Section 370: educational hereditaments
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
1. Educational Hereditaments
Educational Hereditaments defined in The Non Domestic Rating (Miscellaneous Provisions) (No. 2) Regulations (SI 1989/2303) when valued on the Contractor’s Basis are subject to a decapitalisation rate of 4%.
Premises constructed and adapted for use for the purposes of the following institutions and wholly or mainly so used are educational hereditaments:-
a. schools (see para 2.1 below)
b. universities (see para 3 below)
c. qualifying institutions providing further or higher education (see para 4 below).
2.1 Schools within the definition of ‘educational hereditament’ for which a decapitalisation rate of 4% is prescribed consist of institutions for providing primary or secondary education, or other primary and secondary education. For this purpose “primary education” includes nursery education and education of junior pupils up to the age of 12, and “secondary education” refers to full-time education of senior pupils, ie over 12 but less than 19 years old. Institutions providing further education to persons over compulsory school age are excluded from the definition of “school” for this purpose.
2.2 Schools within the above definition may fall into the following categories:
a. County schools, ie those provided and maintained by Local Education Authorities whether County Councils, Metropolitan Boroughs or London Boroughs.
b. Voluntary schools, ie those provided by other bodies, usually churches, but maintained by Local Education Authorities.
c. Grant-maintained schools, ie those maintained by grant provided directly by the Secretary of State.
d. Independent schools, ie any school providing full-time education for five or more pupils of compulsory school age not falling within categories (a)-(c) above.
Institutions with the definition of ‘educational hereditament’ include universities, university colleges, and any institution in the nature of a college in a university.
4. Qualifying Institutions Providing Further or Higher Education
4.1 For the purposes of this definition “further education” consists of full-time or part time education (including vocational, social, physical and recreational training) and organised leisure-time occupation provided in connection with the provision of such education, for persons over compulsory school age.
4.2 For the purposes of this definition “higher education” consists of education provided by any of the following courses:
a. a course for the further training of teachers or youth and community workers
b. a post-graduate course (including a higher degree course)
c. a first degree course
d. a course for the Diploma of Higher Education
e. a course for the Higher National Diploma or Higher National Certificate of the Business & Technician Education Council, or the Diploma in Management Studies
f. a course for the Certificate in Education
g. a course in preparation for a professional examination at a higher level (ie above the standard of ‘A’ Level, or the National Diploma of the Business & Technician Education Council)
h. a course providing education at a higher level (see (g) above for definition of “higher level”), whether or not in preparation for an examination.
4.3 Institutions providing “further” or “higher” education as defined in paras 4.1 and 4.2 above will qualify as “educational hereditaments” for which a 4% decapitalisation rate is prescribed only if falling into one of the following categories.
a. if maintained by a local education authority
b. if designated by or under regulations under s.218 Education Reform Act 1988 as substantially dependent for its maintenance on assistance from local education authorities or on grants from the Secretary of State
c. if treated by s.132(6) Education Reform Act 1988 as within the Polytechnics and Colleges Funding Council funding sector
d. if provided or maintained for further or higher education by a body not established for profit.
5.1 No particular method of valuation is prescribed for the various types of educational establishment. But in the case of local authority schools, universities and polytechnics, schemes of valuation have been devised, on the Contractor’s Basis. A similar scheme has been devised for public and independent schools, but it does not preclude the rental/comparative method where evidence exists. The prescription of a 4% decapitalisation rate in SI 1989/2303 for educational hereditaments asdefined in paras 1-4 above should not be regarded as a rule of law requiring use of the contractor’s basis. The absence of rental/comparative evidence will however in most cases lead to reliance on the contractor’s basis. Hereditaments comprising educational establishments which are not ‘educational hereditaments’ as defined must be subject to a decapitalisation rate of 6% when valued on the Contractors Basis.
5.2 For guidance on the valuation of various types of educational establishment, see the following sections.
|local authority schools of all types (other than boarding)||Section 590|
|local authority boarding schools||Section 820|
|Foundation schools||Section 590|
|voluntary schools (see local authority schools)|
|independent schools||Section 820|
|public schools||Section 820|
|sixth-form colleges (see colleges of further education)|
|tertiary colleges (see colleges of further education)|
|universities and university colleges and SCOP (Standing Conference of Principles) Colleges||Section 1110|
|Colleges of further education||Section 585|
6. Schools for Special Educational Needs (including LEA Special Schools) - scope for exemption under Sch 5 para 16(1)(a) LGFA 1988
6.1 Statutory Background
6.1.1 Paragraph 16(1)(a) Schedule 5 LGFA 1988 exempts a hereditament to the extent that it consists of property used wholly for the provision of facilities for training, or keeping suitably occupied, persons who are disabled or who are or have been suffering from illness.
6.1.2 Paragraph 16(2) Schedule 5 LGFA 1988 defines a person as “disabled” if he is “blind, deaf or dumb or suffers from mental disorder of any description or is substantially and permanently handicapped by illness, injury, congenital deformity or any other disability for the time being prescribed for the purposes of Section 29(1) of the National Assistance Act 1948”. (It is noted in this connection that nothing further has been prescribed under the 1948 Act - Ryde on Rating and the Community Charge, paragraphs D(806)-(900)).
6.1.3 By virtue of Paragraph 16(3) Schedule 5 LGFA 1988 “illness” has the meaning given by Section 128(1) of the National Health Service Act 1977, ie it “includes mental disorder within the meaning of the Mental Health Act 1983 and any injury or disability requiring medical or dental treatment or nursing”.
6.1.4 “Mental disorder” is defined in MHA 1983 as “mental illness, arrested or incomplete development of the mind, psychopathic disorder and any other disorder or disability of mind”.
6.2 Practical Problems
6.2.1 The case decision in Church of England Children’s Society v Southwark LBC (1982) 22RV R8 and Nottinghamshire County Council v Nottingham City Council (1987) 27RV R82, suggested that the word “training” should be given a wide meaning which would include normal classroom teaching or education. Therefore the main issue for consideration in respect of “special schools” is whether or not the pupils are “disabled or are or have been suffering from illness”.
6.2.2 It is hoped that VOs will be able to decide independently, having viewed the institution, whether any of its pupils are “disabled” within the definition. However, “illness” and in particular “mental disorder” obviously present much greater difficulties.
6.2.3 A “learning difficulty” which calls for special educational provision exists if a child, inter alia, has “ significantly greater difficulty in learning than the majority of children of the same age, or if he has a disability which either prevents or hinders him from making use of educational facilities of a kind generally provided in schools within the area of the local authority concerned, for children of his age”.
6.2.4 Whilst it may well be the case that special schools contain pupils whose “significantly greater difficulty in learning” etc is attributable to some “illness” including some “arrested or incomplete development of the mind, psychopathic disorder and any other disorder or disability of the mind” it may also be that such schools cater for pupils with other learning difficulties which disadvantage them compared to the average child but who could not be said to be suffering from illness.
6.2.5 In determining whether a learning difficulty is attributable to “illness” or to some other cause, the VO will need to consider the maladies from which those pupils must be suffering in order to gain admission. The VOs task must be to elicit sufficient information from the institution and its directors to provide a reliable indication as to whether the pupils are suffering from “illness” including “mental disorder” as explained above.
6.2.6 It is of interest to note that in the “Children’s Society” case referred to at Paragraph 6.2.1 above, the definition of illness contained in S.128(1) of the 1977 Act was applied to a school for maladjusted children whose state of mind “manifested itself by aggressive behaviour, irrational fits of temper, inability to concentrate and petty pilfering”. However, in cases such as this, the crucial point to be established is whether or not the pupils have a maladjusted state of mind. It should be assumed that the patterns of behaviour referred to in the decision lead to such a conclusion without further enquiry along the lines set out in the preceding paragraph.
7. Glossary of terms
7.1 City Technology Colleges
First proposed in 1986, CTCs have a broad curriculum with an emphasis on science and technology. They are attended by 11 to 18 year olds. CTCs are sited in inner city areas. They are intended to be outside the control of local education authorities, operating closely with industrial sponsors. A Board of Governors is in control of day to day issues. No fees are charged to the pupils.
7.2 County Schools
Nursery, primary, middle, secondary or special schools provided and maintained by local education authorities.
7.3 Further Education
See para 4.1. above for definition.
7.4 Grant-Maintained Schools
The Secretary of State is directly responsible for the maintenance of all Grant Maintained Schools. The Education Reform Act 1988 allows LEA schools to apply for Grant Maintained Status and to opt out of if permission is granted. Grant Maintained Status can be applied for, to the Secretary of State, by any school who may wish to appoint recognised governors. (See 53(4) and (5) Education Reform Act 1988) to take over the complete running of the school, in place of the Local Education Authority. The Secretary of State is required to determine the amount of maintenance grant payable to the governing body of a school for any financial year.
7.5 Higher Education
See para 4.2. above for definition.
7.6 Independent Schools
Independent schools receive no state assistance but are financed by fees. They must be registered and open for inspection. Some independent schools are known as public schools - see 7.13. Certain non-maintained schools, including a number in membership of the Headmasters Conference, remit fees for “assisted - place” pupils and are reimbursed by the Secretary of State.
7.7 Local Education Authorities (LEA)
Responsibility for providing education (other than in universities) rests with the Local Education Authorities. These are the elected councils of Counties, Metropolitan Authorities and the London Boroughs. Each authority has a statutory duty to provide an education service under sections 7 and 8 of the Education Act 1944.
7.8 Local Management of Schools (LMS)
Locally selected governing bodies are given delegated powers to manage their school (Section 36 Education Reform Act 1988).
7.9 Middle Schools
LEA maintained and grant maintained schools, catering for children of 8 to 12 or 9 to 13 years of age.
7.10 Nursery Schools
Local Authority, and private establishments, providing pre-school education usually to children of 2 to 5 years old. Although distinguished from primary schools, nursery schools provide primary education as defined in the Education Act 1944.
7.11 Preparatory School
Independent school for children aged 8 to 13.
7.12 Primary School
A school for children of 5 to 12 years of age. It may also be used as a generic term to cover infant, first, junior and middle schools.
7.13 Public Schools
Independent secondary schools usually in membership of the Headmaster’s Conference, the Governing Bodies Association or Governing Bodies of Girls Schools Association. Pupils are usually aged from 11 to 18 years of age.
7.14 Secondary Schools
LEA maintained and grant maintained schools generally catering for the 12 to 18 age groups, although sixth form and tertiary colleges, where they exist, cater for 16 to 18 year olds. Most secondary schools are comprehensives.
7.15 Sixth Form Colleges
Colleges open to 16 to 19 years olds who may transfer from a secondary school. A wide range of GCE courses at advanced level are offered, together with a number of vocational and pre-vocational courses for students of all abilities.
7.16 Special Schools
Special schools, maintained by LEAs, both day and boarding, provide education for pupils with statements of special educational needs (see para 6). From 1984 onwards pupils are no longer analysed by major handicap. Instead, local education authorities are required to assess a child’s particular special educational needs, providing a statement of those needs where necessary. Compulsory attendance at special schools is from 5 to 16 years but in some special schools (including a few for handicapped children of high intellectual ability) children stay longer. Some establishments provide a period of further education, pre-vocational training and assessment for employment.
7.17 Tertiary Colleges
To be treated as Sixth Form Colleges (see para 7.15).
As universities administer themselves according to the terms of their individual charters, their forms of government vary. They are centres of both teaching and research.
The Government, through the University Grants Committee, contributes over 70% towards the current income of universities and approximately 90% towards their capital programmes, the former being allocated from a block grant.
7.19 Voluntary Schools
Schools provided by a voluntary body, usually religious, but maintained by the Local Education Authority.