Rateable Values were set by the Government, specifically by the Valuation Officer, who is an Executive Officer of the Inland Revenue, and used by local authorities in order to calculate general rates. The rateable value of a property took into account the size of the property, its general condition, access to local amenities and other factors, such as, closeness to industrial properties or a pleasant view.
Historically, water rates were also based on the same values. In 1989 the Community Charge replaced general rates and in 1992 Council Tax replaced the Community Charge as the basis for local taxation. Consequently, no revisions of rateable values have taken place since 31 March 1990 and the last full revision was in 1973. Rateable value has no connection to your council tax and changes in your council tax banding will not affect your rateable value.
Water companies throughout England and Wales had no alternative way of charging their non-metered customers and were given permission through the Water Industry Act 1999, to continue to use rateable values.
Can I change my rateable value?As the assessment of properties took place a long time ago, we understand that the current condition, amenities and outlook of the property may have changed. Unfortunately, although we can tell you the rateable value we are using to calculate your bill, we have no authority to change it. Sadly, there is also no process by which you can appeal against a valuation.
How your water bill is calculatedThe rateable value of your property is multiplied by a unit charge to calculate the variable element of your bill. We then add a standing charge to obtain the total annual charges for water and sewerage. If your friends or neighbours are paying less for water than you are, then they probably occupy properties with lower rateable values. Alternatively, they may have had a water meter fitted.
Government ReviewDuring 1995 the Government conducted a review into the best method of charging for water in the longer term. It looked at different methods, e.g. charging on the number of people living in a property, the number of rooms and even the number of appliances using water. All of these alternatives were rejected by the Government because they would be too difficult or too costly to administer.
The Government also looked into charging schemes based on Council Tax bands, given that these have replaced rateable values as the basis for local taxation. However, using Council Tax bands was also rejected because of the high 'incidence' effect. This meant that too many people would see an increase in their water bills simply because of the change to the new system; the 'losers', people who would end up paying more, would outweigh the winners, i.e. those paying less. More importantly disadvantaged groups, such as pensioners and the unemployed, would be particularly badly affected.
The FutureThe Government has now decided that metering is the best method of charging for water in the long term. It considers that paying for the amount of water used is the fairest method of charging, as well as encouraging water conservation. The Government expects metering to take some time to become widespread. It supports the metering of new properties and properties where there has been a change of occupier. It also believes that customers in non-metered homes should have the option of a free meter. As a company, we also support metering as the fairest method of charging.
Choosing to have a meterIn order to provide domestic customers with an alternative charging method, we offer a free meter option scheme. If you live alone, or feel that your family are low water users, you may benefit from having a meter installed. Please note that your existing non-metered account remains payable until the meter is fitted. Details of the scheme, which includes a simple calculator to estimate your water use, can be found by clicking on this link
All about metering.