Practice Notes

Approved for Publication 01.03.2005

PUBLIC BUILDINGS COMMITTEE

Practice Note 27

REVALUATION 2005

Valuation of Crown Properties - Prisons

1. Introduction

1.1. This Practice Note should be used as the basis for the valuation of all civilian prison establishments in Scotland occupied or operated by, or on behalf of, the Scottish Prison Service (SPS). This Practice Note does not cover the valuation of other properties occupied by SPS.

2. Method of Valuation

2.1 All properties constructed or adapted for use as a prison should be valued using the Contractor's basis of valuation.

2.2 The recommended cost rates contained within this Practice Note have been derived from the analysis of available cost evidence within the UK. The cost rates shown have been adjusted to Scottish Mean level at the tone date, but require to be adjusted for contract size and for professional fees.

2.3 The valuation should be carried out in accordance with Basic Principles Committee Practice Note 2

3. Basis of Measurement

3.1 Building areas should be measured on the basis of gross external area (GEA) as defined in the RICS Code of Measuring Practice (5th edition)

4. Estimated Replacement Cost

1. The following overall costs expressed in £ per m2 will be used to arrive at the Estimated Replacement Cost (ERC) for the key categories of buildings of permanent and temporary construction. The table is divided between the rates to be applied to Category A & Dispersal establishments, and Category B & C (including Young Offenders Institutes). There will be instances where the table below is not appropriate, and in such circumstances, actual costs or updated historic costs for the building in question should be considered.

4.2 Within the category of buildings "industries/workshops/stores" inside the wire, the appropriate size band for costing will be determined by calculating the aggregate floor area of such buildings. The exception will be any such building that, by nature of its use in the prison, must be occupied separately from others of the same type.

4.3 For Category D & Open Prisons, an appropriate building cost rate for valuation using this practice note should be selected from the table of building cost rates set out in Public Buildings Committee Practice Note 25, Valuation of Ministry of Defence Establishments.

4.4 Any problems of physical obsolescence or exceptional costs of maintenance associated with "System Built" forms of construction will be addressed in the level of allowances made at section 9 below.

4.5 Link Blocks and Subways, which are solely used as passages between adjoining blocks and where not an integral part of the design and construction of those blocks, should be left out of the costing exercise. The exception to this will be for secure corridors linking accommodation "within the wire", which will be valued at up to 50% of the appropriate cell block rate for the establishment.

5. External Works

5.1 In the absence of detailed information to allow a full costing of external works to be carried out on the contractor's basis, external works should be valued by making the following additions to the ERC of all buildings.

5.2 Additions on this basis will comprise three elements, firstly costing all playing fields etc. (Table A), where sufficient detail exists to allow these to be costed separately. Secondly, costing the remaining site works (Table B) excluding perimeter security, and thirdly, costing perimeter security (Table C).

5.3 In the case of Table B, it is assumed the benchmark figure would be adopted in most cases, but this could be subject to variation within the range to reflect the specific nature of the site being valued.

5.4 These levels may be subject to upward variation for lands and heritages that require additional site works due to the function of the establishment or downward variation for sites with basic infrastructure.

5.5 The percentage additions in Table B do not include playing fields, all weather pitches, tennis courts etc., but where there is insufficient information available to allow these to be valued separately, an appropriate percentage addition from Table B should be selected to reflect their existence.

5.6 In the absence of actual or updated historic costs for perimeter security walls and fences, the percentage additions for perimeter security shown in Table C on the following page may be applied.

5.7 Age & obsolescence allowances for all of the above elements should be applied in accordance with the scale of allowances for civil works as set out in Public Buildings Committee Practice Note 4, Contractor's Basis Valuations, External Works Costs, Allowances and Land Value.

TABLE A - Playing fields etc.

TABLE B - Site Works

TABLE C - Perimeter Security

6. Rateable Plant & Machinery

6.1 Any items of rateable plant & machinery, as defined in The Valuation for Rating (Plant & Machinery) (Scotland) Regulations 2000, should be valued and added to the ERC.

7. Contract Size Adjustment

7.1 The aggregate of building costs, cost of rateable plant & machinery and external costs should be subject to contract size adjustment as set out in Basic Principles Committee Practice Note 2, Appendix 3.

8. Professional Fees & Charges

8.1. Professional fees and charges will be added to the total cost as adjusted above in accordance with the following scale:

8.2 For all except Category D & Open Prisons, for sums between £500,000 and £2,000,000 the minimum fee will be £75,000 and for sums in excess of £2,000,000 the minimum fee will be £260,000.

8.3 For Category D & Open Prisons, for sums between £500,000 and £2,000,000 the minimum fee will be £65,000 and for sums in excess of £2,000,000 the minimum fee will be £220,000.

9. Obsolescence Allowances

9.1 Obsolescence allowances shall be made for individual buildings within the lands and heritages. Allowances will be made as appropriate in accordance with Basic Principles Committee Practice Note 2.

9.2 In most cases these levels of allowance should adequately reflect the physical and functional obsolescence associated with the age and construction of buildings.

9.3 However, where a building has been subject to some significant refurbishment, consideration should be given to adopting an allowance between the date of construction and the date of refurbishment.

9.4 An allowance in excess of the age related scale might also be considered, in appropriate circumstances. Examples could include greater physical obsolescence due to accumulated lack of maintenance, greater functional obsolescence of buildings constructed for a specific purpose or function and disadvantages associated with buildings, which were constructed to standards significantly inferior to their modern counterparts (assuming these have not been specifically reflected elsewhere - see following paragraph)

9.5 For system-built structures the allowance given may be increased by a further 10% where the block was built before 1975 and by a further 7.5% where the block was built between 1975 and 1985.

9.6 Any buildings, which are either physically redundant or are surplus to operational requirements and which have been fully vacated with no intention to reoccupy, will attract a nil value.

10. Multi-Floor Allowances

10.1 The following deductions should be made from the ARCs of individual blocks on the assumption that lift provision is adequate.

.

10.2 Where the allowance is made on an overall basis, the percentage deduction will be made in respect of all floors of the building. In these circumstances, the allowance should be applied to an area not exceeding the footprint of the floor(s) above 4th floor level.

10.3 Where the building is constructed on a sloping site with multiple levels it will not qualify for the above allowances unless there is more than one main floor above the highest main floor with ground level access.

10.4 In exceptional circumstances where lifts are inadequate to serve the building, a further allowance may be warranted. This must be justified on the facts of particular cases.

11. Domestic/Non-domestic

11.1 When considering whether accommodation within a prison is to be treated as domestic or non-domestic reference should be made to Section 72(2) of the Local Government Finance Act, 1992 and The Council Tax (Dwellings) (Scotland) Regulations 1997 (S.I. 1997 No.673).

11.2 Prison Farms should not be excluded from the valuation of the prison (See Armour, Valuation for Rating, 7.44 at page 198).

12. Developed Land Value

12.1 In the absence of suitable local evidence, the following table of rates may be used for guidance. It is anticipated that subjects covered by this Practice Note will attract similar levels of developed land value as other subjects in the locality, valued on the Contractor's basis.

13. Undeveloped (Amenity) Land Value

13.1 This will largely consist of amenity land. It will not include areas in excess of that required for amenity use or areas used as car parks and roadways.

13.2 The value of undeveloped land should be found using a price per hectare derived from evidence of transactions in other amenity or sports field land. In the absence of local evidence, it is recommended that a range of values between £5,000 and £20,000 per hectare be adopted.

14. Decapitalisation Rate

14.1 The appropriate statutory decapitalisation rate should be applied.

15. End Adjustment

15.1 Any advantages, or disadvantages, which might affect the occupation of the lands and heritages, as a whole, should be reflected at this stage.