Report on Statements of Rate Levy and Collection 2009-10 and 2010-11

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Executive Summary

1. Land and Property Services is responsible for the billing and collection of rates on approximately 840,000 properties in Northern Ireland. Over £1 billion was raised in rates revenue in 2011-12. The Comptroller and Auditor General provided a qualified audit opinion on the Rate Levy Account 2010-11, and his report covered a number of important issues.

2. There is a significant backlog of valuations waiting to be completed by LPS. Although this has been reducing over the past number of years, it is still a significant number. At 31 March 2012 over 26,000 cases were outstanding, the largest category being domestic alterations which took, on average, over two years to process.

3. LPS also administers the various reliefs and allowances associated with the rating system which amounted to over £190 million in 2011-12. Over £67 million of this relates to vacancy relief. Although LPS is working with a number of local councils across Northern Ireland to verify the accuracy of vacancy exemptions awarded, more needs to be done. The Committee strongly believes that co-operation should soon be extended to all councils.

4. The level of fraud and error in the housing benefit administered by LPS is significantly higher than is the case for other public sector bodies administering benefits in Northern Ireland. Approximately £4.2 million of fraud and error is estimated to be included in the 2010-11 financial statements. The Department acknowledges that its performance is poor in this area, and the Committee welcomes that candid attitude. However, LPS has not set targets to reduce the level of fraud and error.

5. The level of rate debt has almost doubled in the last five years, rising from £88 million in 2006-07 to £160 million in 2011-12. Since 2008-09 £53 million of rate debt has been written off. Whilst the current recession has had an impact, LPS should explore all options to rigorously pursue these outstanding rates. The Committee considers that DFP should evaluate the effectiveness of LPS debt collection.

6. The Committee is acutely aware of the financial pressures currently being faced by rates payers, particularly small businesses in the retail sector. It is important that LPS ensures that the rates burden is distributed equitably. Where there are delays in making assessments, reliefs are incorrectly awarded, or debt is not collected this may result in increased rates bills. It is imperative that those paying rates are not subsidising those who should be paying but are not.

7. LPS faces a number of challenges in the next few years. Welfare reform, non-domestic revaluation and the changes that the Review of Public Administration will make to Local Government will all impact on the work of LPS, and it needs to be well prepared and plan early to meet those challenges, particularly given the significant difficulties experienced when major reforms last occurred

Download the full report here