Land and Property Services: Rate Levy Accruals Account

Date of Issue: 2 March 2012 

Land and Property Services Trust Statement - Rate Levy Accruals Account

Mr Kieran Donnelly, the Comptroller and Auditor General for Northern Ireland and Head of the Northern Ireland Audit Office (NIAO) has reported the results of financial audit work carried out on the 2010-11 Land and Property Services (LPS) Trust Statement – Rate Levy Accruals Account.

Mr Donnelly said that “I welcome that during a difficult economic climate, the Agency has increased the amount of revenue collected to over £1billion as this money is a critical source of funds in paying for central and local government services. However, it is important that the Agency continues to apply every possible means to maximise the level of rate revenue collected which includes reducing overall debt and, in particular, the high level of prior year debt”.

During 2010-11 the level of receipts collected exceeded £1 billion for the first time ever, representing a 5% increase over receipts in the previous year. This represents a collection rate of 96.4%.

Total ratepayer’s debt at 31 March 2011 was £156 million, a reduction of £1 million on 31 March 2010. £65.9 million of the £156 million debt relates to rate bills issued in years prior to 2010-11, 42% of total debt. LPS has estimated that some £33 million of total debt at 31 March 2011 will probably not be recovered. In addition to this estimate of debt that will probably not be recovered, £15.2 million of debt considered irrecoverable was written off by LPS during the year. This compares to £10.2 million written off in the previous year. Indications are that the write-off in 2011-12 could rise to £20 million.

Mr Donnelly also welcomed the implementation of all fourteen Public Accounts Committee recommendations arising from the significant financial and operational difficulties identified at LPS during 2006-07 (See Note 1 below).

One of these recommendations was that LPS should prepare a modern style annual report and audited set of accounts instead of the limited cash-based, unaudited financial information previously published. This 2010-11 Trust Statement represents the implementation of this recommendation. Mr Donnelly’s first audit opinion on these accounts was qualified because:

• LPS has been unable to provide a complete, accurate and up to date property valuation listing upon which rates assessments are raised. At 31 March 2011, there were 24,501 domestic valuations and 3,031 non-domestic valuations to be processed and valued and these had increased to 25,694 and 3,358 respectively at 31 August 2011. The report recognised that LPS has significantly reduced the number of valuations cases to be processed over the past 4 years, particularly for domestic cases. At 31 March 2008, there were 50,332 domestic cases and 4,869 non-domestic cases in progress.

• There was insufficient evidence to support the completeness and accuracy of the vacancy relief figure in the accounts of £75.3 million. At 31 March 2011, there were 50,000 domestic properties and 16,000 non-domestic properties listed as vacant and not liable to rates. Limited inspection work was carried out during the year on whether the non-domestic properties were actually vacant. LPS was unable to establish ownership details for over 21,000 of the 50,000 domestic properties. With the implementation of the Rating of Empty Homes (See Note 2 below), from 1 October 2011, many vacant homes attract full rates. Rate assessments have been raised against these properties and LPS continues to use a number of data sources to identify ownership for billing purposes. As a result, bills of £22.9 million have been now been issued.

• The estimated level of fraud and error for housing benefit on rates assessments was £4.2 million, 11% of benefit paid. This compares to an estimated rate of 3% incurred by the Northern Ireland Housing Executive on housing benefit it administers. LPS has undertaken a number of initiatives to reduce the level of fraud and error including participation in the National Fraud Initiative (See note 3 below), improved customer awareness and a redesign of housing benefit literature.


1. Report on the Statement of Rate Levy and Collection 2006-07, Third Session 2008-09.

2. From 1 October 2011, empty property rates are payable on all domestic properties with a rateable capital value of £20,000 or more. The amount due will be the same as when the property is occupied (generally ignoring any reliefs awarded when occupied). Where the property is considered as empty for rating purposes, there are a number of automatic and application based exclusions that apply. Automatic exclusions and successful applications will be granted 100 per cent relief.

3. The National Fraud Initiative is an exercise to conduct data matching scans to assist in the prevention and detection of fraud.

4. The Comptroller and Auditor General is Head of the Northern Ireland Audit Office (the Audit Office). He, and the NIAO, are totally independent of Government. He certifies the accounts of Government Departments and a range of other public sector bodies. He has statutory authority to report to the Assembly on the economy, efficiency and effectiveness with which departments and public bodies use their resources. His reports are published as Assembly papers.

5. The report relevant to this Press Release is attached and is published with the 2010-11 Land and Property Services (LPS) Trust Statement – Rate Levy Accruals Account which can be obtained from the LPS website at from Friday 2nd March 2012.

6. Background briefing can be obtained from the Northern Ireland Audit Office by contacting Stephen McCormick (028 90251067).