Rating Manual section 6 part 3: valuation of all property classes

Section 595: town halls and civic centres

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Co-ordination

Town halls and civic centres are not a defined class for co-ordination purposes, and are assigned no special Scat code.

2. Description

Town Halls are generally purpose built and consist largely of municipal offices. They will generally contain a council chamber with a public gallery and sometimes also an Assembly Hall, but unless these features form the major proportion (by area) of the hereditament, the description entered in the Rating List should be “Offices and premises”. Frequently Local Authorities occupy additional office buildings beyond the curtilage of the Town Hall; such hereditaments will be separately assessed as offices and are not covered by this section. Premises which are described as the “Town Hall”, but which in fact consist only of a public hall and ancillary accommodation should be assessed as public halls (see Section 475) and entered in the Rating List with the description “Public Hall and Premises”. Town Halls may also form part of complex “Civic Centres” containing also a museum, art gallery, library, and perhaps a theatre; see Section 5 below for the Units of Assessment in such cases.

3. Survey Requirements

3.1 Basis of Measurement

For all hereditaments containing both offices and a council chamber and/or an assembly hall, measurement should be taken in both Gross Internal Area (GIA) and Net Internal Area (NIA) as defined in the Code of Measuring Practice for Rating Purposes. The GIA and NIA of the council chamber/gallery (and of any other specialised accommodation not normally found within office buildings) should be identified separately.

3.2 Plant and Machinery

This will include heating, air-conditioning/ventilation, fire protection, main switch, and stand-by generating equipment.

4. Basis of Valuation

4.1 Rental/comparison

Rental evidence is likely to be sparse for town halls, since they are invariably owner occupied. Valuation by comparison with other rented or settled assessments may be possible, but only where the town hall is of a size and character likely to be suitable for the requirements of tenants who are active in the office rental market in the locality. If the hereditament is physically distinguishable from normal rented office accommodation in the locality, rents passing may still provide a guide, if discounted to reflect features which impose high running/maintenance costs and which are of no recognised benefit for the local authority as occupier. But where the hereditament includes features for which there would be no demand in the normal office rental market, but which would justify an overbid from the local authority because they meet a recognised functional need, the contractor’s basis may be used either in conjunction with the rental/comparative approach (the “Hybrid Approach” described below), or in substitution.

4.2 Contractor’s Basis

This is the only principal alternative method available. The Stage 1 costs adopted should be those of a modern alternative, stripped of unnecessary ornamentation, and superfluous space. The Stage 3 land value should reflect the area in which the modern alternative might most reasonably be sited. Where the actual hereditament is located in an area of high land value it is necessary to consider whether the occupier gains any advantage from being in that location. In many cases it will be appropriate to conclude that this is so, since alternative location in a less central area may impose access difficulties on both staff and the community in general.

4.3 The “Hybrid Approach”

4.3.1 Many town halls consist largely of offices and are located in towns where there are already other office hereditaments of similar size. In these circumstances the rental comparative approach is of assistance. But most Town Halls contain specialised features not found in rented office buildings:

Council chambers - sometimes purpose built with tiered seating and occasionally ornate design.

Assembly Halls used for election counts, and often available for public hire for social events, charitable fund-raising, and concerts.

Staff facilities which may be considerably more generous than is normally the case in large commercial office buildings, and may include a social club and bar.

4.3.2 It may be possible to value a town hall with some of these features by adopting a hybrid approach, using a rent per sq m drawn from analysis of other rented (or settled) office hereditaments, and adding a contractor’s basis element for certain specialised features not found within the comparables. In the case of council chambers this may be unnecessary where it can be accepted that the modern substitute may involve comparatively slight adaptation of open plan office space. For larger authorities, however, with a need to provide seating for larger numbers, including public galleries, accommodation significantly exceeding the space and specification standards found in the best office boardrooms will be indispensable.

4.3.3 The hybrid approach should only be applied where the specialised features are small in relation to the “office” part of the hereditament. The following working test may be applied; is it conceivable that a rented comparable office hereditament could meet the local authority’s requirements, subject to adaptation/extension to provide the specialised features? If so, the hybrid approach may be used; if not, the contractor’s basis must be applied in the absence of reliable rental/comparable evidence.

5. Unit of Assessment

Civic Centres often incorporate a variety of uses within a single curtilage, (eg offices, council chamber, staff facilities, public hall, library, museum, art gallery, theatre and car park). Operation of these facilities by different departments of the authority does not indicate that they are separate occupations; but in some cases the entirely different nature of the use of parts of the complex will justify separate assessment. For this reason libraries, museums, halls and arts buildings may be treated as separate hereditaments distinct from the office element of the complex, if they are capable of separate occupation. Where a car park which forms part of a civic complex is managed by a commercial operator, it should always be separately assessed if the manager exercises paramount control over its use.

Section: 595 Practice note 1 - 2017

1. Market Appraisal

Since the last revaluation, local authorities have continued to seek cost savings in town hall / civic centre provision.

They have reviewed their staff accommodation with some reducing the amount of local authority office space in their areas.

Schemes have been completed or are being considered to reduce the size of older buildings and utilise the additional site area to house other community based properties such as libraries and medical facilities.

Further, commercial facilities have been included in new-build regeneration projects to release revenue from land previously occupied by larger older civic buildings. Examples include:

  • A £33 million regeneration of Bath & North East Somerset Council’s Civic Centre has replaced 1960s buildings with 68,000 square feet of council offices, a library and 20,000 square feet of retail space yielding extra revenue for the council.

  • In Trowbridge a rationalisation project has seen Wiltshire Council’s 95 offices consolidated into four hubs. This has reduced the council’s office take by 50% and released 59 properties for disposal.

  • Lambeth Council has also formulated plans to reduce town hall accommodation, using the additional area provided to supply space for local enterprise start-ups and affordable housing.

  • Swansea Council has sought bids for its Civic Centre site.

  • In West London, Ealing Council is considering plans to sell its 1930s town hall to provide space for a hotel, restaurant and flats , with considerably reduced space for councillors.

Other ways of utilising existing town hall space to provide additional sources of revenue are being investigated by many local authorities. One manifestation of this is the making available of council meeting rooms and chambers for hire for social events and business conferences.

2. Changes From The Last Practice Note

Where the contractor’s basis is deemed appropriate costs are provided in appendix 1

3. Ratepayer Discussions

No discussions have taken placed between any representative bodies or their agents

4. Valuation Scheme

4.1 Valuation Using Rental Evidence

Where rental evidence of comparable office accommodation is available in the locality it should be applied to value town halls and civic centres which consist predominantly of office accommodation.

The rent per m2 should be applied to the NIA of the property.

In these circumstances (and despite their sometimes ornate nature) Council Chambers should be valued on an office rentals basis - but only it can be demonstrated that office rentals would be paid for town hall and civic centre use (Scottish and Newcastle (Retail) Ltd v Williams (VO) 2000 RA 119)

The weight to be attributed to any rental evidence will depend upon its degree of conformity to the rating hypothesis and its proximity to the AVD.

4.2 Valuation Using the Contractor’s Basis

Where there is no available rental evidence - for example due to the size of the accommodation to be valued - the contractor’s basis should be used

In circumstances where this is deemed appropriate it 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.

The costs shown in this practice note are for ease of reference. In all cases where a cost guide code is shown it is this that which must be input into the NBS template, not the costs shown here. Where the cost guide code shows options, the costs shown in this practice note should be used to aid selection of the cost to be employed to calculate the Effective Replacement Cost (Stage 1)

The GIA of the property should be used to calculate the Effective Replacement Cost.

The costs to be applied are shown in Appendix A.

4.2.1 Contract size

Adjustments should be made in accordance with standard scales in the 2017 Cost Guide.

4.2.2 External Works

The cost of external works to be added in accordance with Appendix B

4.2.3 Location Factor

The appropriate location factor should be applied in accordance with the VOA Cost Guide 2017

4.2.4 Professional Fees

Professional fees and charges are to be added in accordance with the guidance given in the 2017 Cost Guide (See Appendix C below)

4.3Stage 2 – Age and Obsolescence

Adjustments for age and obsolescence should be made in accordance with the scales contained in Rating Manual: section 4 part 3: The Contractor’s Basis of Valuation : R2017 Practice Note: Stage 2 - Age and Obsolescence Allowances. Such allowances are applicable in most circumstances

  • In the case of buildings that have been significantly refurbished a lower allowance than that indicated solely by reference to the building’s age in the scale may be appropriate, particularly where the works undertaken have enabled internal re-modelling to improve the quality, usefulness and/or efficiency of the property.

  • In all cases the actual age of the building is to be recorded for the purposes of determining the appropriate age and obsolescence allowance. When refurbishment has taken place the allowance - and not the building’s age - should be overwritten

The age and obsolescence allowance applied to the buildings should also be applied to the external works (averaged as necessary). The spreadsheet in the Non Bulk server application will automatically do this

4.4 Land Value (Stage 3).

The value of the developed land should be added in accordance with Appendix D

4.5 The Decapitalisation Rate (Stage 4)

The effective capital value (ECV) of the hereditament must be de-capitalised to an annual equivalent by taking the prescribed (higher) rate

4.6 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.

4.7 IT Support

Where the Contractor’s Basis is appropriate the standard generic Contractor’s Spreadsheet held on the Non Bulk Server should be used for all valuations - select “Civic And Public Buildings” from the drop-down menu.

Where the rentals method of valuation is employed, records should be captured and valuations carried out by applying an appropriate scheme using the Rating Support Application (RSA)

Appendix A

Stage One Building Costs

Town Halls Civic Buildings (Non Air Conditioned)

Cost Guide Code ST3042 £1,513 / m2

Care should be taken in valuing particularly ornate and excessively large entrance halls where an allowance for surplus space should be considered

Appendix B

Any addition for external works will be made within the range of 2.5-15%.

The following percentages will typically apply but are not intended to be prescriptive.

Building ratio/description  
Town centre or island site typically with a 90% or greater building ratio, no more than a small yard or garden area, and either no car parking, or a very limited number of spaces within the hereditament. 2.5%
As above, but typically with an 80% to 90% building ratio, limited parking, external lighting and landscaping and some boundary fencing. 5%
Site typically with 50%/75% building ratio, some landscaping around buildings, secure boundary fencing, adequate parking, external lighting and landscaping with limited general parking within the hereditament and boundary fencing. 7.5%
As above, but typically with 25%/50% building ratio, landscaping around buildings, secure boundary fencing, external lighting, adequate parking within the hereditament which falls short of full requirements,. 10%
Site typically with about 25% building ratio, landscaping around buildings, secure boundary fencing, external lighting and adequate parking within the hereditament for all staff and other users. 15%

Appendix C Fee Additions

The following percentage additions should be added to the estimated replacement costs (ERC) , excluding the land value, represented by the total sum of all the component parts of the hereditament - including external works - after adjustment for location and contract size

where appropriate

Sums up to £1,000,000 12%

£1,000,000 to £2,500,000 11% (min fee £120,000)

£2,500,000 to £5,000,000 9.5% (min fee £275,000)

£5,000,000 to £10,000,000 8.5% (min fee £475,000)

£10,000,000 to £20,000,000 7.5% (min fee £850,000)

Over £20,000,000 7% (min fee £1,500,000)

In addition Town Halls and Civic Centres which are considered to be buildings of a more complex nature - this attracts a 2% addition to the above scales

Appendix D

Stage 3 Land Value Addition

Land value is to be arrived at having regard to values prevailing in the locality, in accordance with Rating Manual section 4 part 3 and the 2017 Land Value Practice Note

  • It is anticipated that developed land values will be generally based on commercial values in the locality

  • Undeveloped land is to be taken at the amenity value in the locality

In this context developed land shall be taken to be the land upon which any building is situated; hard standing; and landscaping surrounding the buildings. Undeveloped land will consist of open grass land, tree shelter belts etc.