SSE Plc v Jo Moore (Valuation Officer)

For rating purposes, long-term mothballing of a power station does not, without more, create a separate mode or category of occupation. The relevant category is identified by the principal characteristics and broad purpose of the actual use, not by the occupier’s temporary business decisions or the duration of an interruption in activity. A power station remains occupied as a power station where mothballing is reversible, intended to preserve the plant for future generation, and undertaken because of market conditions. The repairing assumption is applied only after the mode or category of occupation has been identified. Inconsistency with the treatment of other hereditaments cannot displace the statutory and case-law analysis.

SSE Plc appealed against the Valuation Tribunal for England’s dismissal of its proposal to alter the 2010 rating list for Keadby Power Station. The agreed material day was 11 June 2013. The station had ceased generating electricity and had been placed into long-term mothballing, with preservation works, reduced staffing and silting of the cooling-water infrastructure. It later returned to operation.

The appeal concerned whether mothballing constituted a material change of circumstances under Schedule 6 to the Local Government Finance Act 1988, either because the mode or category of occupation had changed to that of a mothballed power station or because the station was incapable of beneficial occupation as a power station.

1. Appeal dismissed. The VTE’s decision stood and the rateable value remained £5,340,000 with effect from 1 April 2013.
2. The reality principle has two limbs: the physical state of the hereditament and its use. Both are reflected in paragraph 2(7) of Schedule 6 to the Local Government Finance Act 1988. The mode or category of occupation must be identified before applying the repairing assumption in paragraph 2(1)(b).
3. Following the approach in Fir Mill v Royton UDC and RF Williams (Valuation Officer) v Scottish & Newcastle Retail Ltd, the inquiry is directed to the broad purpose and principal characteristics of the actual use. It should avoid narrow sub-categories based on the particular circumstances of an occupier or on valuation methodology.
4. The mothballing was reversible, undertaken for economic reasons, intended to preserve the station for future generation, and followed by recommissioning. It therefore reflected the way the electricity-generation business was operated rather than a change into a different category of use. The station remained in rateable occupation as a power station.
5. The fact that the station could not generate electricity during mothballing did not establish incapacity for beneficial occupation or answer the prior question of its mode or category of occupation. The silting and mothballing works could not alter that conclusion.
6. The consistency argument failed. The comparator stations were being decommissioned before demolition, materially different from reversible mothballing. Even demonstrated inconsistency would not create a binding legal rule displacing the applicable statute and authorities.
7. There had been no material change of circumstances and no alteration of the 2010 rating list was justified.

• Valuation Tribunal for England: dismissed SSE’s appeal and maintained the rateable value at £5,340,000 in its decision dated 16 March 2022.
• Upper Tribunal (Lands Chamber): heard the appeal as a rehearing and dismissed it. The VTE’s decision stood.