Bus garages
Source: gov.uk (2025-04-28)

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This instruction applies to all bus garages.

2. List description and special category code

List description: bus garage and premises

Scat code: 406 Bus Garages (Contractors Valuation), 407 bus garages (Rental Valuation)

Suffix: S

3. Responsible teams

The National Valuation Unit (NVU) are responsible for the valuation of this class.

Any queries of a complex nature arising from a particular case should be raised through the CCT to be referred to the NVU Civics Classes facilitator.

4. Co-ordination

NVU Civics has overall responsibility for the co-ordination of this class. The team are responsible for the approach to and accuracy and consistency of valuations for bus garages. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating list. Caseworkers have a responsibility to:​​​​​
- follow the advice given at all times
- 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 should any issues arise that are not covered in this instruction
5. Legal framework

5.1 London Transport Executive v Croydon LBC and Phillips (VO) 1974 LT RA 225

Two sets of agreed values had been placed before the Tribunal, one on the basis of alternative use for warehousing or industry or transport depot and the other for “existing use” only in which the assessments were “derived from agreed values and values determined on appeal for other bus garages”.

The Lands Tribunal in their decision were quite adamant that no use other than that of a public service bus garage could be considered in the rating hypothesis:- “We are satisfied that the practice which has stood for many years, from time immemorial in rating experience, of regarding the existing use as the only use to be valued is the right one” and “that so long as the proprietor makes a beneficial use of his property, the assessor has nothing to do with whether it might have been turned to other and more lucrative purposes”.

By the Tribunal’s own admission, this decision has “only a limited value” due to lack of counter arguments by the respondent.

The decision should not be regarded as preventing a bus garage being valued by reference to the evidence of rents passing on, or assessments determined for, other hereditaments which are occupied for uses different to the subject hereditament, provided it can be shown by evidence the bus operator would equal the rent being paid for those hereditaments falling within a different mode or category.

5.2 Sheffield United Tours Ltd v Elliott (VO) 1983 RA 81

The Lands Tribunal Member held that although alternative uses could be taken into account in valuing bus garages structural alterations in excess of de minimis could not be assumed. The work necessary to adapt six bus garages in Sheffield for another possible user was in excess of de minimis, and, even taking a broad view, there was no evidence of demand for alternative uses or the possible effect of such alternative uses on value. The Lands Tribunal therefore accepted the ratepayers’ valuations based on the agreed assessments of other bus garages in the West Midlands, Merseyside and Yorkshire supported by reference to the assessment of a large warehouse in Sheffield.

5.3 Scottish and Newcastle (Retail) Limited v Williams VO 2000 RA 119 and the subsequent Court of Appeal Decision - Williams (V0) v Scottish and Newcastle Retail and Allied Domecq 2001.

The Phillips (VO) and Elliott (VO) cases above should now be considered in light of the Williams (VO) decision which supports Fir Mill Ltd v Royton UDC and Jones (VO) 1960

At para 52 page 58 of the decision (referring to para 152 page 173 of LT decision) - General conclusions

“The rebus sic stantibus rule identifies for the purpose of valuation the hereditament, the physical changes which may be made of it, and the mode or category of occupation. The rule rests on the concept that what has to be determined in rating is the value to the occupier of his occupation of the hereditament, measured by the rent on an assumed yearly tenancy” In carrying out a valuation under the rating hypothesis the following assumptions are to be made about the hereditament:

that the hereditament was in the same physical state as on the material day. Alterations which the hypothetical tenant might make to the hereditament may be taken into account if, taken overall, they are minor. All other prospective alterations are to be ignored:

that the hereditament could only be occupied for a purpose within the same mode or category of purpose as that for which it was being occupied on the material day. Any prospective change of use outside that mode or category is to be ignored. In determining to what mode or category a particular use belongs it is the physical characteristics of the use. Some uses may not fall within any such broad category, however, and are to be regarded as sui generis. Any evidence relating to the rents or assessments of other hereditaments may be taken into account provided it is relevant to the valuation. There is no rule that evidence relating to another hereditament is irrelevant if that other hereditament is in a different mode or category of occupation”.

and at paragraph 164:

“I would certainly not treat that [the formulation in Fir Mill] as a statutory text. But Parliament’s adoption of the expression ‘mode or category of occupation’ must be taken as recognising that the formulation in Fir Mill is on the right lines, even if its precise scope has to be worked out on a case-by-case basis” - no strict rule

5.4 Cheale Meats Limited v Ray (VO) 2012 LT RA 145

This case concerned the valuation of an abattoir (sui generis use) paragraph 44 of the decision

“An abattoir as the parties agree, is a sui generis use. It is not in the same mode or category of occupation as an industrial building. While evidence of industrial values is not on that account rendered irrelevant, care clearly needs to be taken when having regard to values of hereditaments in another mode or category of use or, where the use is sui generis, to values of hereditaments outside that more restricted class. Underlying the rebus sic stantibus rule relating to the mode or category of use is the recognition that the value to the owner of the subject hereditament - which is what has to be determined - may be different from the rent that the hereditament might command if let in the open market for some other purpose”.

6. Survey requirements

6.1 Basis of measurement

The basis of measurement to be adopted for hereditaments within this class is Gross Internal Area (see VO Code of Measuring Practice for Rating Purposes), plus the area of all hard surfacing and total site area. It would be useful for survey purposes if bus parking, bus circulation and car parking can be noted separately.

6.2 Fleet lists as at AVD

It is crucial that fleet lists detailing the bus numbers maintained and stored overnight is obtained. It is important that the type of bus is recorded as size differs between bus types.eg Coach, Double Decker, Single Decker, Midi and Mini together with the bus make and model.

6.3 Garage ancillaries

Where a modern substitute is envisaged, though the workshop and parking will be determined by bus fleet numbers at the antecedent valuation date (AVD), the ancillaries will be taken as actual. It is therefore important the survey records all ancillaries being used in connection with the garage. There may be examples of part of the garage floor being used for open storage. This area should be reflected in the modern substitute of the building.

For examples of ancillaries. See 8.3.3 below.

Within the workshop the number of pits should be recorded, to include length, width, and depth.

6.4 Plant and machinery

The following list of rateable plant and machinery likely to be found as part of a bus garage hereditament includes:
- boilers for heating purposes, plus boiler accessories
- air compressors
- foundations and settings
- tanks for diesel, oil, hydraulic oil, petrol, water
- fire protection system including sprinklers, pumps, tanks, hydrants, fire alarm system
- lighting of parking areas
- security systems, including security lighting
- ventilating and cooling systems including fans, blowers, ducting, screens, filtering plant etc
- weighbridge
- drainage channels, traps, separators, pumps, tanks
- vehicle testing equipment
- electricity supply and standby generating facilities
- passenger lifts/escalators
- turntables and transversers
- chambers for paint spraying
- fixed gantry rails for overhead cranes
The majority of the above will be reflected in the workshop cost or reflected in external works. The exceptions to this are the compressors and plant and machinery as part of the bus wash which are added separately.

7. Survey capture

Where a bus garage falls to be assessed on the contractor’s basis the survey information is to be transferred to the dedicated valuation spreadsheet held on the Non-Bulk Server (NBS). Where a bus garage is to be assessed on the rentals method the survey data should be captured within the Rating Support Application (RSA). In all cases the survey material itself including plans etc. should be held within the hereditament file on EDRM.

8. Valuation approach

The basic function of a bus garage is the secure parking and day to day servicing of vehicles. Some garages may, in addition, be used for:
- the administration of bus routes including the collection of, and accounting for, fares received
- the provision of canteen and recreation facilities for employees
A bus garage is likely to be one of the following 3 types:

a) The larger purpose-built bus garages constructed prior to deregulation incorporating facilities for washing, garaging and day to day maintenance of single and double-decker buses under cover. The main area is used for garaging and a lesser area is equipped with inspection pits and workshops for bus maintenance. There will be smaller areas used as canteens and administrative offices. The garage and workshops may have wide clear spans up to 30 metres and a clear height up to 5.5 metres. Large steel shutter doors provide easy access in and out of the buildings for double-decker buses. The buildings are usually heated, with arrangements to clear exhaust fumes. All the floors of the garage and the workshop buildings are built to a fall throughout their length, with cambers across the fall to facilitate drainage. There may be considerable areas of raised pavement running for most of the length of the garage buildings to keep buses away from the structural supports. There is adequate space for the free circulation of buses in and out of the buildings but usually no extensive external parking arrangements for buses or cars, therefore the plot ratio is likely to be relatively high. Buses are parked undercover when not in use.

The main bus service and maintenance area is likely to be either (i) semi-basement construction, approximately 1.4m deep, with columns supporting the bus runways, and designed to allow simultaneous servicing of a number of buses; or (ii) have individual inspection pits set in the floor.

This category of garage is deemed to be sui generis.

b) Purpose built garages for generally (but not always) between 100 and 275 buses with open parking ( garages with uncovered bus parking space), covered maintenance and workshops area usually of steel frame construction, staff accommodation and ancillary offices and stores, diesel tanks and plant & machinery. The maintenance and workshops area will not be built to a fall throughout their length and there will be no cambers across the fall to facilitate drainage. The hard surfaced parking area will be drained, illuminated and fenced. Garages of this type are also sui generis and outside of London to be valued on a contractor’s basis. (see 8.1 below). Most larger bus garages will now be of this specification, with the older type town centre bus garages having been sold for redevelopment.

c) Bus garages of the adapted shed type - these non-sui generis bus garages may be simply defined as smaller garages, often situated on industrial estates, in units which have undergone little special adaptation.

These garages are likely to consist of an open area for parking of buses and employees’ cars, offices, staff accommodation, covered maintenance area with or without inspection pits, bus wash, tyre and general stores, diesel tanks and plant & machinery.

Even though the mode or category of use will be a bus garage, there is a good chance that rental evidence exists to show that bus garage operators have competed with other industrial uses in order to secure the tenancy. If it can be shown by evidence that the bus garage operator would be in the market to acquire standard industrial units at market levels, it will not offend rebus to import those rents. It is generally accepted this will be more applicable to smaller bus garages, often occupying non-purpose-built accommodation. (see Section 5 above).

8.1 Valuation methods

The basis of valuation will either be the rental/comparative method where evidence exists; or the contractor’s basis where the hereditament is, rebus sic stantibus, so different from other warehouses/commercial garages/depots that it may be regarded as “sui generis” and no rental evidence is available.

8.2 The substitute hereditament

Where the bus garage is a traditional old style sui generis garage, a substitute bus garage, in accordance with the rates per square metre and formula listed below, should be cost for Stage 1 of the contractor’s basis. The substitute hereditament will consist of the following buildings as are necessary for maintenance and cleaning of vehicles, accommodation for administrative purposes, staff amenities, storage and housing of plant. It should normally be assumed that in the substitute hereditament vehicles will not be garaged but parked on hard-standing of appropriate specification with kerbs, drainage, illumination, security fencing and gates. Planning requirements may dictate that within certain localities buses must be garaged within enclosed buildings and in such cases the substitute hereditament to be cost will include an enclosed garage. There may be occasions where the garage accommodates open top buses more especially in tourist areas. These buses will need to be stored undercover.

All bus garages built after 1995 are to be valued on the actual GIA areas and not on the basis of a substitute hereditament.

8.3 Components of the substitute bus garage

Calculation of the areas (to GIA) to be used for calculating the size of the substitute hereditament are as follows:-

8.3.1 Parking space (used for the parking of buses)

This is to be calculated on the basis of fleet footprint x 4. Fleet footprint is defined as the aggregate area of the total number of buses regularly stationed at each garage. A standard bus being taken to cover an area of 24m2.

The relevant date for the calculation is the AVD, subject to Material Change of Circumstances.

8.3.2 Workshop

This is calculated by multiplying the fleet number at the relevant date by 8.5m2. The fleet number is the total number of standard buses regularly maintained at the garage. Buses smaller or larger than the standard 24m2 are to be counted as a percentage of a standard bus size.

The relevant date for the calculation is the AVD, subject to any material change of circumstances.

8.3.3 Ancillary space

Ancillary space is taken to mean stores, plant rooms, amenity space, canteens, toilets, workshop, offices, paint shop, tyre fitting and body shop areas. The amount of ancillary accommodation required by the substitute hereditaments is determined by the size of the ancillary accommodation (all floors totalled) in use at the actual sui generis bus depot. Ensure all areas in use are included. This may include open areas located within the enclosed bus parking or workshop used for storage, spares etc.

The basis of measurement of the ancillary space is to GIA (Gross Internal Area).

8.3.4 Office space

For the purposes of this guidance note office means space within a purpose-built office block, within the curtilage of the sui generis bus depot.

The ground and first floor areas within the sui generis bus depot are to be added together. Such office accommodation is often used as a regional or headquarters office. For treatment of office space ancillary to workshop and other functions, see 8.3.3 above.

The basis of measurement of the office space is to be GIA (Gross Internal Area).

8.3.5 Land

The land area of the substitute bus depot is the total in m2 of 8.3.1, 8.3.2, 8.3.3 and 8.3.4 (ground floor only).

8.4 Contractors Basis: Stage 1 - ERC the modern substitute

Building Cost information is available in the VOA Cost Guide and in the Practice Note relevant to the Rating List under consideration. In the case of a comparatively modern hereditament the VO should always examine the actual cost data if available. The modern substitute hereditament to be cost at Stage 1 recognises roofed-over garage space is rarely required and consequently the substitute to be cost will therefore consist of open parking land, which is well surfaced, lit, drained and fenced and only such buildings as are operationally required for maintenance, administration and staff purposes. Where exceptionally roofed over parking is required - for example, for open top buses - a notional area of 30m2 per bus should be cost at Stage 1.

8.5 Contractors Basis: Stage 2 - ARC and superfluity

In order to arrive at adjusted replacement cost, it will be necessary to make deductions for physical and functional obsolescence. Superfluity is the one aspect of functional obsolescence not taken into account in this scale. The approach to valuation provides for this by a formula related to the size of the fleet as at the AVD which determines the size of the parking area and workshops to cost. No further adjustment for superfluity within the parking areas is required. In respect of superfluity in other parts of the hereditament, e.g. body shops, offices, staffrooms is recommended; it is for the Valuation Officer to establish whether superfluous accommodation exists and whether it merits allowance. This may be demonstrated where the areas in question are vacant at AVD with no intention on the part of the occupier to use in the future.

8.6 Contractors Basis: Stage 3 - site value

Bus garages do not generally need to be located in high value commercial areas, although there may be exceptions such as a hereditament containing a high proportion of office accommodation. In the majority of cases therefore it is anticipated that site values for bus garages will resemble warehouse/light industrial site values in suburban locations.

The selection of the site must have regard to keeping the “dead mileage” access to bus routes to a minimum. For this reason low-value sites in distant locations are unlikely to be a viable option for most operators.

8.7 Contractor’s Basis: Stage 5 - end adjustments

Stage 5 will involve the normal “stand back and look” exercise. For example it will be reasonable to consider any shortcomings in external vehicular access that may be sufficiently significant to justify an allowance.

8.8 Material changes

Where there are demolitions of neighbouring garages resulting in an increase in bus numbers the Valuation Officer should review the assessment - the material date being the demolition of the neighbouring depot. Similarly where there is the construction or redevelopment of a new bus depot within the immediate locality resulting in a fall in bus numbers the Valuation Officer will duly reconsider the situation.

Falls or increases in bus numbers due to route changes, bus company acquisitions or as a result of financial considerations are not normally considered to be a Material Change in Circumstances and are not normally a trigger for the VO to increase or reduce assessments.

8.9 Special cases

Closed hereditaments

These should be treated as follows: closure on AVD or earlier:

The valuation should take into account that no demand exists from the previous operator and should reflect only such other demand (if any), which may exist within the same mode or category of occupation.

New hereditaments created post AVD

No superfluity allowance is normally applicable and the ARC adopted should be the full cost of providing the hereditament at AVD levels.

Physical alterations post AVD

Where physical alterations result in a reduction in the operational capacity below the actual Fleet Number as at the AVD, the assessment should be reduced to a level consistent with the new operational capacity.

8.10 Exclusions from the modern substitute approach

The contractor’s basis/modern substitute approach does not apply to sui generis bus depots in locations, albeit rare, where adequate rental or comparable evidence exists.

Neither does it apply to purpose built modern sui generis bus depots - which are defined as follows:

8.10.1 Purpose built garages with open parking as defined in 8(b).

Though the contractor’s basis will be applicable at Stage 1 in the case of modern purpose-built bus garages, the actual hereditament will be cost (rather than a modern substitute based on the fleet footprint as adopted for the older traditional garages with the characteristics outlined in 8 (a) above).

8.10.2 Bus garages of the adapted shed type as defined in 8(c).

8.10.3 Smaller purpose-built bus garages, constructed prior to deregulation, which contain a few pits and can be valued by comparison with other garages of a comparable nature.

8.10.4 Depots or garages of any description for which adequate rental evidence exists.

8.10.5 Purpose built maintenance depots from which no buses actually operate.

9.Valuation support

All contractor’s-based valuations should be entered onto the non-bulk server using the dedicated bus garages spreadsheet. Valuations using the rentals method should be performed using the Rating Support Application (RSA).

Appendix 1: bus stations and bus garages

The Bus Industry and De-Regulation

In 1986 Britain’s bus industry was de-regulated. The 1985 Transport Act abolished the highly restrictive licensing system which had operated for 50 years.

De-regulation permits anyone to run a bus service anywhere except in London. Efficiency, since de-regulation, has increased. Department of Transport figures show that the average operating costs per vehicular mile have fallen by 36% in real terms since de-regulation (largely through reductions in wages costs). Local authority subsidies for bus services have more than halved from £465 million a year to £219 million at 1991 prices. High frequency mini bus services have replaced less frequent double deckers. Total annual bus mileage has risen by 19% since de-regulation, reversing a long period of decline. The number of passengers has declined, but this can be partly attributed to a reduction in the number of concessionary/free passenger journeys granted by local authorities. Outside London, the annual number of journeys has fallen by 19% since de-regulation. In the metropolitan areas, it has fallen by 26%.

In London, the routes are still regulated but London buses have to compete with the private sector for the exclusive right to operate them. More radical deregulation is awaited in London, where in spite of severe traffic congestion, bus use has actually risen since 1986.

Low levels of profit have generally left operators unable to replace old buses. The proportion of vehicles more than 12 years old has grown from 19% before de-regulation to 34% in 1992.

The competition legislation introduced by section 115 of the Transport Act 1985, which came into effect on 26 July 1986, also affects bus stations. Under this legislation it can be deemed to be an anti-competitive practice to operate a bus station in such a way as to deliberately exclude a particular operator with a view to reducing or preventing competition. The usual practice is for the predominant operator to admit other operators to its bus station where spare capacity exists and to apply a departure charge on these operators. These charges rarely cover the costs of operations at these locations but do make a contribution to offset the main operators’ overheads.

As a result of the privatisation of the National Bus Company and de-regulation, the organisation of the industry has changed from a preponderance of large operators, many of which were controlled by local authorities to a much larger number of mutually competitive smaller operators. This transformation had, outside London, already taken place by 1 April 1988. The re-organised industry has inherited garages/depots which were built to suit the requirements of pre-1985. As a result there have been marked tendencies:-

a. to closure of superfluous garages/depots. In Greater Manchester 24% of space has been closed since 1985. Some of those which have been closed have been completed relatively recently eg. Tameside (beacon No. 1 in VO Cost Guide), constructed mid-70s, closed November 1991

b. to smaller substitute buildings, often on industrial estates. Some of these premises have such little adaptation from basic sheds that they should not be regarded as sui generis and can be valued on a rental/comparative basis. But in some cases these newer garages retain the inspection pits and kerbs which justify sui generis status and in some instances planning considerations will also prevent the VO from using industrial/warehouse rental evidence. One particular feature emerges from the design of more modern garages/depots: it is no longer necessary to provide roofed space for parked vehicles. A well fenced, surfaced, drained and illuminated yard is adequate for this purpose. There are exceptions, for example, in built-up areas where planning restraints relating to noise etc could result in a continued requirement for roofed garage space.

Practice note: 2023 - bus garages

1. Market Appraisal

Following the spate of new building in the early part of the 21st century which was a consequence of the main operators selling off the sites of old central area facilities for redevelopment and relocating to more convenient and appropriate peripheral areas, the rate of development of new bus garages has slowed considerably. However, there is still occasional new build as demand determines.

Bus operators have continued to introduce new technology to their fleets in order to reduce carbon footprint. There are also examples of bus operators experimenting with biofuels, electric and compressed natural gas for powering buses. However, although electric power infrastructure may be incorporated into the design, to date there is no evidence to suggest that this has significantly impacted on the overall design features of new bus garages.

2. Changes from the last Practice Note

There is no departure from the approach to valuation and the principles adopted in respect of the 2017 List Changes are limited to the level of costs, land values and associated fees etc.

As in 2017, rental/comparison should be utilised where there is sufficient rental evidence in the locality. This is more likely to be appropriate within the London Region.

However it is important to be aware that there has been a change in the wording of paragraph 8.2 of VOA Rating manual Section 180: Bus garages such that whereas for previous Rating Lists all bus garages built after 1995 were to be valued on the actual GIA areas and not on the basis of a substitute hereditament for the 2023 Rating List valuation by reference to the actual GIA is to be restricted to only those garages built post 1/4/2015.

3. Ratepayer Discussions

None at present.

4. Valuation Scheme Where Contractor’s Basis Applies

The Costs shown in this section are for ease of reference. In all cases where a cost guide reference is shown that must be input into the NBS template, not the costs shown here. Where the cost guide code shows options, the costs shown in this practice note should be used to aid selection. Should the cost guide show differing costs to those shown in the current version of this practice note, please refer to the Class Coordination Team.

4.1 Stage 1 – Costs

The substitute bus garage is to be costed using the following rates:

Notes

a) Outside London it is assumed that the substitute bus garage will have one bus wash for garages with less than 100 buses and two bus washes for garages with more than 100 buses, unless the evidence suggests otherwise. In London two bus washes are the norm and hence two are to be included. The cost referred to above only includes a base, drainage and other ancillary work, together with plant housing, water recovery system and screens. Any building is to be cost separately. The cost guide should be referred to in regard to the cost of a drive-through wash unit.

b) It is assumed that the substitute bus garage will have 2 rotary screw compressors where bus numbers exceed 50 buses. Bus depots with less than 50 buses, one rotary screw compressor is to be assumed.

4.1.1 External Works

7.5% is to be added to the total ARC

4.1.2 Location Factors

Location factors are to be applied as shown in the 2023 VOA Cost Guide and for convenience replicated below at Appendix A.

4.1.3 Fees

Fees are to be applied in accordance with the 2023 VOA Cost Guide and for convenience replicated below at Appendix B.

4.1.4 Contract size adjustment

This is to be applied in accordance with the 2023 VOA Cost Guide and for convenience is replicated below at Appendix C.

4.2 Stage 2 – Age and Obsolescence

Adjustments for age and obsolescence should be made in accordance with the industrial building scales contained in VOA - Part 3: The contractor’s basis of valuation (https://www.gov.uk/guidance/rating-manual-section-4-valuation-methods) and for convenience shown below at Appendix D subject to:
- age and Obsolescence allowances applicable to surfaced land will be less (in accordance with the civils scale) as a general rule than those applicable to the buildings. However, the facts have to be considered in each case. For example where the modern substitute for the actual building is an open parking area, it is appropriate to apply the age related industrial buildings allowances (rather than the civils allowance to the substitute building open parking area) to reflect the obsolescence of the actual building
- in the case of buildings that have been significantly refurbished a lower allowance than that indicated in the scale solely by reference to the building’s age may be applicable, particularly where the works undertaken have enabled internal re-modelling to improve the functional aspects of the bus garage
- in all cases the actual age of the building is to be recorded for the purposes of determining the appropriate age and obsolescence allowance. When refurbishment has taken place the allowance and not the building’s age should be overwritten
4.3 Stage 3 – Land Value

Subject to the caveats in VOA - Part 3: The contractor’s basis of valuation (https://www.gov.uk/guidance/rating-manual-section-4-valuation-methods) it is anticipated that the land will be added for by reference to the appropriate industrial land value for the Billing Authority concerned as stated in the 2023 Land Value Practice Note. The area of land to be valued will be the actual site when valuing the actual hereditament but where a substitute hereditament is being valued then the land value will be calculated in accordance with the guidance set out in VOA - Section 180: Bus garages.

4.4 Stage 4 – De-capitalisation rate

The higher statutory de-capitalisation rate should be applied to the Effective Capital Value (ECV) to arrive at an annual equivalent.

Appendix A

Location Adjustment

N.B. The Regions referred to are administrative areas and are not significant boundaries.

Appendix B

The addition for fees

Fees should be added at the percentages shown in the VOA published Cost Guide at Section 7. For convenience these are shown below. Note that minimum fees may apply to counter inversion.

Appendix C

Contract size

The adjustment for contract size should be made having regard to the total ERC (after adjustment for location but before the addition for fees) in accordance with the following scales:

Appendix D

(Age/Obsolescence scale)

Notes Applicable to Industrial Scale:
- As noted above, the scale of allowances commonly referred to as “the Monsanto scale” (derived from the approach determined in Monsanto v Farris (VO) 1998 RA 217) continue to be applicable to Industrial buildings.
- The scales refer to the actual age of the specific item. A notional age can be adopted where the item has undergone significant improvement or refurbishment.
- The scales do not provide for physical obsolescence alone. They also reflect the expected degree of functional and technical obsolescence for an asset of that age.
- Any extraordinary functional or technical obsolescence may result in an additional allowance being considered. Examples include superfluity for modern purposes or where new technology evidences that the actual asset is relatively inefficient. Where an additional allowance is made the reasons for it must be stated in the valuation notes.
- An element of risk of failure and the requirement of the tenant to replace the item at the end of its useful life is incorporated in the allowances.
- It should not be automatically assumed that because a property is old it merits an allowance. Age in itself is not a disability but rather what often flows from age.
- The scales are intended to provide a degree of uniformity of allowance. They should be regarded as the maximum allowances to be given.
- The scales should only be used as guidance in accordance with the principles outlined in the Rating Manual.
- Allowances in excess of 50% for buildings or P and M should only be adopted in exceptional circumstances. It is unlikely that many very old buildings exist which have not undergone some form of modernisation or refurbishment. Where a building or piece of plant has obviously not undergone refurbishment or modernisation at some stage it is permissible to give allowances up to a maximum of 65% as indicated in the scales (below).
- Allowances may be up to 50% higher from those shown in the scales for structures which are of a temporary nature and have continued in use well beyond their intended life span.
- It should not be assumed automatically that because an item of plant or machinery is old it merits an allowance. If an asset is well maintained the amount of use may well not affect the item or its value. However, with age the risk of breakdown is likely to increase and functional and technological obsolescence factors are likely to become prevalent. These factors must be borne in mind when selecting an appropriate obsolescence allowance.
- The scales of allowances therefore take into account the average use of items over a period of time, bearing in mind the physical, functional and technical obsolescence that may occur during the stated period.
- Where judgement through actual knowledge of the item is inconsistent with the allowance scales the item should be valued accordingly recording the reasons for the divergence from the scale.
- In any instance of variation from the scales in accordance with these instructions, the reasoning for this must be recorded in the valuation.
Practice note 2017: bus garages

1. Market appraisal

The largest bus operator in Britain is the Scottish-based FirstGroup. After a period of building new garages between 1995 and 2008, this activity has now slowed. In June 2013 most of the group’s First London bus operations were sold to Go Ahead London, Metroline and Tower Transit.

Stagecoach is another major operator which in addition to providing local bus services runs a range of express coach services across the UK.

Arriva complete the picture of the “big three”. Arriva is Europe’s largest transport provider. Based in Sunderland the company became a subsidiary of Deutsche Bahn in 2010. Arriva are also active in Greater London.

On a smaller scale, Go Ahead Group are also an active player in the market, originally formed in the North-East in 1987 it has since expanded across the UK.

Since the last rating list, all bus operators have continued to introduce new technology. For example, Arriva have introduced a dynamic throttle controller that automatically adjusts the rate of acceleration, which helps reduce emissions and regulates fuel consumption. There are also examples of bus operators experimenting with biofuels, electric and compressed natural gas for powering buses.

There is no evidence to show that the design of bus garages has changed since 2008.

2. Changes from the last practice note

There are no changes (other than costs) from the broad principles followed for the 2010 List and the approach therefore remains the same as for the last list.

3. Ratepayer discussions

None at present.

4. Valuation scheme where contractor’s basis applies

The Costs shown in this section are for ease of reference. In all cases where a cost guide reference is shown that must be input into the NBS template, not the costs shown here. Where the cost guide code shows options, the costs shown in this practice note should be used to aid selection. Should the cost guide show differing costs to those shown in the current version of this practice note, please refer to the Class Coordination Team.

4.1 Stage 1 - Costs

The substitute bus garage is to be cost using the following rates:

Notes

a) Outside London it is assumed that the substitute bus garage will have one bus wash for garages with less than 100 buses and two bus washes for garages with more than 100 buses, unless the evidence suggests otherwise. In London two bus washes are the norm and hence two are to be included. The cost referred to above only includes a base, drainage and other ancillary work, together with plant housing, water recovery system and screens. Any building is to be cost separately. The cost of a drive-through wash unit would be an additional £35,000.

b) It is assumed that the substitute bus garage will have 2 rotary screw compressors where bus numbers exceed 50 buses. Bus depots with less than 50 buses, one rotary screw compressor is to be assumed.

4.1.1 External Works

7.5% is to be added to the total ARC

4.1.2 Location Factors

Location factors are to be applied as shown in the 2017 VOA Cost Guide.

4.1.3 Fees

Fees are to be applied in accordance with the 2017 VOA Cost Guide.

4.2 Stage 2 – age and obsolescence

Adjustments for age and obsolescence should be made in accordance with the industrial building scales contained in Rating Manual section 4 part 3 - subject to the following

Age and Obsolescence allowances applicable to surfaced land will be less (in accordance with the civils scale) as a general rule than those applicable to the buildings .However the facts have to be considered in each case. For example where the modern substitute for the actual building is an open parking area, it is appropriate to apply the age related industrial buildings allowances (rather than the civils allowance to the substitute building open parking area) to reflect the obsolescence of the actual building.

In the case of buildings that have been significantly refurbished a lower allowance than that indicated in the scale solely by reference to the building’s age may be applicable, particularly where the works undertaken have enabled internal re-modelling to improve the functional aspects of the bus garage.

In all cases the actual age of the building is to be recorded for the purposes of determining the appropriate age and obsolescence allowance. When refurbishment has taken place the allowance and not the building’s age should be overwritten.

4.3 Stage 3-Land Value

Subject to the caveats in the Rating Manual section at 8.6 it is anticipated that the land will be added for by reference to the appropriate industrial land value for the region concerned as stated in the Land Values Practice Note. The area of land to be valued will be the actual site when valuing the actual hereditament but where a substitute hereditament is being valued then the land value will be calculated in accordance with the Rating Manual at 8.3.5.

4.4 Stage 4- De-capitalisation rate

The higher statutory de-capitalisation rate should be applied to the Effective Capital Value (ECV) to arrive at an annual equivalent.