament itself.
The Stage 2 Obsolescence allowances and accompanying guidance notes for court buildings have been revised.
3. Ratepayer discussions
Full discussions have taken place with Ministry of Justice representatives Avison Young as part of the Group Pre Challenge Review (GPCR) 34141441in respect of the sui-generis courts valued on the contractor’s basis. This Memorandum of Agreement applies to all purpose built courts in England and Wales for the 2017 rating list with the exception of three prestigious courts listed below. The Supreme Court; The Central Criminal Court (Old Bailey); and The Royal Courts of Justice may require bespoke consideration for valuation purposes.
4. Valuation scheme
The contractor’s basis is to be applied in accordance with Rating Manual section 4 part 3 using the guidance below in relation to each stage of the valuation process.
4.1 Stage 1 - estimated replacement cost
Building costs
With the exception of areas that are not used at the AVD and have no prospect of being used, the actual GIA of the courthouse should be used to calculate the Estimated Replacement Cost (Stage 1) of the hereditament. The cost of the modern substitute courthouse should be used in all circumstances and has been determined at £2500/m2. (Cost Guide reference 61K00U)
Typically the modern substitute will have the following characteristics:
Multi-storey building containing criminal courtrooms (crown or magistrates), and/or civil or tribunal hearing rooms, judges chambers, public waiting areas, interview rooms, administration offices, ancillary space, van dock and custody suite. A steel framed building enclosed with a mixture of facing brick, render, curtain walling and metal cladding walls and a flat roof incorporating an atrium or roof lights. Internally, the building comprises plastered, tiled and panelled wall finishes, suspended ceilings, raised flooring, fitted furniture, sanitary ware, central heating, air conditioning, electric lighting and power, lifts, alarms, data installation, public address, CCTV and security systems.
Plant Rooms - Where plant rooms are excessive, consideration should be given to the exclusion of the excess GIA from the valuation. Such an approach will only be appropriate where it is clear that the excess floor space is surplus to the current requirements.
For the avoidance of doubt plant rooms that form part of the original design and integral to the court building should be costed at the full rate.
The cost of basement car parking is £786/m2.
External works
The cost of external works is to be added in accordance with the following table.
Additional notes:
There may be some instances where a hereditament occupies an island site and has no tangible land outside of the building footprint. In such circumstances a minimum 2.5% external works addition should be made.
Location factors
Location factors should be applied in accordance with Appendix A replicated from the 2017 VOA Cost Guide.
Contract size adjustments
The adjustment for contract size should be made having regard to the total ERC (after adjustment for location but before the addition for fees) in accordance with the following scales:-
Professional fees and charges
Professional fees should be added in accordance with the following table based on the total estimated replacement cost after adjustment for site works, location factor and contract size. Note that minimum fees are applied between bands.
4.2 Stage 2
Adjustments to the court buildings for age and obsolescence should be made in accordance with Appendix B and take into account the following salient points;
a) The revised age and obsolescence scale has been agreed to represent the combined age related physical depreciation along with functional obsolescence and technological redundancy exhibited by buildings of each age typical for their quality/specification and condition. It is anticipated that the stated allowances will be adopted in the majority of cases and only either moderated or increased in exceptional circumstances.
b) Extensions are to be given an allowance appropriate to their age unless of a lower specification than would be expected of a building of that age in which case the allowance should be increased to a level appropriate to reflect the specification of the building as a whole.
c) In respect of physical depreciation, the above scales are intended to reflect normal wear and tear and/or deterioration due to the age of the building. The scales assume an average degree of cyclical refurbishment work will have been undertaken, to include whole or partial renewal of building sub-components, most particularly relating to mechanical and electrical services and internal fit-out, but also including periodic renewal of roof coverings and windows.
d) It follows from the above that no adjustment away from the scales is required in the majority of cases where older buildings have been subject to modernisation and refurbishment works, as these are explicitly assumed to have occurred. An exception to this would be for a building taken back to shell and reconstructed with significant renewal of structural elements, where an abatement of age-related physical obsolescence may be required.
e) An example of a building requiring an abatement of the allowances provided by the scales (due to the mitigation of physical depreciation) would be where a major renovation has occurred utilising the original building foundations, frame (including upper floors) but with comprehensive replacement of the external envelope (walls, windows), a complete internal refit and wholescale replacement of mechanical and electrical services.
f) Conversely, the above scales will be insufficient to reflect physical obsolescence in cases where buildings are substantially un-modernised and in any case, the scales do not apply in instances where the hereditament is not repairable at reasonable cost and where it falls to be valued rebus sic stantibus.
g) To qualify as a substantially un-modernised building it is expected that the building will predominantly have the following:
- single glazed windows
- original internal layout
- original ceiling height, with no suspended ceilings
- original external walls;
- pre 1980 internal finishes (flooring, ceiling and walls, internal doors and fixtures and fittings)
h) In respect of functional and technological obsolescence, for buildings that remain in operational use, the scales include adjustments to reflect functional and technological deficiencies observable in buildings typical of their original period of construction but taking account of the level of assumed cyclical refurbishment reflected in the physical depreciation element of the scales.
i) The type of functional and technological obsolescence factors already reflected in the scales include the following:
- poor energy efficiency and/or environmental sustainability
- inappropriate layout inhibiting flexible and efficient space utilization
- modern health & safety, fire or building regulations that preclude or limit the original purposes of the building
- dated design practices that restrict modern usage (such as lack of/or minimal floor and ceiling voids)
- the absence of modern space heating or air conditioning systems within a building
j) It follows that only where buildings display specific functional deficiencies or issues of technological redundancy, that are atypical for their age, consideration should be given to applying an additional allowance.
k) One indicator that additional functional obsolescence is present such that the allowance provided by the scales should be adjusted is the presence of new and/or replacement facilities making the existing building surplus.
Such replacement or other material redundancy should be considered and may result in the total redundancy of the pre-existing building, i.e. 100% obsolescence.
For the avoidance of doubt the age of the building should be taken as the date the building was completed. Multi-floor allowances will not normally be applicable as the assumption is that there will be adequate lift provision. Where, exceptionally, lifts are inadequate to serve the actual use an allowance may be warranted. This must be justified according to the actual facts of each particular case.
4.3 Stage 3 - land value
Land values should be arrived at having regard to values prevailing in the locality in accordance with Rating Manual section 4 part 3.
The weighted average obsolescence allowance applied to all the buildings (the “Ebdon allowance”) should normally be applied to the land value, but see Rating Manual section 4 part 3 for advice.
4.4 Stage 4 - de-capitalisation rate
The higher statutory de-capitalisation rate for England or Wales as appropriate should be applied to the Effective Capital Value (ECV) to arrive at an annual equivalent.
4.5 Stage 5 - end adjustments
Any advantage or disadvantage which might affect the value of the occupation of the hereditament as a whole should be reflected at this last stage. An adjustment under this head should not duplicate adjustments made elsewhere. Most hereditaments will not warrant further allowances at this stage and where allowances are appropriate, it is expected that they should not normally exceed 10%.
Appendix A - Location factors
N.B. The Regions referred to are administrative areas and are not significant boundaries.
Appendix B - Obsolescence scale
1.0 Preamble
This Memorandum provides guidance on the valuation for rating purposes in the circumstances where it is appropriate to adopt the Contractor’s Basis of valuation for Criminal Courts.
It has been drawn up with reference to current legislation and relevant case law.
The Memorandum has been accepted by the Chief Executive of the Valuation Office Agency and GVA as representatives of Her Majesty’s Courts and Tribunals Service.
2.0 Her Majesty’s Courts and tribunals service
A Government White Paper ‘Justice for All’, published in 2002, recommended that instead of the Magistrates’ Courts Service and Court Service being administered separately, a single agency should be developed, supporting the delivery of justice in all courts in England and Wales.
The Courts Act 2003 provided the legal framework that enabled the changes to be made.
The Unified Courts Administration Programme was set up to create the new agency and on 1st April 2005 H.M. Courts Service was launched.
On 1 April 2011 Her Majesty’s Courts & Tribunals Service was created. This brings together HM Courts Service & Tribunals Service into one integrated agency providing support for the administration of justice in courts and tribunals.
H.M. Courts & Tribunals Service is an agency of the Ministry of Justice. It uniquely operates as a partnership between the Lord Chancellor, the Lord Chief Justice and the Senior President of Tribunals.
3.0 Approach to valuation
Criminal Courts are generally housed in purpose-built and specialised courthouses and as such are considered sui generis.
They should be valued using the Contractor’s Basis of valuation with the Specialist Rating Teams having full responsibility.
All Crown and Combined Courts in England and Wales are dealt with by one Specialist Caseworker - D.A.Knott (Specialist Rating Team NDR NW) – who is also the Lead Specialist in respect of Magistrates Courts.
This property is valued using the non-bulk server. The manual can be accessed here.
4.0 Basis of measurement
Cost information has been derived from a Gross Internal Area (GIA) basis.
The definition of GIA should be as provided in the RICS Code of Measuring Practice.
HMCTS provides CAD (Computer Aided Design) drawings for all locations.
5.0 The contractor’s basis
5.1 Stage 1
5.1.1 Estimated replacement cost
HMCTS have been provided with Asset Valuation & Estate Terrier reports by the Valuation Office Agency. CAD drawings and GIA figures have been provided by the clients, incorporated into these reports and subsequently accepted. It is recommended, therefore, that unless specific errors are properly identified, these areas are adopted to calculate the Estimated Replacement Cost (ERC) of the building.
The following costs should be adopted:-
Age |
Build Cost per m2 GIA |
Remarks |
Pre – 1950 |
£1,470 |
Includes the old Assize Courts |
1950 – 1964 |
£1,559 |
|
1965 – 1974 |
£1,647 |
|
1975 – 1984 |
£1,765 |
Beginning of major development programme |
1985 – 1995 |
£1,882 |
60% of Crown Courts built 1980 – 2003 |
1996 – 2010 |
£2,000 |
Lord Chancellors Dept. takes over sponsorship of all Courts |
Post 2010 |
To be individually costed |
Only in circumstances where fully analysed and adjusted costs are available and the costs of all non-rateable elements can be properly deducted should the actual adjusted cost be adopted. In the absence of such information the £2,000/m2 cost should be applied. |
Notes
The above costs relate to a well-designed and constructed Court building commensurate with its age.
For buildings which are of an inferior standard of construction and/or design to that which would typically be expected for the period, it may be necessary to make some adjustments to the costs shown in the table. This will, however, be subject to a minimum of £1,470/m2. Such adjustments may be of particular relevance to Magistrates Courts where there were wide variations in the quality of construction prior to the centralisation of development resourcing from 1996.
Courts which have undergone extensive modernisation to such an extent that the building is now wholly different from that originally constructed, should be treated as having a build date at an intermediate point between the date of original construction and the date of modernisation, having regard to the quality of the scheme. The cost adopted will however, be subject to a maximum of £2,000/m2.
Generally, where plant rooms or other ancillary areas are located within the main envelope of the courthouse they will be included in the GIA and should be valued in accordance with the table of costs above. However, where the plant rooms and ancillary areas are excessive as a proportion of the total GIA of the main building or incorporate significant internal car parking or separate rooftop or external buildings, consideration should be given to adopting a lower build cost rate for these areas commensurate with the quality of construction and finish. This should not be less than 50% of the appropriate build cost rate adopted for the Courthouse itself, unless the construction is of a wholly inferior standard.
5.1.2 External works
The external works element of the ERC should be calculated with regard to the 2010 Cost Guide.
Where file records are insufficient to enable individual elements of external works to be costed, a percentage addition is recommended.
The range of additions will be between 2.5% and 7.5%. It is expected that 5% will be the benchmark
5.1.3 Contract size adjustment
The aggregates of locationally adjusted building costs and external works costs are subject to a contract size adjustment. The appropriate levels of adjustment are set out in the Cost Guide.
5.1.4 Professional fees
Crown Courts and the more significant Magistrates Courts are complex in design and are usually highly serviced. As a result, fees tend to be at the higher end of the range when compared with other classes of property valued by the Contractor’s Basis.
The normal addition for fees will be 15%. An addition of 12.5% will be appropriate for Courts of a more basic design including many of the standard Magistrates Courts and up to 17.5% may be applied to the most complex buildings.
5.2 Stage 2
5.2.1 Physical and functional obsolescence
The age-related allowance scale shown below should be considered in the first instance. The age of the building should be taken as one year before its opening.
Year of Building Completion |
% Allowance |
Year of Building Completion |
% Allowance |
2010 |
0 |
1984 |
21 |
2009 |
0.5 |
1983 |
22 |
2008 |
1 |
1982 |
23 |
2007 |
1.5 |
1981 |
24 |
2006 |
2 |
1980 |
25 |
2005 |
2.5 |
1979 |
26 |
2004 |
3 |
1978 |
27 |
2003 |
3.5 |
1977 |
28 |
2002 |
4 |
1976 |
29 |
2001 |
4.5 |
1975 |
30 |
2000 |
5 |
1974 |
31 |
1999 |
6 |
1973 |
32 |
1998 |
7 |
1972 |
33 |
1997 |
8 |
1971 |
34 |
1996 |
9 |
1970 |
35 |
1995 |
10 |
1969 |
36 |
1994 |
11 |
1968 |
37 |
1993 |
12 |
1967 |
38 |
1992 |
13 |
1966 |
39 |
1991 |
14 |
1965 |
40 |
1990 |
15 |
1964 |
41 |
1989 |
16 |
1963 |
42 |
1988 |
17 |
1962 |
43 |
1987 |
18 |
1961 |
44 |
1986 |
19 |
1960 |
45 |
1985 |
20 |
Pre 1960 |
45-50 |
Since most Court buildings have traditionally been subject to high standards of repair and programmed maintenance, physical obsolescence should be carefully considered having regard to these programmes and their actual implementation. In recent years, cuts in funding have caused slippage in many of these programmes which may have led to value significant issues in some cases.
Functional obsolescence in most modern Crown Courts tends to be limited although some Courts may not now conform to the current Design Guide in relation to their layout and the movement of Defendants, members of the public, Jurors and the Judiciary.
The design and quality of Magistrates Courts is more likely to vary, particularly for those constructed prior to HMCS taking over the sponsorship role for Magistrates Court development in the mid 1990’s. Accordingly, further allowances for functional obsolescence may be applicable to Magistrates Courts buildings. However, any adjustments in this respect should not duplicate those under 5.1.1.
For those buildings which have been extensively rebuilt/modernised a standard age related allowance may not be appropriate. In such cases, an intermediate level of allowance can be adopted between that of the original construction date and the date of modernisation. However, once again any adjustments made must not duplicate those made under 5.1.1.
5.2.2 Multi-floor allowances
Multi-floor allowances will not normally be applicable as the assumption is that there will be adequate lift provision. Where, exceptionally, lifts are inadequate to serve the actual use an allowance may be warranted. This must be justified according to the actual facts of each particular case. Allowances made under this heading should not duplicate adjustments made under 5.1.1.or 5.5.
5.3 Stage 3
Land value should be arrived at by having regard to values prevailing in the locality, in accordance with Rating Manual section 4 part 3.
Most main Courts are well located within a town or city centre and it would be reasonable to assume a similar location at AVD. However, where values have shifted through redevelopment, some downward adjustment of peak values may be necessary.
The Asset Valuation & Estate Terrier reports give details of the Total Site Area and Building Footprint Area. The Worth in Existing Use: Land Value will provide a useful opinion of value, subject to the need to adjust for the difference in valuation dates. The maximum land addition should not exceed 30% of the adjusted ARC.
Where the site is considered to be excessive in size, then reasonable assumptions should be made to arrive at an appropriate substitute. Where the site is restricted in size the actual area should be valued.
5.4 Stage 4
The Adjusted Replacement Cost (ARC) of the hereditament shall be decapitalised to an annual equivalent by taking the prescribed rate.
5.5 Stage 5
Any advantage or disadvantage which might affect the value of the occupation of the hereditament as a whole should be reflected at this last stage. An adjustment under this head should not duplicate adjustments made elsewhere. Most buildings will not warrant further allowances at this stage and where allowances are appropriate, it is expected that they should not normally exceed 10% although it is recognised that there might be exceptional circumstances where this could be justified
Enquiries
Enquiries about this Memorandum to Lead Specialist - D.A.Knott (Specialist Rating Team NDR NW – 07931 592758)