Section 810: potteries
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
1.1 This class of hereditament encompasses a wide variety of property types from small workshops to large concerns. Many of the small workshops are conventional in character and correct application of the SCAT code is important. There are a number of pottery firms operating from standard workshop/industrial properties. A code 096, suffix G is appropriate to these properties. SCAT 218 is reserved for purpose built pottery premises. If in doubt refer to the appropriate Specialist for guidance.
2. List Description & Special Category Code
2.1 List description: Pottery and Premises
Primary Description Code: IX
SCAT code: 218
Bulk Class: F
3. Responsible Teams
3.1 This is a Specialist Class. Responsibility for implementing the scheme as set out within this Practice Note lies with the Specialist Team within Business Units as does responsibility for ensuring effective co-ordination.
4.1 This class is a Specialist responsibility within each Unit.
4.2 The Class Co-ordination Team and the Industrial Valuation Panel have overall responsibility for the co-ordination of this class. The team are responsible for the approach to and the 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 lists. Caseworkers have a responsibility to:
follow the advice given at all times – Practice Notes are mandatory
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 on any new work
5. Legal Framework
5.1 There is no specific legal framework in relation to this class of property.
6. Survey Requirements
6.1 Inspections should be carried out in accordance with the Valuation Office Agency Code of Practice.
6.2 Potteries should be measured to Gross Internal Area (GIA) for rating purposes in accordance with the RICS Code of Measuring Practice 6th edition or its replacement.
7. Survey Capture
7.1 Rating surveys should be captured on the Rating Support Application (RSA). Plans and Surveys should be stored in the Property Folder of Electronic Document and Records Management (EDRM).
8. Valuation Approach
8.1 This class of property is to be assessed on the rental method based on local industrial tone. Rateable plant and machinery, which is not reflected in the rents passing or for which there is no separate rental evidence, should be valued on a cost basis in accordance with the VO Cost Guide.
8.2 Plant & Machinery
At one time the ware was fired in bottle ovens so named from their shape. They were technically down draught intermittent ovens in which the ware was stacked. Heat was provided by a series of coal fires around the base and considerable skill was required in stoking to maintain the required oven temperature. After completion of the firing the ware had to cool down before it could be removed, the whole operation taking several days. Few, if any, of these ovens are still in use.
In a tunnel kiln, or continuous kiln, the ware is passed for firing in a continuous cycle. The kiln takes the form of a long brick or metal tunnel on a reinforced foundation, incorporating a rail track on which the cars conveying the ware through the tunnel are propelled. The cars first pass through a drying or pre-heating area, then through a firing zone, and are gradually cooled before emerging at the far end. Loaded cars awaiting entry to the kilns are run onto tracks parallel to it and are conveyed to the entry point on transfer ways, the same system being employed at the exit from the kiln where the ware is left awaiting unstacking.
Kilns are operated by gas, oil, or electricity and in some cases the firing zone is exposed to an open flame, whereas in others the flame is muffled by a special heat conducting wall. Kilns are thus referred to as “open flame” or “muffled flame”. They are generally designed for a particular purpose and may be described as biscuit, glost, enamel or decorating. Operating temperatures depend on the stage of production and can range from between 700-900° Centigrade for enamelling through 1,000-1,100° Centigrade for glost work to 1,100-1,200° Centigrade for a biscuit kiln. For sanitary ware and certain cheap domestic products attempts have been made to deal with the firing process in one operation, this being known as “once fired” ware.
The whole essence of a pottery turns on the continued efficiency of the kilns and efforts are always being made to keep the proportion of badly fired ware down to a minimum. Therefore care is usually taken to keep the kiln at peak efficiency at all times by periodic renewal and repair. Properly maintained, the life of a kiln is considerable and therefore the “short life” argument should be resisted.
Where production is in small quantities the tunnel kiln is unsuitable and uneconomic, and small kilns capable of taking one or sometimes two cars are used. These so-called intermittent kilns are brick built, often metal covered, and are fired either by electricity, gas or oil.
“Top hat” kiln
A third type of kiln is sometimes seen, where the ware is placed on a base and a portable hood, which contains the heating element (electric), is placed over the top. These are known as “top hat” kilns and in view of the mobility of the hood, which is often used in conjunction with more than one base, they are not considered rateable except for the base itself.
In addition to the kilns mentioned above there are drying units which are needed to condition the ware before firing, and are frequently found adjacent to the kilns in order that they can make use of the waste heat there from.
Kilns, being a named item in Class 4 of the Valuation for Rating (Plant and Machinery) Regulations 1994 are rateable if they pass the “building or structure” tests. The rateable parts are considered to be:-
The carcase of the kiln with steel frame
Rail tracks (if any)
Chimneys and flue (if any)
Other rateable plant
Other Class 4 items of plant for consideration as being rateable will include:-
“Slip Arks” These tanks are normally of brick construction
Rail tracks and transfer ways for kiln cars
9. Valuation Support
Valuation details are to be held on the Rating Support Application (RSA, plant and machinery should be recorded on the NBS.
Practice note: 2017 - Potteries
- Market Appraisal
In its heyday Stoke on Trent employed 70,000 people in the ceramic industry. As recently as the 1970s there were more than 200 potteries still operating in the city but by 2009 there remained only about 30 firms employing fewer than 6,000 people. When Wedgwood called in the administrators and shut down its factory in 2009, 1,500 jobs were lost and much of the mass manufacturing was moved to Asia. The industry seemed to be in terminal decline.
Surprisingly however, from that date there has been a steady if modest recovery.
When Portmeirion acquired Spode in 2009 it took the decision to reverse the regions manufacturing trend and returned some of Spode’s production from Malaysia and China to Stoke. By 2011 about 30% of the products within Spode’s iconic Blue Italian range were again being made locally. Production increased 20% and new jobs were created and then filled by former Spode employees who had been made redundant when the firm collapsed. Significant technological developments have allowed Portmeirion to compete with other markets. Robotic arms acquired and adapted from the car industry move heavy ceramic pieces between machines and yet contrastingly in many ways the manufacturing process is the same as it was 200 years ago - 22 pairs of hands will have touched each piece of pottery by the time it is packed and dispatched.
New names have emerged from the reshaping of the industry. Emma Bridgewater led and others followed. Through 2011 it was reported Churchill China posted top profits and Wedgwood announced they were turning a profit for the first time since the firm went into administration. Steelite announced it was recruiting again after posting record sales figures of £60m. Its profits for 2010 of £7.9m were up almost half from the previous year.
In 2012 the Financial Times reported - “Wedgwood is among a number of manufacturers in the Potteries now reporting a modest return to growth after years of struggling to compete against cheap Asian imports. Data from the Office for National Statistics show that the sector was worth £430m in 2012, a rise of 20 per cent on four years earlier – and a performance achieved with 20 per cent fewer companies.
In February 2014 “The Sentinel” reported - “We have seen some reshoring of production back to Britain in recent years. Companies such as Wade ceramics have been selling their whisky flagons into China for some time. You can also find Dudson’s and Steelite in quite a few Hong Kong hotels. And Wedgwood has good luxury sales outlets in Shanghai. And coming on the back of more jobs at Emma Bridgewater, healthy profits at Portmeirion, and expansion plans at Steelite and Wedgwood, it all adds up to an encouraging picture of potteries revival.
In September 2014 plans were announced to redevelop the whole Wedgwood site at Barlaston. Bringing with it 100 more manufacturing jobs (and securing another 400), work began on the £34m redevelopment. The factory itself is receiving a makeover and also the offices and visitor centre.
In May 2015 The Financial Times reported – “the industry is enjoying a modest revival with most companies reporting strong sales growth, taking on staff and investing in new equipment. Portmeirion -owner of the Spode and Royal Worcester marques, has just reported its sixth successive year of sales growth and is investing in a new kiln to double production”.
2. Changes from the last practice note
2.1 The last PN was for the 2000 Rating List. There has been no significant change apart from market commentary.
3. Ratepayer Discussions
3.1 There have been no discussions with ratepayers or their representatives for R2017.
4. Valuation Scheme
4.1 The rentals comparison method should be utilised in valuing this class for rating purposes.
A small amount of rental evidence may be available on pottery occupations but this class of hereditament encompasses a wide variety of property types from small workshops to large concerns. Many of the small workshops are conventional in character and rental evidence can quite correctly be drawn from local industrial/workshop properties and local industrial matrices.
4.2 Values are regionally based and will vary widely across the country. When considering the evidence from new lettings rents will often require adjustment to take account of rent free periods, capital payments, stepped rent arrangements or other incentives. Adjustments for height, end and other allowances should be as for the 2010 list.
4.3 Plant and Machinery (P&M)
These should be captured and valued in accordance with the Plant and Machinery sections of the Rating Manual and the Cost Guide.
The Statutory Decapitalisation Rate must be used.