Non-Domestic Rates

Section 71 of the Localism Act 2011 (“LA 2011”) amends the Local Government Finance Act 1988 (“LGFA 1998”) to provide a power for the Secretary of State (“the SoS”) to prescribe by regulations conditions for the cancellation of certain backdated non-domestic rates, but only where a property is shown in a local non-domestic rating list compiled on 1 April 2005 as the result of an alteration of the list made after the list was compiled. Pursuant to that power there have now been made the Non-Domestic Rating (Cancellation of Backdated Liabilities) Regulations 2012, SI 2012/537 (“the 2012 Regulations”).

Non-domestic rates liability is usually discharged by instalments payable by the ratepayer. However, where a rating list is altered with retrospective effect by a Valuation Officer, this can lead to backdated liability which, rather than being payable in instalments, is payable straightaway. The 2012 Regulations make provision for the cancellation of certain backdated non-domestic rates liabilities, in certain circumstances.

Under Section 41 of LGFA 1988 most non-domestic properties appear on a rating list compiled for the area in which they are situated. Under Section 43, the occupiers of such properties are liable to pay non-domestic rates for each financial year. In certain cases where the property is unoccupied, the owner is liable to rates under Section 45.

The Non-Domestic Rating (Collection and Enforcement) Regulations 1989 (S.I.1989/1058) (“the 1989 Regulations”) govern the practicalities of billing for rates in respect of locally listed properties. They require the billing authority to issue to the ratepayer for each financial year a demand notice, setting out their liability to rates. Where a demand notice is issued, Regulation 7 of the 1989 Regulations provides for liability under the notice to be discharged either in instalments calculated in accordance with Part 1 of Schedule 1 or in accordance with an agreement reached between the billing authority and the rate payer.

Where the demand notice is issued after the end of the financial year, Schedule 1 does not apply and instead Regulation 7(5) provides that the notice shall require payment of the amount payable for the year in a single instalment. One of the circumstances in which a demand notice can be issued after the end of a financial year is where, pursuant to the duty to maintain an accurate list, the Valuation Officer for the billing authority area enters a nondomestic property on the rating list for the first time after the end of the year but with an earlier effective date. The effective date of an alteration to a rating list – including by way of adding properties to it – is governed by the Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009 (S.I. 2009/2268). Until a property is shown in a list, the conditions in Sections 43 and 45 of LGFA 1988 are not met and so no demand notice can be issued. Once those conditions are met, a demand notice will be issued in respect of liability from the effective date of the list entry.

In some cases where there is a difference between the day a rating list is altered and the effective date of the alteration, significant backdated liability can accrue. The 1989 Regulations were amended to include a new Schedule 1A which allowed – in certain circumstances – billing authorities to agree with the ratepayer that the liability which accrued between the effective date of the list alteration and the date it was actually made can be discharged in instalments over eight years. Further amendments to Schedule 1A of the 1989 Regulations allowed agreements under the Schedule to include a moratorium on payments of instalments until 31 March 2012. 

Section 71 of LA 2011 inserted Section 49A into LGFA 1988. This Section provides that the SoS may by Regulations provide that, in a prescribed case, the chargeable amount under Section 43 or 45 for a hereditament in England for a chargeable day is zero. But that relief is only available in relation to a hereditament and a chargeable day if the hereditament is shown for the day in a local non-domestic rating list compiled on 1 April 2005 and it is shown for the day as it is shown as the result of an alteration of the list made after the list was compiled, thereby constituting backdated liability. The Section also makes provision for the conditions that the SoS may prescribe. The 2012 Regulations constitute the first exercise of this power.

The 2012 Regulations therefore set out the limited circumstances in which a backdated liability may be cancelled, which relate to the hereditament and how it was formed, when it was entered onto the rating list, the identity of the ratepayer and the length of the backdated liability. The 2012 Regulations apply to England.

Public Sector Equality Duty (“PSED”)

In R (Barrett) v Lambeth LBC [2012] EWHC 4557 (Admin) Ouseley J held that the Council’s decisions, in the light of budget cuts which it had to make, not to continue annual grant funding for a small charity, PFC, providing services in Lambeth to people with learning disabilities and not to continue commissioning those services from the charity amounted to a decision no longer to provide such services and was a breach of the PSED, set out in Section 149 of the Equality Act 2010 (and previously Section 49A of the Disability Discrimination Act 1995), but not a breach of any duty to consult.

At paragraph 101, Ouseley J said:

“… I do not regard a decision on a function as compliant with the equality duties, and this would apply to many aspects of decision-making in a public body, if due regard is had by officers, and the different body which takes the decision relies simply on the fact that trusted officers have had due regard. It cannot say that it too has therefore had due regard. It is the decision-maker itself which must have due regard. … the provision of a fair summary of the EIA might suffice for the Councillors rather than the whole EIA, but it would have to cover the essential features of how the duty was being fulfilled. Decisions which created budgets for departments or sections at a higher level so that leeway was created for later decisions on the precise implementation of cuts could also suffice, with the equality duty being considered at the more detailed stage as in the Fawcett Society case.”

At paragraph 110, Ouseley J said:

“… There is no need for very detailed explanations and lengthy analysis so long as the features necessary for due regard to be had are properly understood. The analysis, whether in an EIA or not, does not have to resolve with reasons every issue which a party may raise. It does not have to be a reasoned decision letter.”

Community Care Assessments

In R (NM) v Islington LBC [2012] EWHC 414 (Admin) Sales J held that, in order for a local authority to be under an obligation to assess a person’s needs for community care under Section 47 of the National Health Service and Community Care Act 1990, it was (paragraph 77) necessary for the claimant to show that there was a “sufficiently concrete and likely prospect” of a need for such services arising. Sales J said:

“The words “may be in need” are in the present tense and do not import a flavour of coverage of possible needs which may arise in the future, … In context, the word “may” is apt because it indicates that there has to appear to the relevant local authority a significant possibility that the person in question might have a present need for community care services to be provided to him by that local authority and it is that possibility which then has to be investigated by means of the assessment under Section 47(1)(a).”

Sales J continued, at paragraph 78:

“However, in a number of situations – such as release from mental hospital …discharge from hospital …and release from prison … it may be sufficiently clear that a person is likely in the very near future to be present in the area of the local authority and, when they are, may then be in need of community care services, so that the obligation of assessment under Section 47(1)(a) arises before the person actually arrives.”

At paragraph 79, Sales J said:

“In my view, this interpretation of the words “may be in need of any such services” as covering both cases of present need and a narrow penumbra of cases of reasonably predictable future need is justified by reference to the statutory purpose of Section 47 and of the community care provisions … to which it refers, namely to ensure that persons who may have needs of the requisite character (i.e. are vulnerable in some relevant way) have those needs assessed and met, and receive proper social welfare protection in respect of their vulnerability. To limit the obligation of assessment in Section 47(1) to cases where a person is already present in the area of a local authority or already presenting needs for the local authority to meet now in cases where a person is known to be about to require community care services in the near future would create a gap in time when the intended social welfare protection was not or might not be provided. Parliament cannot sensibly be supposed to have intended to allow such a gap in protection to exist.”

At paragraphs 81 and 82 he said:

“81. It is obvious that arranging for an assessment of needs may take some time and Section 47(5) makes clear that Parliament intended that social welfare protection should be provided in the interim – in the case contemplated by Section 47(5), by the local authority if the person is on their doorstep. But where the person’s needs are presently being met by another public authority (in this case the prison service), but it is reasonably clear that they may be about to need provision of services by the local authority, it is reasonable to infer that Parliament intended that the person’s needs should be assessed before arrival on the local authority’s doorstep – otherwise, there would be a risk of a real need, which would be recognised upon assessment but might be missed otherwise, going unmet for a period of time (i.e. between arrival on the local authority’s doorstep and the carrying out of the assessment and the taking of the decision under Section 47(1)(a) and (b)).

82. In further support of this interpretation of Section 47(1), I also consider that Parliament should be taken to have had in its contemplation when enacting Section 47 in 1990, the sort of situations in which the release of a person maintained in a mental hospital or the release on parole of a person in prison might well be informed by questions of the availability of care services for that person in the community. The relevance of such matters in such cases will not be unusual but could potentially arise in many cases. Against that background, it is reasonable to infer that Parliament intended that in appropriate cases a local authority should be required to make an assessment and decision under Section 47 so as to assist other relevant public bodies (for instance, in these examples, a secure mental hospital or the prison authorities, or Parole Board or mental health review tribunal) to take a decision affecting the liberty of the person in question and their general welfare. Their well-being might well be better promoted and their underlying needs better catered for by being at liberty and in the general community with appropriate support rather than in detention.”

The question then becomes, how definite does the likelihood of the local authority having responsibility for meeting the relevant needs of a person in future have to be before the obligation to assess under Section 47(1) arises? In the judgment of Sales J the true position lies between the contending situations that were made to him. At paragraph 85, he concluded:

“Parliament cannot have intended to create an obligation of assessment in relation to a very wide class of cases of future provision of services, since doing so would create a serious risk of scarce resources available to local  authorities for community care being wasted through assessments being carried out for no ultimate good purpose, thereby depleting funds available to provide much-needed services to vulnerable people who actually do require social welfare support from the local authority in question. In interpreting the intended ambit of the class of cases of future provision covered by Section 47(1), it is necessary to bear in mind that the relevant condition set out in the opening part of the provision is expressed in the present tense, so it is reasonable to suppose that Parliament intended the relevant extension to cover future cases on pragmatic grounds, as set out above, to be narrow. The future cases intended to be covered are those which are closely analogous to those where there is a (possible) present need for provision of community care. It is only in relation to such a narrow class that it can be said that “the contextual imperative” is so powerful as to allow the language in the present tense in Section 47(1) to be interpreted as covering future or future conditional cases …”

Sales J also considered Articles 5, 8 and 14 of the ECHR, and the UN Convention on the Rights of Persons with Disabilities, 2006 (“the CRPD”). He said:

“98. The CPRD is an unincorporated international treaty and so does not have direct effect in English law. It came into force and was ratified by the United Kingdom after the NHSCCA was enacted, so it cannot act as a potential aid to interpretation of that statute in cases of ambiguity. …

99. I confess that I do not find the relationship between the CPRD and the Convention rights in the ECHR and the HRA transparently clear under the Strasbourg jurisprudence and in what little domestic authority there is.100. It is, of course, well established that the ECHR is a “living instrument” whose meaning and application may vary over time as conditions change and where commonly accepted standards develop among the member states of the Council of Europe: … When interpreting concepts in the ECHR … the ECtHR looks to identify whether there is any consensus in the domestic law or practice of member states or any relevant development or trend in relevant international instruments which might supply an appropriate standard for judgment regarding the current meaning to be given to the rather open-ended Articles of the ECHR: … Further, when assessing the width of the margin of appreciation to be accorded to state authorities in a range of contexts, the identification of common European standards or a clear approach to the issue in other international instruments is a relevant factor as tending to narrow the margin of appreciation (or, if there is no consensus, as tending to widen it): …

101 There are examples of other international treaties which have been taken to inform the proper current interpretation of the Convention rights in the ECHR, such as the UN Convention on the Rights of the Child … and the Hague Convention on the Civil Aspects of International Child Abduction …

102. In principle, a point might be reached when the CPRD has been ratified by sufficient European states, or when sufficient European states have brought their domestic law and practice into line with the standards set out in the CPRD, that the CPRD or the practice flowing from it could be taken to amount to a relevant European consensus to inform the interpretation and application of the Convention rights. Also, though the position is less clear, a point might be reached where the CPRD is taken to be a leading international instrument establishing an appropriate standard against which to judge the conduct of member states of the Council of Europe, …

103. What is rather unclear at present is whether the CPRD has yet acquired this significance for the purposes of interpretation and application of the Convention rights (or some of the Convention rights). …

104. The ECtHR, in recent jurisprudence, appears to be ready to accord some weight to the CPRD when interpreting the ECHR, but its references to the CPRD have not been central to nor determinative of any finding of a violation of the ECHR: …

105. Domestic authority on the point is still more exiguous. …

107. … None of the Strasbourg or domestic authorities goes so far as to say that an individual can in substance rely directly on the provisions of the CPRD under the guise of relying on the ECHR Convention rights. …

107. … In my judgment, even if the content or application of the Convention rights in Articles 5, 8 and 14 of the ECHR is to be taken to be informed by Articles 19 and 26 of the CPRD, the interpretation of Section 47 of the NHSCCA which I have concluded is correct would be compatible with those provisions. …”