 Beat it! Good morning and welcome to the 16th meeting of the Local Government Communities Committee in 2019. Can I remind everyone present to turn off their mobile phones? We have apologies here from Alec Roiley. Agenda item one is consideration of whether to take agenda item five in private. Are we all agreed? Thank you. Is consideration of a statutory instrument that modifies various aspects of schedule 1 o'r llwyddon hwn, Tenancy Scotland Act 2016. The committee will take evidence on the instrument today, and I welcome Kevin Stewart, Minister for Local Government Housing and Planning, Linda Leslie, head of private rented sector policy and Kirsten Simonaeth Le Fevre, principal legal officer of the Scottish Government. This instrument is laid under affirmative procedure, which means that the Parliament must approve it before the provisions can come into force. Following this evidence session, the committee will be invited at the next agenda item to consider the motion to approve the instrument. I invite the minister to make a short opening statement. Convener, I'm pleased to be at the committee this morning to present the private housing tenancies Scotland Act 2016 modification of schedule 1 regulations that, if approved, will modify schedule 1 of the private housing tenancies act 2016 to safeguard models of housing for veterans and care leavers. The new private residential tenancy replaced short assured and assured tenancies. The underlying principle of the new tenancy is to improve security, stability and predictability for tenants and to provide appropriate safeguards for landlords, lenders and investors. New tenancies granted in the private rented sector on and after 1 December 2017 are private residential tenancies unless they are listed in schedule 1. Schedule 1 lists the type of tenancies that cannot be private residential tenancies. I would like to thank the Scottish Veterans Garden City Association for first raising the issues with myself and Graham Day, the Minister for Parliamentary Business and Veterans, and for their continued support in working closely with my officials and others to find a workable solution to the current issues, which include automatic succession rights for tenants who are not disabled veterans and restricted turnover of temporary accommodation. My officials, with the support of the SVGCA, other veterans groups and the Coalition of Care and Support Providers consulted with other charitable organisations in the sector to identify the size and scale of the problem. They identified one other service model used by Barnardo's, a registered private landlord with charitable status. Barnardo's provides temporary accommodation with support for care leavers until they are able to move into their own home to live independently. They agreed the need for the amendment to enable them to continue to provide this model of support to care leavers. The proposed regulations modify schedule 1 of the act to ensure that private residential tenancies cannot be granted where a charity provides accommodation to veterans or temporary accommodation to care leavers. There is nothing in the amendments to prevent Barnardo's from offering a private residential tenancy where permanent accommodation is more suitable for a care leaver. Finally, I would like to add some reassurance for the committee. Charities have told us that they are still likely to use the model tenancy agreement from the private residential tenancy as best practice when offering permanent or temporary accommodation. Those regulations will provide the flexibility for them to adapt the model to suit their charitable purpose, and I am happy to answer any questions on the instrument. Does anybody have any questions for the minister? Thank you very much, minister. I wonder why those exemptions were not incorporated in 2016. Mr Wightman, on many occasions we try to cover all bases. Sometimes we do not do that, and it was not until a meeting in October of last year that Mr Day and I found that there were some difficulties or could be some difficulties with the veterans organisations. We moved swiftly to try and resolve that, and at the same time we did a piece of work to see if there were any other organisations where there may, in future, be difficulties. That is when we found out that Barnardo's were in a similar position with some of the housing that they operate. We have moved quickly. We have worked with the organisations. We have only found those two anomalies. If we had found them previously or been told about them previously, they would have been in schedule one at the very beginning. Okay, thanks. The instrument refers to charities providing accommodation to veterans or charities providing temporary accommodation to care leavers. What about organisations that are not charities that do those things? There may be none of them, but if there were a social enterprise providing accommodation to veterans, they would not be covered. I am not aware of any such organisation acting as a social enterprise rather than a charity. However, if such an organisation were to come forward, we would look very closely at that situation. Obviously, in all of those cases, convener, we have to consider exactly what the situation is. We are not aware, and I think that it would be fair to say that Ms Leslie and her team, as always, have done their level best to try and seek out any other anomalies so that the reason for making the reference specifically to charities rather than just organisations providing accommodation to veterans was because those who provide that accommodation are in fact charities. Yeah, I will bring in Ms Leslie because she has done most of the running in all of that. Thank you. Yes, that is exactly the case. We are not aware of any other type of organisation that provides that kind of accommodation other than registered social landlords, which are obviously not required to use the private residential tenancy anyway. That was a particular group of organisations that, as the minister said, if we had had representation while the 2016 act was going through the scrutiny process in Parliament, we would have added two schedule one. It was specifically around the issues of undermining the charitable objects of those organisations that raised their concerns. Ah, so the concern was as much to do with undermining the charitable objects as it was to do with the veterans and the care leverage needs. Correct. That is why you have made explicit reference to charities. Yeah. Thank you. Right, thank you. Any other questions? In that case, I move on to agenda item 3, which is formal consideration of motion S5M-17292, calling for the local government and communities committee to recommend approval of the draft private housing tenancy Scotland act 2016, modification of schedule 1 regulations 2019. I invite the minister to speak and move this motion. I'll just formally move, convener. Thank you. Any contributions from members? In that case, I take it that you have nothing to say in sum up. No, convener. The question is that motion S5M-17292, in the name of the minister for parliamentary business and veterans, be approved. Are we all agreed? Thank you. That is agreed. The committee will report on the outcome of this instrument in due course and I invite you to delegate authority to me as convener to approve a draft of the report of publication. Thank you. I now suspend briefly to allow a witness change over. Thank you. Thank you, minister. At agenda item 4, the committee will hold its second evidence session on a non-domestic rate Scotland Bill at stage 1. I would like to welcome from the Scottish Successors Association Ian Milton, president, Alasdair Kirkwood, vice president, Jim Doig, chair of Public Buildings Committee and Heather Honeyman, project manager for non-domestic rates reform implementation. We will move straight on to the question from myself, which is, do you think that the bill is drafted along with the early measures implemented by the Scottish Government sufficiently address the findings and recommendations made by the Bartley review group? We would like to start on that one. Thank you, convener. If I may, the bill does sufficiently address the findings of the Bartley review group. Yes and no, I think it's going some way towards that. So to a degree, yes. It certainly introduces more frequent revaluations on a three-yearly basis, so that is an excellent move forward in my view. It means that we are going to have rateable values at a more aligned to market markets, which will meet occupiers' expectations and understandings. In that regard, that's a very good move. The bill, however, does not go quite as far as in some aspects we would look for, but that does not necessarily mean that it will not go there at the end of the day. We feel that the bill certainly is moving in the right direction. The key area, apart from more frequent revaluations, is the main issue for us is information. Information for assessors is absolutely critical. We cannot assess properties unless we have absolutely accurate and complete information about the properties. That does not just mean the physical circumstances, but it also means the letting, the costings and also the relationships between the occupiers or interested parties in a building, which can be quite complex now. The information powers that the bill introduces go some way towards achieving that, but they do not go as far as we think is necessary to ensure that we get our job done. Would you or one of the other witnesses like to expand on that in terms of what's lacking in terms of gathering information? As Mr Milton has said, the bill certainly moves things in the right direction. However, for us to be able to achieve the three-year revaluation cycle, it is key that we have the right information at the right time. It is not just about making sure that that return is comprehensive and understandable so that we can get the right valuations up front. Therefore, if the valuations are more accurate, that would hopefully result in reduced appeals. The move to civil penalties for non-return of information is welcomed. However, in the view of the SAA, it would also be helpful not to appeal section 7 of the 1854 act, which retains the criminal penalty, as having the two strands would hopefully help to ensure a comprehensive return. However, for us, information is key to getting accurate valuations and also making the process streamlined. What is missing in terms of helping you to get information? You say that they have moved on, but they have not moved far enough in the bill. What is missing that, if it was put in, would allow you to get the information that you require? As it stands at the moment, we ask for information, but it is the enforcement of returning the information. As I say, there are moves through the bill to improve that situation, but it is making sure that it is taking to the point that it is almost not an option not to return, because it is necessary for us to get the information in and it is also necessary for us to get the right information in. As things stand at the moment, we ask for information, but we have a low percentage of return in some areas, which then results during the appeal process, which is some way down the line from the original valuations being presented. It can result in reduction to rates per square metre, for example, which can then undermine the original valuation and result in appeal loss, which could have been potentially avoided had the information been submitted at the start of the process rather than later on. It is about having full presentation of the information at an early point. Often returns as well can be incomplete or the information is given to us in a way that it is difficult to analyse. The only thing that you think is missing is that the legal penalties are still being in place, as well as the civil ones? Yes, that would certainly help. It is also making it more challenging to avoid returning the information. That is the goal. Bina, if I may, there is also one element of the bill at section 14 of the bill, if we get down to specifics, because I think that it is maybe specifics that might help indeed. At present, it is anticipated that the powers given to the assessor will be those that to request information that the assessor may reasonably require for the purpose of volume the lands and heritages referred to in the notice. To me, that is far too narrow. One of the big issues for me and all assessors is that we are going to have to do this revaluation every three years. Every 36 months, we are going to have to refresh our values. We are only going to have about 8 to 12 months to actually do that work from the tone date once we move to a one-year tone. We need the information to come in very quickly indeed, but we also do not want to be restricted to only asking for information that will allow us to value that particular property, because a lot of our properties, for example, are valued by reference to costs. We use unit costs and we analyse costs. At each revaluation, we will already have a valuation roll with a quarter of a million properties already valued in it. At the next revaluation, two years into the last revaluation, we will be wanting a refresh of that data. We might be wanting that information for a property that we have already valued, but it will inform our next revaluation. We really need a power to reasonably request information that is reasonably required to fulfil our statutory duty to maintain valuation roles. If it is just a case of asking for the information to enable us to value that property, then that is not sufficient for us to do our job. Not only are we looking at cost and rental information, but, as I mentioned in my opening statement, there is also information about relationships of who has what interest in property. That has become very complex with management agreements and the way that complex industrial energy and many lands and heritage are now delivered to an occupier or a user. Whoever appears to be the user of the property might not be in law the proprietor or occupier that we have to identify and value. That gets down to the unit of valuation that we need in that detail. Often that is tied up in confidential agreements that are marked confidential and often are not disclosed to us when we need them to update the valuation roll. If that information is provided at a later date, we cannot wind back to the valuation roll and make the right entry beyond the current year. There is a serious issue here of making sure that we have access to all cost, rental and occupational relationship information about properties. I realise that that is a very wide power, but it is one that we need to do our job properly, provided that there are checks and balances, as anticipated, where the request has to be reasonable and has to be reasonably made. It is worth building on what Mr Milton said. The one-year tone date on a three-year revaluation will make it extremely difficult for us to get information in when we need it. One of the issues, potentially, with the civil penalties, is whether there is a property and not in the valuation roll that we are needing information on. The civil penalty would only give us a maximum of £500 because there is no valuation roll entry at that time, so there is less incentive there to get that information back. Does it benefit people who are not giving you information to not be in the valuation roll? Is that what you are saying? Potentially, if we are dealing with a really big complex industrial property or something that is a multi-million pound or a £500 civil penalty, it is really neither here nor there. I will let Mr Curtwood in and then back to you. Thank you. It was used to bring it together into three fundamental points in answer to your question. The first request that we would have in relation to information gathering is the wider powers, as Mr Milton mentioned. The second issue is penalties and the extent of those penalties and the precise circumstances in which they apply. The third element is the timescales in which responses might be made to the information request. It really brings those three things into that element. I will be happy to go into the issue of penalties in greater detail, if you wish. There are a number of points. I am sure that there might be an opportunity later on, but I would ask that we have quite a lot to go through. Do you feel that everybody has to respond if they do not particularly have anything that they want to say? Timing in the bill is proposing 56 days for the return, and it is quite a long period of time given the timetables that we have touched on. What would be your favourite timescale? A timescale of around 28 days would seem more reasonable, given the three-year revaluation cycle that we are trying to move to. Andy, you wanted to come in at this point. Yes, thanks. I have a few questions, but I just wanted to pick up first on Ian Milton's observations regarding the potential difficulties in obtaining information from complex properties. It used to be the case that rates were split. There was an owner's rate and an occupier's rate, which was up to the 1960s. Is there an argument if some properties have become very complex in terms of identifying who the real occupier is in going back to just living rates on the owner? The owner is much easier to find out, and it is then up to them to apportion that if they wish to occupy tenants, management companies, etc. That is an interesting point that I had not explored at all. The complexities arise with particularly large sites where there may be an energy module that is under a management agreement or a design and build and supply agreement and maybe a processing unit or a manufacturing unit. That is where it gets quite complex. Even the ownership details can become quite complicated. The idea of moving away from occupier's rates to owner's rates is a major fundamental strategic shift that I would suggest in taxation, and not something that I would really explore for the purposes of this meeting. On those complex sites might there not be a case—I am just exploring the possibilities here—a case for having a default power in the event that it is difficult to ascertain the occupier, that you have the power to levy the rate on the owner, who, in any plant, is always easy to find out because they will be registered in the register of Scotland, so the owner of the land is easy to find out. In that regard, it could be a resilience point of fallback, so that you could have, if you wanted, a fallback position where information was difficult to obtain as to precisely who is in rateable occupation of which element of subjects, then you could fall back to the owner. That would ensure that the valuation rule was complete and that you would have the property assessed. That would open up arguments and questions on unit evaluation, so you would have to start to look at precisely how that is going to sit comfortably in the current legislative framework, but I suppose that the principle is there. I want to talk about parks, but before I do, I am just wondering as a matter of professional best practice. If the Government took a policy decision, for example, to exempt graveyards from rates, I think that graveyards pay rates at the moment, do they? They are certainly assessed. They are assessed, yes. However, let's say that they took a graveyard and said that they should not have to pay any rates. Is it good practice to exempt them from the role or would better practice be to have them on the role and subject to relief, just as a matter of good practice? The position throughout the association's involvement in consultation responses, going back to supporting business and promoting growth consultation in 2013 and a more recent consultation response last year, has always been that if you have a complete role, all lands and heritage is entered into the valuation role, then you have complete transparency and clarity as to what the landscape is in terms of valuation. It is up to the Government, no doubt, local or central, to decide how they want to use their levers, their economic levers or whatever other strategic objectives they have to grant reliefs. At present, we have a mixture of relief and exemptions. We have made reference to that in our response to the Government consultation last year and also in 2013. Rural ATMs, for example, or exempt, agricultural land, as you know, and many other subjects. There are gaps in the valuation role at present that introduce an element of opacity to the overall lands valuation assessment process. As a matter of principle, would the Scottish Assessors Association agree with recommendation 28 of Barclay that all property should be entered on the valuation role, excluding public infrastructure? Our position is that it is easier to value everything than to be selective. If you have got everything in the valuation role, you have got a much more clear situation. That would also go there for recommendation 29, which was the large-scale commercial processing that just happened to take place in agricultural land. It was exactly the same as that taking place in a food park should be rated due, as a matter of professional best practice, to want that on the role and to make a policy decision as to why farmers making ice cream should not pay rates, but some other business making ice cream should. The position is that, from a transparency viewpoint, it is much better to have a complete valuation role with all lands and heritage that is shown in it. That gives the opportunity then to policy and government to decide precisely how they want to implement the local taxation, the distribution of rates according to our assessments, granting reliefs or otherwise through their process. Others are free to come in, and you are all representing in some way the Scottish Assessors. That brings me on to parks. I have to confess that I am a little bit confused about the whole provisions here. In the Barclay report, they said that all public parks are exempt from rating and there are no plans to change this except where commercial activity takes place. Has I understand that the provisions on the bill are to try and bring into the rating system those parks or parts of parks where commercial activity is taking place? Is that a fair summation of what is being attempted? Yes, that seems to be. It is the definition of commercial activity. Not all public parks are exempted at the moment. They have to fulfil specific criteria, but yes, the move in the recommendation in Barclay was to broaden that and bring in commercial activity. The bill, as it stands, when you actually look at the parks that are out there, could potentially bring in more than was envisaged, depending on what the definition of commercial activity is. As the bill is proposing at the moment—or what the bill is proposing at the moment—could bring in various types of subjects and is also potentially a little bit unclear around the unrestricted use. For example, the public parks that are out there and are potentially exempt at the moment might have, within them, trampoline areas or putting green areas where customers have to pay to get on those areas of the park. Is the direction of travel suggested that that area would be in the role, but the remainder of the park that was not charged to get into was exempt, or is it that the whole park should be in, because there is part of it that has unrestricted access? There are also, at the moment, buildings that are considered ancillary to the park, which would also be exempt. The proposals in the bill at the moment would suggest that those would come in. There would be bowling clubs, sports clubs that would potentially enter in the role, because they are not in the occupation of the local authority. It is also thinking around a park in terms of what is a park. When you think about how you think of your green area, parks can also extend to other types of subjects, such as golf courses, bowling greens, sports-type areas or recreation ground. It may not be what it first brings to mind as a public park. There are many properties that are exempt at the moment, and the proposals will have the effect of bringing those into the role. They may, at the end of the day, be subject to rates relief, but they would be included in the role. That is a similar point. They might be subject to relief, but they will be on the role. Anderson Barkley highlights the fact that St Andrew's links courses are exempt from rates because the land is classed as a public park. It is owned by a trust, but it is a commercial operated golf course and other golf courses pay rates. Is there a problem with section 3 or 4? You highlight in your evidence that it is not clear from the bill how assessors should deal with local authority parks where part is open for free and unrestricted actors and part is not. Getting back to my previous line of questioning, I would not be better to bring all of them onto the role and deal with what is rateable and what is not rateable by secondary legislation so that you can adapt to the kind of circumstances that are changing all the time. There are proposals in Edinburgh over the Ross bandstand to turn it into some kind of commercial venture. Parks and their use are changing all the time in terms of the occupation and use. I completely take the point that you are making, and assessors would respond to what the legislation stated. However, what we need around us is clarity. As the proposals stand at the moment, as I mentioned before, around unrestricted areas and then unrestricted areas, what we would need is clarity, so that it would allow us to be consistent in our approach to our task. I have some other questions on dwellings and things. I think that I will come back to that later. A simple and straightforward question. If everything is added to the valuation role, what would be the resource implications in terms of staff and cost? The issue has been one that has exercised our mind over time in our responses that we have made. We are very conscious that it would impact on us. We have recent experience of adding the shooting rights to the valuation roles and deer forests to the valuation roles, and that significant commitment of resources was required. We are no stranger to that task. The lessons that we learnt from that were very useful. One of them was that the information that we receive—again, we need the power to get that information, not just to value that subject, but to value the category of subjects. We also need to get good quality information, and that is where the real challenge comes, particularly when you move into agricultural holdings. If you look at agricultural holdings, for example, there must be between 20,000 and 30,000 agricultural holdings in Scotland from the top of my head. The Scottish Government, I would imagine, would have considerable data on that, but it is the quality of that data and whether it will meet providers with the information that we require. We certainly found that, when we embarked on the shooting exercise, the information that was available to us did not meet our expectations at the time. As a result of that, it was quite a resource-intensive process. Any job of adding another category of properties to the valuation role will have a resource implication, but I am afraid that I cannot put a precise figure or some on it. However, it is certainly not impossible to do, but there would be a cost. One of the things about the NDR bill that we are considering today is that resource issue. We can obviously speak to that. There are financial resources, but there are also expertise, and there is a limited pool of that expertise—that rating expertise—in Scotland. That is why I asked the resources in terms of staff. People think that there are financial resources, but you have to have trained individuals to be able to do that work. If we have a sudden change where there is a huge increase in the number of properties that we have valued, it would put a significant strain on the number of people who have available to do the job and the level of experience that they have. I would imagine that there is some time to get everyone up to the level that they would require if there was that step change. Certainly. We have a real challenge on our plates just now in gearing up for this 2022 revaluation and then delivering three-year revaluations after that. There are some huge pinch points there, such as the proposals on the appeal system, which we might come to. However, the point about expertise is a really critical one. We are working with education providers to see whether we can find ways of bringing more expertise into the market. Generally, the direction of travel has been for universities in Scotland to be reducing the output of what we call cognitive graduates, graduates of surveying degrees or estate management degrees, who we would then train up to professional qualification standards. We want to reverse that trend, but we need to do it in a very short timeline to deliver three-year revaluations. There is quite a bit of inertia in the system, I would say. For that reason, we are looking at trying to bring in school leavers and look at apprenticeships and things like that as well. There is quite a lot of work being done in that sphere just now, but it does not get away from the fact that if you say that we want to increase the size of the role by 20,000 to 30,000 subjects for the next revaluation, that would be a real hard-ass to deliver on. Looking further ahead over time, it is certainly doable, but we would need to build up on expertise. You have stated on your submission that it is important that resources are maintained. I mean, it would just have a significant increase when the bill comes in and then a reduction over years, but can I ask what the age profile is for assessors? Is there an issue about over the next few years the number of retirees or the number of people going to retire, I should say, exceeding the numbers that are coming in at the moment or is there a balance or is it growing? You have talked about apprenticeships, etc. How do you feel about things at the moment in terms of the human resource that you have available and are likely to have available the next five to ten years? I think that we have a real serious challenge. I do not have figures on the demographic profile of our services just now, but I know, for example, that my own experience trying to recruit a charter surveyor in Aberdeen. I got one applicant for the job after two periods of advertising online and in the media, so that does not bode particularly well unless it is just the location or the employer might be an issue, but, apart from that, it is a story that has been repeated across Scotland that it is very difficult to recruit. It is also very difficult to hold on to your qualified staff. Once we have invested five years training someone up and they have got professionally qualified, because of the demand that regular evaluations will create for rating consultants to advise rating occupiers or occupiers of property that we have a significant brain drain into the private sector because we provide such an excellent training environment. That is a further challenge to us, and that will inflate wages, which is very difficult to manage in a public sector environment, where we are obviously very conscious of the resources and so are our councils who fund us. Thank you very much for those comprehensive answers. Just really following up on that, the impact on you moving to a three-yearly revaluation. Have you actually assessed how many extra staff will be needed across Scotland? Yes, we have. We provided input to the Scottish Government and to COSLA in relation to the preparation of the financial memorandum. If I just turn to the financial memorandum just now, the estimates that we provided were based on our understanding at that time. Our first estimate in September was reasonably sketchy, I suppose. Over time, we have managed to, to February, form a better understanding of what the NDR reforms mean on the ground. That has informed the information that is in the financial memorandum. We are talking about an estimated 122 additional personnel. Around 50 per cent of those will be trainees, 20 per cent qualified surveyors and 30 per cent IT and support staff. We see that we will have to gear up with the information powers to support staff to ensure that we get the information coming in and manage that properly, but we also need the expertise. One of the things that we are going to have to do is, as has been acknowledged in a policy document, is that, in the past, we have always dealt with things sequentially. We have done a revaluation and then the staff that have done the revaluation have gone on to deal with the appeals, resolve the appeals and then three years later they are back on to revaluation tasks. Now, instead of a sequential approach, we are going to have two teams, one team dealing with revaluation all year round full-time and another team dealing with dispute resolution proposals and appeals. In that regard, we have done some work, but the work that we have done and the figures in the financial memorandum must be seen with the caveats and assumptions that we have made and our knowledge as in February. For example, one of the caveats that I do not think is mentioned in the financial memorandum is that we are assuming a 25 per cent reduction in appeal volumes and that is built into our figures. The other thing is that there is no funding allocation or estimate for the additional costs that designated assessors will receive in relation to public utilities and also the impact of asynchronous revaluations compared to the other jurisdictions in UK. There are some other gaps in the estimate that are difficult to fill at this point in time. So that 122 figure, that takes into account three year revaluations, a new appeal, pre-appeal, mechanism, everything, but you are obviously saying that it cannot be wholly accurate. No, in relation to the proposal and appeal system, it is based on our understanding at that time. The bill creates the gateway for a new appeal system, but it does not do the most fundamental thing that we need it to do that should reduce the volume of appeals. That is absolutely critical for us to be able to deliver three year evaluations, apart from what I have already told you is critical, which is the information that flows into our offices. Our current knowledge or rather our knowledge in February of the appeal proposal system reflects our costings, but as the proposal and appeal, I was going to say proposals, provisions start to take shape over this over the next few months, that could well influence and change our estimates and the resource requirements. If we cannot find a way of getting the volume down, or if we find that we end up with a very cumbersome appeal and proposal and appeal disposal process, then we will find ourselves stretched further and requiring more resources. Right, so are you confident that the proposals in the bill will reduce the number of appeals? No, you are not. In short, no, because the proposals in the bill set up a system of proposal and appeal. Instead of straight appeal, it is a proposal first and that is anticipated to be dealt with by the assessor and then an appeal. You have a two-stage process. The big question is how is that going to operate? Of course, the bill is silent on that, because it will come in in secondary legislation, which is currently being formed. There are discussions going between the various stakeholders as to what shape that might take. Depending on the shape that that takes will be absolutely critical to whether we are on budget or not on budget. That is something that we do not know at present. I urge all observers in this process to reflect upon the financial memorandum as it is a statement on assumptions and knowledge in February this year. There are assumptions that you are not entirely confident that they will be met. You say that a proposal and appeal is part of the problem. How do you get to an appeal stage without the proposal stage first? First of all, the current system is affected by an appeal that is lodged with the assessor. It will be followed through until it comes to the evaluation appeal hearing before a committee. The bill proposes splitting that into a two-stage process whereby a proposal will come to the assessor in the first instance. The assessor will issue a decision, if you like, as to his assessment of the position at the end of that proposal stage. The rate payer will then have the opportunity to lodge an appeal with the tribunal or the evaluation appeal committee. The proposal in the first stage, and I should be clear from the assessor's point of view, is likely to be a more complex procedure than the current one, where it is a one-stage process. The key point is that from the assessor's point of view, there are currently 80,000 appeals lodged to teach revaluation. It does not help us if there are now 80,000 proposals followed by a second stage. The same amount of work will be involved for assessors, whether it is a proposal or whether it is called an appeal, and, in fact, the volume of work will likely be more because of the two-stage process. In visitment, just now, is that the rate payers will lodge the proposal with the assessor. There will be a discussion. The assessor will intimate his thoughts on the matter, and the rate payer will then have the opportunity to proceed to a formal appeal with the evaluation appeal committee. That will probably reduce the number of appeals that will go to the evaluation appeal committee, but it would not necessarily reduce the number of proposals that the assessor receives. Do you think that those who automatically go to the appeal just now would automatically go to the proposal stage first and then some of them might go on to the appeal? Indeed. In fact, I think that some of the provisions within the bill would suggest that there might be slightly more proposals than there are appeals at the current time. Does that actually increase the workload by having the extra stage? It is likely to increase the workload. A lot will depend on exactly how the tribunal deals with those appeals. That is again to be decided. The current evaluation appeal committee structure will be absorbed into tribunal service in 2022, coinciding with the introduction of three-yearly revariations. We are not very sure of the details of how that tribunal service will manage those appeals, but we have some concerns that the streamlining of the process and the timescales for dealing with appeals will have a significant impact on whether we are able to achieve the three-yearly revariation process or not. I should be quite clear that assessors consider that it is imperative that appeals are resolved within the course of the evaluation, apart from fairness to rate payers and having certainty of their liabilities. The impact of going into following the evaluation with appeals outstanding and perhaps uncertain aspects of our valuation issues doubles the potential income loss, if you like, from one revaluation following into the next revaluation for matters that have not been clarified. We would consider that all appeals should be resolved within the three-yearly period. Current proposals will be potentially slightly more administrative than the current proposals, but we do see the logic for going down this route. Given the concerns that you have expressed, is there anything that you would change in the bill to make things better? One thing that I could mention is that it is not in the bill that has been discussed, and that is in terms of the role of public sector appeals. There is a possibility that, through mechanisms other than through the bill, there should be appeals from the public sector given at one level, depending on how you look at it. It could be argued that circular money going from one public purse to another public purse will be a role for reducing the number of appeals from the public sector. Beyond that, there are a number of measures that assessors have suggested. The first would be that a fee could perhaps be lodged at the proposal stage. The bill contains provisions for a fee to be charged at the second stage when it goes to the various meal committee or the tribunal, but not at the proposal stage. We have suggested that there could be measures whereby, if a property is in receipt of 100 per cent relief, perhaps there should be no reason for a proposal to be lodged in that circumstance. We have also suggested that perhaps rape pairs have reached an agreement with assessors as to what the value should be as a pre-discussion. Again, there should be no proposal there. There are a number of measures that have been suggested, but they do not appear in the bill at this point in time. I have a question for Mr Simpson. Ian Milton said that, in response to whether there will be any change in the volume, he said no, because he does not know how many will come in. He talked about the fact that the bill will be resolved in secondary legislation, which I presume is section 6 of 3ZB. Would one where ministers may be regulations about the circumstances in which such an appeal may be made only with the permission of the valuation appeal committee, and Alistair has mentioned a few gatekeeping rules. Would another one be that you do not get to make a proposal unless you are appealing a valuation of more than, say, 10 per cent away from what has been made? Presumably, you can appeal a valuation at the moment without any threshold of departure from the valuation that you have been given. The position is that a proposal can be made against an entry in the valuation role. It might not just be the rateable value that is in dispute, but it might be the actual existence of the entry. One of the areas that we have not touched upon in the bill introduces the business growth accelerator and a marker that will be in the valuation role. It anticipates a marker in the valuation role, so it might be that a proprietor attempt or occupier might challenge the existence of that marker, or the lack of a marker, which might be a gateway to getting relief or not getting relief. We anticipate, as Alistair mentioned, that there will be, potentially, more proposals coming into the system unless there are active measures to reduce the volume of proposals. If there is an outstanding request for information that has not been responded to or there is a civil penalty sitting on that, then maybe there should not be a right of proposal. It becomes quite complicated, but the volume of appeals is very significant, whereas the actual adjustment of properties under appeal is not significant, I would argue. There is an issue about the system being gummed up, and this is public resource being gummed up with any appeal or proposal system. We do not want to, obviously, deny access to justice, but we have a finite resource, and the question is, how can we make sure that the volume of appeals is minimised, but where there is an injustice, it is remedied? Currently, we are feeding in to the Barclay Implementation Advisory Group's appeal subgroup with other stakeholders looking at options, but one of the issues is the potential for the exchange of information to be set down in secondary legislation, which will tie assesses up in providing information, which is fair enough, but it will also tie up the rate pay in providing information as well, grounds of appeal comparisons and such like. There is a potential here for a huge raft of work, and it is a challenge to be perfectly frank to find a system that is going to be fair to all parties and not be overburdened to some on public resources. Graham, do you want to comment on the changes to the independent schools? I think that this could be quite quick for you. Just to look at the proposals for changes to the way that rates are handled at independent schools, I notice that you did not have anything to say in writing on that, but now is your opportunity. Now you are here. Thanks, convener. The position on independent schools is a matter of relief and the charging of rates is not something that would impact directly on assessors, which is why we have not put up any comments in the paper. Currently, those schools are valued to appear in the valuation role, if it is a matter for policy makers and for the councils in terms of applying the relief. That is really why we did not really offer any comments in that aspect. That is fair enough. It is really a policy thing, which is not for them. Thank you very much for that. Going back to the issue of information notices, I am dealing with the issue of the time limit, so I note that your preference would be for, instead of it being in effect, 56 plus 28 days for it to be 28 days, and then, presumably, with the possibility of a pew at that stage. Could you explain, as far as you are aware, why it is that at the moment in the bill the position is 56 plus 28? What was the thinking behind that, which, obviously, you do not agree with? To be frank, it was a surprise to us that it came out at 56 days. It may be that that is a provision that applies in England and Wales in that jurisdiction, but our position has been that we need the information to turn around quicker. 14 days is a current rule, and we accept that that is unrealistic, especially when you are looking for some detailed information. We are also aware that, if you are looking at large, major projects, detailed information is available through quantitative bayers, project managers and such like, often digitally, spreadsheets and such like. 14 days is far too short. 28 days, 30 days—that sort of region is about right in our view, because, at the end of the day, we have such a tight turnaround time between the tone date and the actual role coming into force of only 12 months, so we do need to get this information in. That is the background to that. I dare say that, if it then goes to an appeal, then there would be a further 28 days. Currently, you have 84 days between the first notice and the civil penalty appeal stage, which, in 12 weeks, when you are only dealing with a revaluation cycle that is measured in months rather than years, is an issue. We shall pursue that doubtless with the minister and G course. I note also in your submission in general, in a general sense, in terms of communication, you stress that that should be digital by default, so, presumably, that would apply to information notices. Can you explain a bit more what that would rule in and what it would rule out, and whether you feel that the bill supports the position that you seek to achieve in that regard? The legislation, as it currently stands, notices, valuation notices, have to go out in writing and to go out with paper form at the moment. What we are responding to is the modern world and looking at ways of having more streamlined processes. When the bill came out, it suggested that, if there was information and valuation notices to go out, it could be agreed between the parties. From our viewpoint, that adds a process that could be seen as burdensome to try and to and throw to get agreement about email addresses, how it would be done etc. Where our view is for greater efficiency if we could issue correspondence digitally and maintain email addresses etc, it would be a more efficient way of delivering. That is where we were coming from, to try and respond to the modern world and also to be more efficient in how we do things. We are looking, as part of our preparation for NDRR reform and formalising our strategy towards delivering it. We are looking at what goes on elsewhere, particularly in the United Kingdom, and if we look at, for example, Northern Ireland, the assessments are all published online. No valuation notices are issued to the ratepayers, and that means that the information is all there. There is, of course, an accessibility issue, but it means that all the information is published at the same time in one place and people know where it is. It is accessible to prior to tenant occupier agent, rating consultant, adviser and neighbour. It is all there and it is online. At present, we have the SAA portal website, where we publish all our rateable values and all our council tax bans and lots of other information as well. We were keen to see a move towards delivering NDRR reforms and delivering our service through our portal rather than through paper notices. We have to issue 400,000 valuation notices each time we do a revaluation. There are proposals in those reforms to increase the information that we provide to ratepayers, which are very sensible, useful and good. However, the problem is that if we are to provide that information on a paper valuation notice, for example, addresses of properties that we might have used to compare in our valuation process, we get into all sorts of challenges about how we are going to print notices where we have a list of addresses that we have used for comparison purposes. Sometimes we may have several hundred properties, other times maybe one or two. There are all sorts of issues around that. We believe that the answer is to have all the information available online and messaging to ratepayers, proprietors, tenants and occupiers as to where they can go and get that information. However, in terms of cost efficiency publication online, we believe that that is the way forward. Whether that can be achieved in terms of accessibility and making sure that nobody is discriminated against is an issue, but if you look at common delivery models across taxation services, for example Revenue Scotland and other bodies in Scotland, they are moving definitely to online delivery in terms of driving efficiency. I hear what you are saying. I would imagine the questions that we can put to the minister who has also got a digital element to her brief, so it would be interesting to you what she has to say. I take it then that you feel confident that you would have the infrastructure to go digital. We have the infrastructure that we have at our portal and Heather Henneman is a senior responsible officer for our portal. We have all that available, but we would need to do work to expand it. We have a work plan at the moment that we are moving forward with to deliver Barclay and the Barclay recommendations. Some of that involves putting more information online so that people can self-serve at their leisure, go on and look at information. We are moving to try and have more valuations available online so that people can look at the detail of what makes up that rateable value. I turn to another issue that you have raised in your submission to us, which we received this week. In connection with the information notice, one of the issues that you raised was legal privilege. You were concerned that information could be precluded in circumstances where confidentiality would be detrimental impacted. It seems to be that this would be where the notice is sent to a solicitor, but you say that there is a lack of clarity. Could you explain further? As far as I am aware, the legal privilege would extend only to communications with the solicitor, not to anybody else. If you sent the notice direct to the rate payer, why would there be an issue here? Perhaps you can clarify what your concern is. The concern that we have is that, under the current regime, leases are routinely subject to confidentiality clauses. We would really be seeking confirmation, if you like, from the Government, from the Parliament, that that would not be extended to cover the situation where parties to a lease have a confidentiality clause within their lease or a contractor has a confidentiality clause within his contract. At present, it is a convenient way for parties to claim an exemption, if you like, from providing the information that we are currently asking for. The concern is having this expressly in the bill. Could you further encourage that type of action? It is now because this is a new provision that is expressly referring to legal privilege, your concern is that this could somehow be applicable more widely than is the intention. We want to be sure that it is not applicable more widely and secondly that it is not perceived to be applicable more widely. We have a significant number of discussions and refusals to provide information just now, simply on the grounds that my lease is subject to a confidentiality clause. I am not privating that to you and we need to get beyond that. Right, so it would be a question of just ensuring that the language used was absolutely water tight in that regard. Then also an issue that has already been touched on, as I won't belabor the point, but in terms of the civil penalties, two issues. One, you seem to take the view that the civil penalties in terms of information notices replace are substituted instead of the current position. Could you explain what the current offence would be? The current offence is that there is a current section 7 of the 1854 act, which is somewhat history. The Land Variations Scotland Act 1854 makes it a criminal offence not to respond within the 14 days to a reasonably made request by the assessor. Some of the language around that is, again, quite restrictive. It can only be served on the proprietor, tenant or occupied. It cannot be served on any other party. It can only be used to vote for the parties of valuing that subject. In that sense, it is quite restrictive and assessors have said over a number of years that it is inadequate for the purposes. Nevertheless, it had a value as a deterrent because simply being able to have it on the evaluation notice if you like or a questionnaire did reap some benefits, albeit particularly for larger rate payers who perhaps were professionally advised that they were not always inclined to comply with it. We very much welcome the introduction of civil penalties. I do not want to disparage a civil penalty route, but we feel the importance of the issues such that we would want all possible tools available to us and ideally we would prefer to keep the existing criminal offence in addition to having the ability to levy a civil penalty. In your view, the possibility of a criminal offence has been removed completely from your armory in terms of the bill? Yes. Section 7 of the 1854 act is repealed in one of the sections that I need to find it for you, but it is being repealed and it is not being contained. Some parts of it are being retained in another section, but that aspect of non-provision of information—sorry, the parts that are being retained or replaced in a new provision—are for knowingly making false statements, etc. That has been replaced in a new section, but the criminal offence for not providing information has not been included in that section. Again, any understanding as to why that is? Is that an oversight or is it a deliberate policy? I am not. It is obviously a matter for the Scottish Government whether the dual nature of having the two resources available or whether there is a protocol or something that prohibits that. Again, we are not aware of that but, certainly, a assessor's wish would be to have both tools available. To retain the criminal offence for non-provision of information, that is clear. On the other issue pertaining to the civil penalty proposals and an issue that we discussed last week with COSLA and so on, it was the scale of charge. It felt that that was inadequate because, in terms of those with very large rateable values, it was a drop in the ocean and we would provide no deterrent whatsoever. What are you thinking on that? I would very much agree with that position. There are two separate issues, if you like. One is the size of the penalties and we are dealing in many cases with properties with tens, hundreds of thousands. In some cases, millions or tens of millions of pounds of rateable value. The current penalty of £100 plus £20 a day gets to a maximum of £7,000 or £7,500 over the course of a year. You have to go several years before it becomes a more sizeable figure. Even then, for some of the properties and companies, it really is nothing at all. I suppose that we have to accept that, for smaller individuals, it may be a meaningful amount of money and it may be useful in that regard, but it certainly may come to larger organisations. I would suggest that it is not meaningful. The second strand is that, as Mr Moulton has already touched on the restrictive nature of the clause, the other aspect is that it is worded in such a way that the maximum penalty is the rateable value of the property and the role on the day that the notice is issued. If we are applying an information request, a property that is not yet in the role, then that part of the provision does not really kick in. Therefore, you are limited to the £500, which is, as I say, meaningless in terms of the majority of properties, to be honest, if you are talking about a large rateable value. Sure. We hear what you say, as well as our witnesses, last week. Last question, convener, if I may briefly. I noted that the level of penalty was different as regards local authorities and the assessors. Is there a reason that the local authority penalty is slightly lower? Is there a reason for that? Why would they not just be the same? I am not the kind of person that I am aware of. Maybe there is a difference between the complexity of the information or the need for the information, but I am certainly not aware of the thinking behind that. I think that it is a slight marginal difference, but there is a difference nonetheless. Certainly, in the assessment of the information notes, we have the maximum rateable value of the property, which, as I have to say, is welcome. I would not want to be at our comments, because it is being negative in terms of civil penalties. We would like to see them being a bit more complete. Can I first of all ask about the anti-avoidance measures that have been welcomed by some organisations? I mean, phoenix companies have been identified as a potential problem going forward, but can I ask you as assessors, do you believe that the anti-avoidance measures that are being introduced are strong enough? Do they go far enough for you in closing some of those loopholes? Our submission on the general anti-avoidance regulation is silent, because we do not see it as a particular area of our practice. We see it as one of rates of avoidance and that side of thing, which is an area that we are not involved in. The anti-avoidance rules that we have not made comment on, we feel that if we get the right information powers so that we can get the detail that we need, we can get on with our job and get the property assessed, what happens downstream in terms of levying collection of rates is another issue. You also talked about additional costs that you felt were potentially going to be incurred in the process. Do you believe that they are going to be fully funded in the sole process if you find that, for example, additional costs end up being higher than the estimated costs that are being looked at for the process? You talked about workforce, you talked about various other aspects today. Do you anticipate that there will be an issue there? If there is, how is that going to be managed? We have a commitment to, for a dialogue or even a trialog between Scottish Government, COSLA and ourselves, as those NDR reforms take shape. I am reasonably confident that people will be listening. The question is, will the resource be put in place? That is an issue. It is an issue that all of us face, as I think most managers in public sector services face across the whole public sector, is the overall resource and availability. There is, I suppose, a risk that if an allocation is made for NDR reform, funding bodies who are under particularly tight financial conditions themselves may see that as an opportunity to draw back from their baseline funding. That is an issue that we want to try and guard against, is that we maintain our baseline funding and also maintain adequate resource funding to deliver those reforms. As you have identified many others in the public sector are indicating that they are having to do more with less in that process, and you may become an organisation that fits into that. Can I tell you that, depending on what the workload and the process you are going to take on board? One of the unique situations for assessors is that the responsibility lies with the assessor to maintain the valuation role, not the valuation authority. The valuation authority has to appoint an assessor, and the assessor has to do the work and maintain the work and meet all the statutory requirements. There is attention there. A final question that I would ask is, do you think that there are any businesses themselves? What type of businesses do you think that there are any that are most likely to be affected by the introduction of new penalties in this whole process? Have you assessed any of that level, if that is the case? We have not carried out any assessment of that. It is probably quicker to say that we have not done any analysis. You will find that, across different sectors, there is a greater degree of engagement and provision of information, and you will find that across various sectors and industry, and our evidence, given to this committee in the past, has covered that to a degree. I do not know whether colleagues have anything to add to that. I am not sure that the question was aimed at the civil penalty aspect. Obviously, in our view, we would like there to be no civil penalties. We would like the information to be provided, and therefore there is a route to ensure that penalties do not arise. We do not really see that the rate payers route should be disbenefit by that penalty regime. Fundamentally, our interest is in getting the information, but we are not really interested in applying penalties. It is really a tool to make sure that we have the necessary information. I was just on an issue that we are talking about avoidance. You have said in your response at the Scottish Assessors Association that you recognise the rationale behind the proposed change to section 72 of the Local Government Finance Act 1992. The provision will counter a known avoidance tactic for second home owners or occupiers of self-catering properties. It must prove an intention to let for 140 days in the year in evidence of actual let-in. However, you have some concerns about the local government treading on your toes a bit, but I am just wondering whether you can tell us your concerns about that, Mr Doig. That is very much, Mr Gibson. Although the SAA supports the measures that have taken place in the bill, the point that we are making there is that, historically, assessors have taken the decision whether to enter the role or the council has valuation list, and in this instance there is a provision to allow local authority to do that. We were concerned about having some sort of least criteria to discern what circumstances they could make the change. For example, we have said in the submission that some properties genuinely, just through location or whatever, will not be able to have 70 days letting. It is just to make sure that councils have a policy in place. At the moment, there are a lot of changes with self-catering properties in and out of the role. For example, in one area, I have got about 1,300 properties self-catering. Since the last revamp in 2017, I have made about 600 changes properties coming in and out. It is just to make sure that we do not end up with an ad hoc nature of local authorities making decisions on properties coming in and out of the role. You are looking for the Scottish Assess Association and you recommend that the exercise of that discretion requires apologies to the decision of the council, and I was a wee bit unclear whether you felt that that was a decision that should be made for every individual property or an overall decision by each local authority. Secondly, you talked about an island situation in a very remote area, where the letting season is not as long as 70 days. I have got two islands in Maconstain, say Arn and Cumbria, and the letting season goes on for months and months and months. We are in Scotland to have a letting season of only 70 days. May, June, July, August, September, March, October, Easter—surely, it is nowhere at 78 days. Even Iceland and the Faroe Islands don't have letting seasons under 70 days. I was just a bit curious about that, but I am more concerned about the issue of how you expect the councils to operate in terms of that issue. What we are pointing out in that section of the response is that assessors and local authorities officials do not have discretion as such to apply subjects to the valuation of the council tax list. There is legislation there, which is passed by policy makers in the form of the Scottish Government, and assessors would apply that. That is a departure from the sense that the responsibility will now fall to local government, which is entirely appropriate. We just wanted to be clear that this is a move, if you like, away from decision making as to what properties end the valuation versus the council tax list away from the Scottish Government to the local authorities. So assessors really have no difficulty with that other than pointing out that that is the effect of what is happening here. In terms of the policy aspect, we would very much welcome, as Mr Rhaik has said, that there are not frequent changes to that policy. Each change to the policy will require more subjects to be moved from one list to the other list, which will require gathering information, valuation and administrative processes. So not having a regular process would be from a working point of view assessors' desire. Yes, I saw that councils generally do not change a policy within six months, for example of maker policy. The point that I was trying to get at was whether you are looking for a policy overall on this by a local authority or per local, per circumstance. That is what I was trying to get clear on. I was not really sure about in your submission what you were trying to get at with regard to that. It is just an element of clarity. I think that what we are trying to do is, when we would imagine the council would take a decision if there was a particular circumstance, a landslip and a major access road or something like that, the council would take a policy decision on that. If there were to be a provision whereby in certain areas where certainly we are told that they are letting— Where would that be, sorry? Some of the western isles, some of the northern isles, et cetera, where it is suggested to ourselves and that it is not my area, so I cannot speak authoritatively about that, but certainly it has been suggested that in some of those areas the letting season is not 70 days. Again, that could potentially be a matter for the council to make a policy decision on that aspect. It is really just, as I say, highlighting that this is an issue that would hopefully require a decision by policy makers at the Scottish Government level or at the local government level and would not really be implemented by officials in our sense in terms of assessors or indeed, I suppose, directors of finance. Okay, thank you very much. Okay, thanks very much. Can I just ask—we go back to the anti-avoidance measures. Surely the front line of the anti-avoidance would be the assessors, the people who are out there and seeing what's going on and being able to pick up. You must have intelligence, surely, from the amount of assessment work that's been done and would you not be feeding into that—for the Government, for example, with the loopholes or would you not be the people who would first and foremost see what the loopholes were and who was using? We certainly identify weaknesses in the legislation in the land's valuation acts that make it difficult for us to make an entry and evaluation role. We also see examples where our attempt to make an entry and evaluation role can be frustrated by non-provision of information, which is the most classic example. If part of a property is sublet and that information isn't provided, the entry and evaluation role is challenged and we can't go back and make that former entry. We can maybe correct the larger entry, but we can't make a new entry outside the current year for the bit that was sublet off. For example, that's an area, but in my view, I don't see that as what the anti-avoidance proposals are. I see that more as Phoenix companies and the like, which is an area that I don't have any particular experience or professional expertise in. My issue is to make sure that everything in my area, in the Grampian area, is assessed and in the valuation role and accurately assessed. That's supposed to point at making us, but with the experiences that assessors would do not be people who would be feeding into what those loopholes actually are that are being used regularly. We have identified situations in which our witnesses in the land's valuation acts are being exploited and we have fed that back into Government. I suppose that there are elements here through those reforms that address that, whether they go far enough or not, will remain to be seen. I don't know whether colleagues have other views. One last thing before I pass you on to my colleague Andy Wightman. You talk about a sort of fear of funding, a shortage of funding, but the Government has said, and COSLA said last week, that the Government has said that they are going to fund the anti-avoidance measures that will be there. They are very confident that they will do that. So what particularly is your major fear about that? The issue is that Cabinet Secretary, Mr Mackay, has been very clear that we fall within the local government family, and that is understood. Local government is subject to its own funding challenges. Joint boards have a power to requisition. Assessors for unitary authorities don't have a joint board, but they nevertheless have the evaluation authority to have a power to requisition funding from the local council. However, the issue is that when you are making a requisition request, your board members are very conscious of the financial situation that they are faced with as members of councils. The challenge is that there is a limited pot, I suppose. So, whilst the Government might say that 29.1 million over so many years in the financial memorandum is the estimated funding or cost of NDR reforms for assessors, the challenge will be to make sure that that money actually reaches assessors whilst at the same time the baseline funding is maintained. We have experience of working in other areas, as most of us are electoral registration officers, and we have received direct funding from the Cabinet Office for the introduction of individual electoral registration, for example. We have received direct money from Government, in that case UK Government, to deliver a change or reform to electoral registration, and that money came straight to the electoral registration officers. However, we do not have that similar mechanism here. We have a mechanism that runs through consular and has been supported by consular, and for the first year it has worked well. The question mark in my mind is going forwards. Is that going to continue to work the way that we want it to work? Are our authorities going to find themselves in a position where they are reluctant to maintain the level of funding for reasons to do with just choices to make over where their funding priorities are? Your concerns are really based around that councils continue to fund you then. I am going back to section 5 on whether lands and heritage are dwellings. How do you assess whether a property is a commercial short-term let or whether, in fact, it is a residential property? For example, there are 1,500 self-getting properties in the city of Edinburgh. Do they come on through the occupiers voluntarily requesting them to be on, or are you making some proactive assessments? Most of the time, we will find out from the occupiers that there is a change there, and they will advise us. We will send them at a declaration to say that there is intention to let that for 140 days for self-catering use. We do evidence that, as best we can, we will make the entry on that basis. So, it is based on occupiers approaching you? Or we find out through various other sources that we will be proactive. Like the planning system? Do you pay attention to planning applications, for example? Planning applications will look at visit Scotland websites, various other things to see if properties are being used for that use rather than being in the council tax list. So, is there any specific reason why local authorities should have to have the power to vary the meaning of dwelling, which is section 72, which is all about council tax, really? Commercial short-term lets are not dwellings. They are commercial self-catering properties, or short-stay accommodation. They are in a different use class in planning. So, why do we have to play around with section 72? I suppose that it is the fact that if there is a cessation of the use as a self-catering, whether it is for any short term, I assume that that is the provision to our local authorities to take a decision. For example, stated in the bill where, for example, they are unable to be used for self-catering use through some issue such as a landslide, or that there is no access to the property. That is my understanding of what the provision is for. Okay, thanks for that. If I may or convene if I may, the definition of dwelling for council tax purposes as you have identified is 72, but that definition is buried by a number of statutory instruments. For example, prisons are defined as dwellings, and the definition of dwelling also identifies self-catering subjects. So, dwellings that are in fact still dwellings and would be, unless, but for this provision, would be subject to council tax, can be defined as lands that fall within the definition of lands and heritages, which need to be entered into the valuation role by way of a statutory instrument. In relation to self-catering property, the current rule is that they have to be available, as Mr Doug said, for 140 days, with a reasonable expectation of that on a commercial basis. The idea is that that is used by people who have second homes, maybe inherited homes, to avoid paying the council tax. If they can convince the assessor that they are actually available for that for 140 days or more per year on a commercial basis, then they can apply it to have it added to the valuation role, and it falls into the definition of lands and heritages. That, I think, is the issue. Okay, for the future, maybe we should redefine what we mean by dwellings as a class, because I have about 2,000 dwellings in Edinburgh that are on the council tax role, operating as commercial short-term lets. There is no anti-voidance there. Halls of residence for ex-student halls of residence are defined as dwellings by similar legislation. Okay, let me revisit that. I just want to raise, I mean, Barclay and going back to revaluations, Barclay looked at, for example, the situation in the Netherlands where you have rolling revaluations. So on a three-year revaluation, you do a third of the country or a third of the classes every year. Is there any merit in that, or have you arrived at a fairly clear position that a three-year valuation is for everything, is the best way forward? That's a very interesting way of looking. There's a number of ways of local taxation and properties taxation operates across Europe and, indeed, the wider world, and with indexation, regular annual revaluations and all sorts of different models available. I suppose that our view is to implement what the Government puts forward to us. As a charter surveyor, I can see that a rolling revaluation with a third of the properties being reassessed every year might have advantages to me in terms of delivering a revaluation, but would it be by sector? Would it be by area? If it was by area, how would that impact when we have a present national rate poundage arrangement? The whole local taxation sphere would need to be reexamined if we were going to move to that sort of approach, but I don't see any fundamental issue about having different models of revaluation, the importance feature of any local taxation based on property is that it is up to date with values that prevail in the markets, because that makes it visible and transparent to the occupiers and the taxpayers. Back to a point that you just made previously about subletting property, what you said was that if you don't have that information that sublet cannot be on the roll. You can find an example where somebody will sublet part of a property. It doesn't need planning consent. There's no building warrant concerned, so we're not really getting that information. If the original assessment is challenged and we find that quite rightly that there's a separate rate of occupier of part of that and new lands and heritage is formed, we can only make that entry in the current year. Are you saying that you cannot make entries between valuation years? No, we can only back date an update to the valuation roll within the current year, so you can only go back to the 1st of April whichever year you're in. So, if it actually happened five years ago, you can't do anything retrospectively? No. With three-year evaluations, we'll hopefully have picked that up anyway. Okay, so there's no implications. There's nothing we need to think about doing extra in the bill to cover that. That could raise a whole raft of issues, which probably isn't time permitted to. There are certainly questions over and we've made this point in our response to the previous consultation about whether we need to look at section 2 of the 1975 act in more detail in respect to the ability or otherwise of assessors to correct errors. Well, I'll just remind you, of course, that this Parliament's making this legislation, it won't look the same at the end as it was at the beginning, so if you have any ideas that you may have given to government but we're not that sighted on, feel free to bring them to our attention for stage 2. My final point was just on the financial memorandum. You've been closely involved, in drafting up the numbers on that. Apart from the point that you've made about the additional personnel, the baselining, are there any other issues that you'd want to draw to our attention as areas that we should scrutinise a little bit more closely in terms of the numbers? I noticed from the baselining, for example, that the costs associated with the bill are £32 million, which is gross. The estimated cost to rate payers is £68 million, so there is a £34 million net uplift in public revenue coming here. Is there an issue there about making sure that it goes to the places that it should go in terms of making sure that the administrative costs are covered? I mean, I know that that's a policy decision, but there's £34 million of flexibility here to cover the kind of costs that you're indicating you may have to meet. Certainly, moving from five-year re-evaluation to three-year re-evaluation means a whole new pile of work to be done. There's no doubt about that. Even if you just think about issuing valuation notices, if we're still issuing paper valuation notices, every fifth year we'll be issuing them every third year. When that's 400,000 items of mailing, there's an immediate cost in terms of stamps and envelopes and stationery and so on. The costs that we've estimated are, as I've said, based on current understanding, and I have identified a number of areas where there's caveats. We don't have funding for the designated assessors if they face challenges. We still don't have the issue over the costs of asynchronous re-evaluations because, at present, we benefit from a lot of sharing of information, and Heather Honeyman would be able to speak to that if members are interested as a designated assessor what's involved in working with colleagues south of the border. There's that area that's still not quite covered. The financial memorandum isn't the final story, but I suppose the message is that we can do this job. There's no question in my mind that we can do this job, but we do need the tools, not only the legislation but the resources, and that's the finance, and, as identified earlier in this session, the expertise, which is going to be a real challenge to get. If we get those, we should be able to do the job. Okay. Finally, in paragraph 99, the financial memorandum says that the Scorsese Assessors Association did not carry out a sensitivity analysis in relationship to their cost estimates in table 4, therefore the margin of uncertainty is not known. That's a little bit worrying. The total costs are estimated at £29.1 million. If you don't know the margin of uncertainty, in theory those costs could be £129 million. You must have some idea. We've done the best that we can do. In that regard, we haven't carried out a sensitivity analysis simply because, in my view, there are too many unknowns at present. When we drill down to the detail of what sort of requirements we will be required to do in terms of exchange of information through the proposal and appeal process, whether we're going to have to present a complete statement as to our position at the end of each proposal stage that will then be used by the Tribunal Service or the Valiational Appeal Committee and the Tribunal Service to go through the appeal, that would be an incredibly onerous task if we have to produce essentially the case, because the vast majority of proposals will fall at that point. However, if we have to nevertheless produce the legally-backed and researched documentation to demonstrate everything that we're saying, then that will be a major task for us and that will be a major cost. Until we see the shape of the proposal and appeal provisions, we can't really get involved in the luxuries if you'll pardon that expression of dealing with a sensitivity analysis because we need to get the size of the task truly specced out. Once we've got the size of the task specced out, then we can actually put it to our IT analysts, look at how much professional expertise we need and get down to the fine detail. Then we can build in our sensitivity analysis over the what-ifs, what happens if values at a revaluation rise more than expected and the appeal volume goes up. One of our issues is that we are assuming a 25% reduction in appeals. We don't know whether the measures to reduce the volume of appeals that we get from the public sector will actually work and whether they will have roll-out. At the end of the day, rateable volumes are now used for water and sewage charges as well, so it's not only the local government rates funding that's that side of the funding as well. Even if the local government finance side of things is taken care of, it might not remove the driver to make a proposal and appeal against an assessment because, at the end of the day, there will be water charges that will be levied according to that rateable volume. You can't do this because you don't know what the impact of this once it becomes an act. We cannot know what the impact will be until it begins to be operationalised. It's not only the bill becoming an act, it's the secondary legislation that was so critical in shaping our service. What we'd been interested in is if you have any ideas about how the bill could be improved to, if you like, limit the potentially large increases in costs of them and they can be done to potentially curtail those or to provide a little bit more predictability to those costs. I think hopefully our submission, which I have to apologise, you only received very recently, but we were working to a deadline of the 30th of May, so our submission does highlight areas. For example, in a way, the make and breaks of this whole thing are getting the information coming in and we identify measures that need to be taken in our submission and reducing the volume of proposals. Proposals appeal, whatever you call it, is going to be an interaction that will have to be met by public resources on our side, rate pair resources on the other side. Getting those two aspects of this new non-domestic rating system nailed will make or break this system, in my view. I thank the panel for attending today's evidence session on a non-domestic rate Scotland bill. Further sessions will take place in June, and that ends the public part of the meeting. I now move the meeting into private.