Non-Domestic Rating (Lists) (No. 2) Bill — House of Lords, 2021-03-01
Topic: Domestic Commerce
Stephen Greenhalgh (Conservative, Centre-right): My Lords, in my rush to respond to the noble Lord, Lord Kennedy, on the first amendment, I forgot to declare my relevant commercial and residential property interests as set out in the register, so I do so now I thank the noble Lord, Lord Addington, and my noble friend Lord Moynihan for their suggestion that I tear up my speaking notes and do what the amendment says. I will seek to reassure them that we have a real commitment to community and grass-roots sports. In that spirit I will refer to a number of things that the Government are doing. My family, friends and I all benefit from community sports and it is right that we do all we can to support community and grass-roots sport, as Members have highlighted As I explained in my response to the previous amendment, we will not know the effect of the revaluation on ratepayers for some time and certainly not within six months of the passing of this Bill. The same points apply to this amendment. However, I appreciate that the noble Lord and others want to understand how the revaluation will affect amateur sports clubs. It may therefore assist the noble Lord if I explain how these clubs are valued for business rates—I will try to make the incomprehensible comprehensible. First, the Valuation Office Agency must, by law, value a property having regard to its current use. This means, for example, that when valuing the site of an amateur cricket club the valuation officer must have regard to its value to the cricket club and not its value to a developer. As you would expect, this important principle means that the rateable value of sports grounds is generally quite low The VOA publishes statistics on the rateable value of different categories of properties. The average rateable value in England of sports grounds is £12,000 but the value of many is much less than this and the median rateable value of sports grounds is only £6,000. That equates to a full annual rates bill of about £3,000, which for many will be reduced by the 80% mandatory rate relief. Under those circumstances, many sports clubs will find themselves with a rates bill of as little as £600 per year or £50 per month Of course, I appreciate that some clubs will find themselves paying more than this. Business rates reflect the specific circumstances of the property so some clubs, for example with more facilities than others, may find themselves paying more. We also heard in Committee that some clubs may be not eligible for the 80% mandatory relief for community amateur sports clubs. That is a matter specific to the individual clubs but I can understand that some will still have a particular interest in understanding whether their rates bill may change at the 2023 revaluation As I have said, we will not know the answer to that until much later in 2022, at the point when all clubs will be able to see their new rateable values. These valuations will be prepared over the next 18 months and, as with all properties, the VOA will first search for evidence of rents paid on sports grounds as a guide to value. As I have explained, to be good evidence these rents will have to reflect the value to the sports club. These rents should not reflect matters such as the development value where, for example, the club happens to be in a prosperous area. To the extent that the rental evidence, where available, shows that values have risen or fallen over the last six years, this will be reflected in rateable values at the 2023 revaluation The VOA expects to use rental evidence for most clubs but, whatever the valuation approach adopted for the property, the VOA is clear in its guidance that for non-commercial clubs valuers can also have regard to ability to pay before setting rateable values. The valuer should ask themselves if the rateable value represents the rent that clubs or organisations of the kind which occupy the type of sports ground concerned could reasonably be expected to pay. The VOA’s guidance specifically recognises that where income is generated from the occupation of these grounds, the costs of occupation will be barely covered despite voluntary assistance. Although I am unable to tell the noble Lord how amateur sports clubs will be impacted by the 2023 revaluation, I hope that this background to how they are valued is helpful The noble Lord, Lord Addington, has established to the House the vital importance of our community sports clubs. While the value of the 80% mandatory business rates relief to eligible community amateur sports clubs cannot be understated, I recognise the need for the Government to provide support beyond this, particularly throughout the duration of this pandemic. This Government’s commitment to sport is evidenced by the £220 million provided by Sport England to support community sports clubs and exercise centres since March 2020. In addition, the Government have put in place a £300 million sports winter survival package, which has been used to protect the immediate future of major spectator sports over the winter period, and a £100 million support fund for local authority leisure centres. In total, the Treasury estimates that around £1.5 billion of public money has gone into sports in the last year. I hope the House will agree that this constitutes a significant package of support that this Government have made available to sports clubs and exercise facilities of all sizes I hope that I have given the House some assurances about both the financial support that the Government are providing to our grass-roots sports sector, and the process and approach which will be taken over the coming months as amateur sports clubs are revalued by the VOA. We will continue to keep in mind the points on how we can support community sports at the grass-roots level. I appreciate the passion from both the noble Lord, Lord Addington, and my noble friend Lord Moynihan, but, reluctantly, I cannot tear up my speaking notes. Therefore, I hope that with these reassurances the noble Lord, Lord Addington, will agree to withdraw his amendment.