Schools: Will Your Rates Reflect the High Cost of Heritage?

Schools: Will Your Rates Reflect the High Cost of Heritage?

For schools, having listed buildings can add to a sense of prestige and historical heft. However, listed buildings come with their own set of challenges when it comes to upkeep, refurbishment or a change of function.  Two property experts, Paul Giness, of The Beattie Partnership, and Gail Stoten, of Pegasus Group, discuss whether the high cost of heritage is reflected in a school’s rateable value?


Maintenance and Refurbishment

A key area for schools when it comes to business rates valuations is the refurbishment and the cost of upkeep. Schools that occupy listed buildings are particularly prone to these kinds of costs.

The main criteria for listed buildings are: architectural interest, historic interests, close historical associations with important events, and collective value – where buildings form a group that has a unified historical value.  However, with independent schools they also have to be perform functioning and effective teaching and boarding accommodation.

“Maintenance costs can be high.” comments Paul.  “This can involve more administration in terms of preparation, planning and cost.  Moreover, much of this work is in no way optional.”

“Owners have a duty to maintain listed buildings and schools are no exception to this,” explains Gail.  “Listed
buildings, along with conservation areas, can be constraints to new construction or alteration projects.”

Whereas independent schools may count listed buildings as an asset in terms of their academic image, they can require a great deal of care and attention to maintain, and their listed status may restrict the uses to which they can be put.


The Question of Rates

If some schools are facing big refurbishment bills and ongoing challenges connected with the upkeep or conversion of listed buildings, what are the chances of these expenses being offset by a rates reduction?

If the entire site being refurbished were listed, then it would be simple because vacant listed properties are exempt.  If the building forms part of a larger non-listed site, then exemption will not be automatically granted.

Paul points out that since the recent Newbigin (VO) v Monk case, the assumption is no longer there that a building can be taken out of rating if it is undergoing refurbishment, if the Valuation Office (VO) deems this work to be categorised as “reasonable repairs”.

“There’s a big question mark hanging over it,” Paul says. “There is also the issue of whether repairs are seen by the VO as “economical” or not.”

In the case of schools with listed buildings, typical refurbishment and connected expenses can be higher than normal.  These could be up to twenty per cent, according to Funding for Independent Schools magazine.  This might beg the question of whether they are economical, or reasonable; particularly if they are, in effect, compulsory.

There is uncertainty over rateable values, regarding listed school buildings.  This is something Paul and his team are eager to investigate further.