Rateable Values Rant

pedigreechump6

Re-posting this in a separate thread as it didn't get any replies in the main Sticky thread...

Hi everyone, although I've never posted here before, I've been reading the forum for years so thanks for all the help generously provided before.

Now, on to the matter at hand and I really don't want to go over the same points made previously but rateable values and the absurd bills they can produce need to be addressed by government.

I rent and have done ever since I moved out of my parents house several years ago but it's only in my latest flat that I have a water meter installed...and the savings are incredible.

For the past 4 years I have lived alone in 3 different properties. I have used roughly the same amount of water during this time and yet the bills have been hugely different:

Flat 1: rateable value of 826 meant annual bills of £759

Flat 2: initially rateable value of 290 which meant annual bills of £379 but then, after finding my flat couldn't get a meter, I was put on the Assessed Household Charge for a one bed flat of £270

Flat 3: I've only been living here a little while so can't get annual figure yet but based on the bill received for the first 44 days, it will be £100 (although I would consider myself to be very efficient with water)

So between the most expensive and the cheapest, my annual saving is likely to be around £659. My main points of argument are:

Point 1: rateable values are beyond a joke (we all know that) so how can it still be justifiable to charge based on them?

Point 2: even when I was finally put on an Assessed Household Charge in Flat 2, it seems to me to still be far higher than it should be.

Point 3: if Thames Water (my provider) has an Assessed Household Charge for a property with 5 or more bedrooms of just £375 which is meant to be a guide to how much a household of this size will use, how can they rightly justify unmetered bills higher than this for a 1 or 2 bedroom property?

Point 4: if all properties in the country have a known number of bedrooms (which they do as far as I know) and water companies have Assessed Household Charges that reflect their estimates of usage for different sized properties, why can't they charge all unmetered properties this same charge regardless whether or not they have requested a water meter? This would do away with rateable values.

Point 5: for anyone arguing against mandatory metering because it will push their bills up - so what? Are you saying, per cubic metre of water used, that I should pay more and you should pay less because I live alone and you have a family? Is that how energy bills work? No, you pay for what you use - that is the only truly fair way for it to work.

I'm no expert on this so I do have a few questions (aside from those asked in the points above):

Question 1: I read somewhere that Ofwat agree how much profit water companies can make so that they remain able to provide a suitable level of service and pay for investment etc. Is this true?

Question 2: if the above is true and the profits are pretty much set by the regulator, was £1.7 billion over 5 years, of which £1.4 billion was paid out in dividends, a fair amount for Thames Water to make?

Question 3: is there anyone in government who has this issue on their radar or are they either ignorant or focusing primarily on energy?

Ok, that's the rant over from me. I look forward to reading your responses.

Cardew

An interesting subject with a long history.

Unfortunately Thames Water have a mass of different rates within their region, so charges for water and sewerage vary tremendously from approx. 88p/£1RV to 171p/£RV:

http://www.thameswater.co.uk/your-account/567.htm

Those costs are way below that in most of the UK –especially the South West

As you say Rateable Values are beyond a joke. However you need to understand the background.

RV was the method of collecting ‘local taxes’ prior to April1990 when the method became the ‘Poll Tax’ and then the present Council Tax.

Importantly the RV was not based on the value of the property, but the notional rent the property could command. The criteria for assessing that notional rent was varied. Area, modernisation(bathroom/kitchen/centralheating), amenities, size etc etc

Also the last general re-valuation of properties in England was in 1973. So a run down flat in an area like, say, Battersea in London could have a low RV 40 years ago. Despite Battersea becoming more ‘fashionable’ and the flat being modernised and now a desirable residence, it retains that low RV. It should of course have declared the modernisation and had a meter fitted – but nobody bothers and there is no real enforcement of that regulation.

Even more of a discrepancy, I know of huge houses(mansions!)with several acres. In 1973 they were completely un-modernised and almost derelict. They had a ‘peppercorn’ RV of around £50 simply because nobody would wish to rent such a place. Now they are modernised, Band H and worth over £1million but still retain the same RV.

The Water Privatisation Bill laid down that all properties built post April 1990 would have a meter fitted. Also whilst existing properties could retain payment by RV, when they changed occupants the Water company could make a meter fitting mandatory; thus it was envisaged that the number of houses with RV charges would gradually reduce. Also any modernisation/extension of the property should mean a meter be fitted.

However the above leads to your Question 1. The water companies’ revenue and hence profit is strictly controlled by the Regulator, albeit they have to meet certain targets – e.g reduce leakages.

Unfortunately whilst the water companies can make meter fitting mandatory in the circumstances described above, some simply don’t bother. One can only surmise that it simply doesn’t affect a company’s revenue/profit. If they get more or less income from installing meters, they can simply adjust other charges to compensate.

You could have added in your rant the vexed question of Surface Water Drainage(SWD). Possibly millions of households are paying SWD charges to which they should claim relief. The ‘default’ position is they charge SWD. All the occupants in a 20 storey block of flats can pay the same as a single storey property; again no incentive either way for the water companies to address this problem.

Question 2 – I doubt it.

Question 3 – Well the companies seem very attractive to foreign investors, mainly because they are in a win/win situation.

macman

Why do we still have RV billing based on 1990 prices? Quite simply, because no government in 23 years has had the guts to push through a national reval. It would be expensive, and would lose the party in power more votes than it gained.
No doubt it was envisaged that the whole country would be metered within a decade or so, and so any RV anomalies would not be relevant-but that hasn't happened.

pedigreechump6

Hi and thanks for both your responses.

I realise that this has a major historical side to it and a political one too but it doesn't prevent the annoyance.

What about points 3 and 4 in my original post? Surely using the assessed household charges based on number of bedrooms is a far fairer way to calculate unmetered bills?

It wouldn't cost much to do since every property is registered and has a stated number of bedrooms and the water companies already use assessed charges for people who ask for a meter but can't have one fitted.

Thoughts?

Cardew

pedigreechump6 wrote: »

Hi and thanks for both your responses.

I realise that this has a major historical side to it and a political one too but it doesn't prevent the annoyance.

What about points 3 and 4 in my original post? Surely using the assessed household charges based on number of bedrooms is a far fairer way to calculate unmetered bills?

It wouldn't cost much to do since every property is registered and has a stated number of bedrooms and the water companies already use assessed charges for people who ask for a meter but can't have one fitted.

Thoughts?

Firstly the water companies are bound by the provisions of the Water Privatisation Act. The simply cannot 'invent' their own charging method. The Act lays down meters, RV or assessed if a meter cannot be fitted.

Why number of bedrooms?

These days you can get 'small' terraced 3 storey houses with 5/6 tiny bedrooms; or huge detached houses with four large bedrooms each with en-suite.

If indeed you are trying to match water bills to consumption, then it is far fairer to use number of occupants; and at least Thames have a single occupant assessed rate.

Actually if you look at your point 5, where you argue people should pay for what they use(obviously sensible), it conflicts with your argument in point 4 where you suggest that the number of bedrooms should determine the charge. Why should a widow in her four bedroomed property pay a huge charge?

pedigreechump6

Cardew wrote: »

Firstly the water companies are bound by the provisions of the Water Privatisation Act. The simply cannot 'invent' their own charging method. The Act lays down meters, RV or assessed if a meter cannot be fitted.

Why number of bedrooms?

These days you can get 'small' terraced 3 storey houses with 5/6 tiny bedrooms; or huge detached houses with four large bedrooms each with en-suite.

If indeed you are trying to match water bills to consumption, then it is far fairer to use number of occupants; and at least Thames have a single occupant assessed rate.

Actually if you look at your point 5, where you argue people should pay for what they use(obviously sensible), it conflicts with your argument in point 4 where you suggest that the number of bedrooms should determine the charge. Why should a widow in her four bedroomed property pay a huge charge?

Yeah good point, well argued.

Occupants would be fairer - is it possible? Is there a database that shows the number of occupants? Probably not...I was thinking electoral register but that doesn't count those under 18 or those who just aren't on it.

Well, I guess metering is the only way to go then. I'd be interested to see what the situation is in another 10 years to see if anything has been done.