Mr. John O'Sullivan:

The committee will be aware that conducting a national revaluation programme - the first of its kind in over 160 years - has been a priority for Government since the enactment of the Valuation Act 2001. I can report that the programme has gained considerable momentum since June 2015, following the introduction of new legislation, and advancing the programme is a central element of the Valuation Office’s current strategic plan covering the period 2017 to 2019.

As indicated in the briefing material and the map forwarded to the committee last week, the current position is that the first revaluation of 15 local authorities is now complete and revaluation of an additional eight counties is currently under way. The final phase of the programme, involving six counties covering eight local authority areas, is scheduled to commence in 2019 and conclude in 2021.

The members of the committee will be aware that the purpose of revaluation is to improve transparency in the local authority rating system and to distribute the commercial rates burden more equitably between ratepayers. The value of property changes over time but not at the same level across categories, business sectors or locations. Hence, revaluation is a central feature of the rating system in similar jurisdictions as a revaluation programme is the only comprehensive way to address such movements. Following revaluation, some ratepayers obtain a reduction in rates while, inevitably, others experience an increase. However, based on the revaluations conducted to date, and as the Comptroller and Auditor General has outlined, the number of businesses receiving a reduction considerably exceeds the numbers experiencing an increase in their rates liability. I have provided further details in this regard on page seven of the briefing material.

The outcome of a revaluation in a particular local authority area depends on the market conditions in play in that area on or around the revaluation date. The particular mix of urban and rural properties and differences in the range of property types in the main business categories and sectors - retail, industrial, offices, hospitality, etc. - also has a major bearing.

Estimating the value of a property for rates purposes is an entirely evidence-based exercise. The primary sources of such evidence are information relating to lease transactions provided by the Revenue Commissioners and the Property Services Regulatory Authority and, of course, information obtained directly from ratepayers. For certain categories of property, trading information or construction costs may be used to assist in assessing the rental value of that property. During a revaluation, the Valuation Office conducts its analysis in accordance with best international practice as set out in published practice guidance notes and in line with well-established valuation principles and case law arising from the Valuation Tribunal and the higher courts.

When a revaluation is being conducted, we are very keen to ensure that the work we do is well understood and extensive supports are provided to ratepayers and other stakeholders. Thus, for example, detailed information packs are provided directly to ratepayers at key stages in the process. We engage with local media to increase the understanding of the work we are doing. We organise walk-in clinics for ratepayers at various locations within the local authority area. We hold frequent briefings of trade bodies and representative groups before, during and immediately after a revaluation. We organise briefings of elected members of local authorities at key stages in the process.We provide online access to an extensive set of guidance notes and other instructional material and we operate e-mail and telephone helplines throughout a revaluation. We also operate a joint forum with the Society of Chartered Surveyors Ireland, SCSI, which represents many of the professional advisers to ratepayers.

As committee members will be aware, chapter 11 of the Comptroller and Auditor General’s report on the national revaluation programme sets out two recommendations. It said that, "The office should review its approach to the recording of costs associated with the revaluation programme to ensure that accurate costings of the different elements of and approaches to revaluation are available”. It also said that, “A review of the appeals process with the Appeals Tribunal should be conducted in order to identify and address the causes of not dealing with appeals in a timely manner”. As Accounting Officer, I have accepted both recommendations and can confirm that substantial progress has been made in implementing measures required to address these recommendations. I have provided specific details in relation to these measures in the briefing material, on pages three to five.

In respect of the 2016 appropriation accounts for Vote 16, I can confirm that the Valuation Office has received a clean audit report from the Comptroller and Auditor General with no significant issues arising.

The enactment of the Valuation (Amendment) Act 2015 has represented a sea change in enabling the office to carry out the national revaluation programme. The Act introduced several new provisions with the objective of accelerating the programme. In particular, I draw the committee’s attention to elements of self-assessment by ratepayers, known as occupier assisted valuation. As the Comptroller and Auditor General indicated, piloting of this new process has recently commenced in Laois. Another new provision is the enabling of revaluation by external contractors to augment our internal resources. This approach has been used on a pilot basis to conduct the revaluation of Carlow and Kilkenny, which were completed in September 2017, an independent review of which will be undertaken shortly. The Act also sets out the streamlining of the appeals process. It provides for the wider application and use of statistical information, as has been the case in other countries for some time. It also contains new provisions in relation to improving the operations of the Valuation Tribunal, the independent body which determines appeals made against valuations from the Valuation Office.

The new Act also addressed a number of operational issues highlighted during the implementation of the 2001 Act. Supported by the changes brought about by the 2015 Act, acceleration of the national revaluation programme has involved a multi-faceted approach from the staff and management of the Valuation Office. As our current strategic plan demonstrates, we have concentrated on using a wider range of data sources to inform and validate our valuations, continual improvements in how we organise and carry out our work and developing innovative approaches to valuation, underpinned by the new legislation and new technology.

As a matter of information, the members of the committee will be aware that the Government is bringing about the merger of the Valuation Office, the Property Registration Authority and Ordnance Survey Ireland. The new organisation arising from the merger, known as Tailte Éireann, will have responsibility for several functions, including the State property registration system, the State mapping and surveying infrastructure, the State property valuation service and the development and maintenance of State geospatial information.

This merger requires primary legislation to establish the new entity, and publication of the Tailte Éireann Bill, which is being drafted, will represent the next major milestone. The committee is aware that the Government recently decided that the functions of the merging organisations should be transferred to operate under the aegis of the Department of Housing, Planning and Local Government as and from 1 January 2018.

The Valuation Office is very cognisant that commercial rates are a significant outlay for businesses. We exercise a range of legislative functions set out in the Valuation Acts 2001 to 2015 in an independent manner, and our overriding concern is to ensure that the valuations arrived at for rates purposes are correct, equitable and uniform. This is backed up by the presence of an extensive appeal process and the application of a wide body of internationally developed professional practice, procedures and case law.

The national revaluation programme has gained considerable momentum since June 2015 and the Valuation Office intends to maintain this momentum to the conclusion of the programme.