Client: Universities UK
All UK universities are reassessed for rating purposes at each five yearly rating revaluation. To ensure a consistency and fairness of approach across the sector, the higher education representative body, Universities UK, negotiates a valuation framework in the form of a Memorandum of Agreement, with the Valuation Office Agency. Gerald Eve has represented Universities UK for many years and has most recently been involved in securing an agreed basis for the 2005 revaluation.
The solution
Universities are mainly valued on a contractors basis which references build costs as the primary information source for calculating values. Faced with building costs that appeared to have risen sharply, our education team collated a database of over 140 new schemes built by universities to better understand the intricacies of each construction project. Many are built under difficult circumstances, for instance on constrained sites, or a particular scheme might have a unique specification, which inflates construction costs for universities over and above levels that might be appropriate to adopt for rating purposes.
By analysing the information, we were able to illustrate that the headline figures suggested by the evidence did not accurately reflect true build costs. We were also able to establish a substantially more favourable treatment for older university buildings and managed as well to limit increases that had been proposed for land values.
Results
By bringing to bear our experience in advising over 40 universities on rating matters, we have been able to deliver an agreed valuation framework for the 2005 Revaluation with major benefits for the sector. We estimate that even before any rating appeals were settled, the Memorandum saved the higher education sector over £20m over the 2005 revaluation period.
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