Schools, School meals centre (Non Domestic Valuation practice notes)

Part of: Non Domestic Valuation practice notes (NI Reval2023)

These Practice Notes were developed for the purpose of revaluing non domestic property in Northern Ireland as part of Reval2023. They were produced primarily as guidance for LPS Valuers to ensure, amongst other things, consistency of approach and practice in rating valuations.


The scope of this Practice Note is solely to ensure a consistent valuation approach for this property Class/ Subclass/ Type for Reval 2023 and subsequent entry in the new Valuation List which becomes effective on 1 April 2023.

The basis of valuation for new entries in the Valuation List, and Rating Revision cases after 1 April 2023, is Schedule 12 (2)(1) of the Rates (NI) Order 1977.


This Practice Note refers to property classified as:

Class: Schools, etc.
Sub Class: School, School Meals Centre
Type: Nursery, Primary, Primary Private, Secondary Level, Special Care

Legislative background

Schedule 12 Part 1 Paragraph 1 of the Rates (NI) Order 1977 applies.

“Subject to the provisions of this Order, the Net Annual Value of a hereditament shall be the rent for which, one year with another, the hereditament can, in its actual state, be reasonably expected to let from year to year, the probable average annual costs of repairs, insurance and other expenses (if any) necessary to maintain the hereditament in its actual state, and all rates, taxes or public charges (if any), being paid by the tenant”.

Valuation approach for 2023

The Contractor’s method of valuation is to be retained as the approach for this type of hereditament.

The overall aim of the Contractor’s basis is to arrive at the effective capital value (ECV) that is then converted into annual rent. The primary method of arriving at ECV is to consider replacement building costs suitably adjusted.

Source: RICS guidance note: The Contractor’s Basis of Valuation for Rating Purposes 2nd edition August 2017, from the Joint Professional Institutions' Rating Valuation Forum which is made up of representatives of the RICS, the IRRV, the RSA, the SAA, LPS and the VOA.
The method is employed in the case of properties that are not normally let out, which by their nature do not lend themselves to valuation by comparison with other classes where rental evidence does exist, and which are not of the type where a valuation solely by reference to the accounts of the undertaking would be appropriate.

The recommended approach to valuation comprises five stages.

Stage 1: Estimated Replacement Cost (ERC)

Identify the extent of the rateable hereditament, then estimate the replacement cost of the buildings, site works, all rateable structures, and rateable plant and machinery within the property on an undeveloped site.

In order to achieve consistency, a unit cost approach using Cost Guides is the primary method adopted. This approach will include the prevailing costs in the identified location, the effect of any contract size, and any associated professional fees. VAT is excluded, as are any grants or donations.

There will be cases where it would be appropriate to cost a modern, simpler or smaller substitute to accommodate the Department of Education actual enrolment figures as at the AVD. The substitute would be of a design and specification that enables the use of the actual property to be carried out in a fully satisfactory manner with due consideration given to all building categories, that is permanent [Category 1], sports [Category 2] and temporary [Category 3].

See Appendix 1 (Schools Superfluity Application) and Appendix 2 (Category 1 to 3 Buildings)

Stage 2: Adjusted Replacement Cost (ARC)

The ERC should be adjusted to take account of the difference between the property, in its actual state, and the replacement property costed at Stage 1.

Stage 2 adjustments can be viewed from the perspective of an owner-occupier, as opposed to Stages 1 and 3 which are concerned with capital sums.

Allowances made at this stage are intended to reflect the disadvantages of a particular building (or an item of plant and machinery within it). These allowances are generally termed obsolescence.

If the valuer needs to consider disadvantages pertaining to the hereditament as a whole such as poor access, cramped site or poor layout, the adjustment should be made by a further explicit allowance at Stage 5.

Age and Obsolescence

For detailed consideration on application of obsolescence scales the valuer is referred to the LPS Reval2023 LPS Contractor’s Basis of Valuation.

It should not be automatically assumed that because a property is old it merits an allowance. In certain circumstances, age may be a positive asset or have little effect, for example prestige buildings such as town halls, art galleries or universities. Age in itself is not a disability but rather what flows from age.

The deficiencies that may be taken into account at Stage 2 can be grouped under the heading of ‘obsolescence’ and they are normally subdivided into the following types:

  • Physical obsolescence which relates to wear and tear of the building due to its age. Although age itself is not a justification for an allowance the tenant will reflect the prospect of increased maintenance and running costs in a rental bid.
  • Functional obsolescence may occur when the functional capability of the property is not comparable to new building or design standards in the sector.
  • Technological obsolescence is an extension of functional obsolescence and may apply where current technology has changed so radically that the actual plant and machinery to be valued or the building housing such equipment has become redundant.

Civic and Monsanto Obsolescence Scales

For Reval2023, LPS will apply both a Civics Obsolescence Scale and the Monsanto Obsolescence Scale as appropriate to property classes.

It should be noted that it may be appropriate to apply both the Civics and Monsanto A/O Scales within one hereditament to individual buildings according to building type/use. Fire Stations provide a good example of this where the main purpose built fire station would be valued by adoption of the Civics A/O Scale, but where stand-alone workshops (industrial) may be valued by adoption of the Monsanto A/O Scale. However, even in this example the valuer should consider the hereditament as a whole and whether such workshops are de minimis in terms of purpose, service delivery and impact on valuation for rating purposes.

External Sports Facilities at Civic Hereditaments

For certain types of external sports facilities located at civic hereditaments and valued on the Contractor’s Basis of Valuation, a discrete External Sports Facilities Obsolescence Scale is used. It should not be applied to the likes of pavilions, terraces and other building structures but rather for the valuation of external ‘artificial’ surfaces such as astro-turf, G3 and G4, tarmac and other such sports surfaces. For Reval2023, LPS will be applying the ‘Civic – External Sports Facilities’ Obsolescence Scale to externally provided pitches, tennis courts and other such external facilities.

Stage 3: Add the value of the land to arrive at Total ECV


The consideration of the land element comprises two stages. The first is to establish the capital value of the site of the hereditament. The second is to make such adjustments as may be appropriate having regard to the fact that the site has been developed with the actual buildings or other rateable structures on it. With regard to schools, the valuer should also be aware and account appropriately for land associated to any sports facilities/ pitches provided at schools.

The value adopted for the land should reflect all the advantages and disadvantages of the site and its location and assume the following:

  • The site is cleared of all buildings.
  • All services existing at AVD are available for connection.
  • There is planning permission for the subject buildings and their existing use.
  • No development potential exists over and above that required for the existing buildings or rateable structures on the land.

Stage 4: Apply the appropriate decapitalisation rate to the total ECV

Decapitalising the sum of Stages 2 and 3 by the appropriate rate converts the ECV to an annual equivalent. The decapitalisation rates are prescribed by legislation, this does not allow any degree of valuation judgement.

Lower rate: 2.27% - in the case of a healthcare, educational or church hereditament.

Standard rate: 3.4% - for all other types.

Stage 5: Review. Also known as the ‘stand back and look’ stage

This stage is used to consider if any further adjustments are appropriate. Any such adjustments must be made for specific reasons and cannot be used to circumvent the decap rate. Care should be taken to ensure they do not duplicate allowances already made at Stage 2.
Adjustments made at this final stage are to reflect factors that affect the value of the property as a whole, e.g. poor access, cramped site conditions, inadequate layout. This stage provides an opportunity to consider whether a pioneering allowance or allowance to reflect the “economic state of the industry” is appropriate.

The value arrived at in Stage 5 is rounded to produce the NAV.

For further details see the following documents:

  • RICS guidance note: The Contractor’s Basis of Valuation for Rating Purposes 2nd edition August 2017
  • LPS NI Reval2023 Rating Cost Guide.
  • LPS Reval2023 Contractor’s Basis of Valuation Practice Note


For advice on any aspect of this Practice Note contact LPS on 0300 200 7801.

Appendix 1: Schools Superfluity Application

1. Confirm Buildings GEA. Consider all building types to include permanent [Category 1], sports [Category 2] and temporary [Category 3].

2. Confirm Department of Education Actual Enrolment Number as at AVD. Overall numbers for both Primary and Post-Primary, include nursery school where it is integral to the primary school.

3. Run ‘Primary’ or ‘Post-Primary’ model based on DE Actual Enrolment Numbers applicable to AVD.

4. If ME GEA is greater than actual GEA, superfluity is not a consideration.

5. If ME GEA is less than actual GEA, establish superfluity factor.

a) Calculate area in excess of design requirement

b) Calculate area in excess of design requirement excluding temporary buildings [Category 3].

c) Superfluity factor = area in excess of design requirement excluding temporary buildings divided by the sum of the Category 1 buildings.

d) Adjust each Category 1 valuation line by that factor.

6.Apply superfluity factor only to the appropriate individual buildings at Stage 1 costing exercise.

7. Apply superfluity factor to developed site area at Stage 3 land value costing exercise.

8. No superfluity is applied to undeveloped site area.

9. No superfluity is applied to sports facilities within the curtilage of the school, such as pitches, tennis courts, floodlights, also commonly known as ‘Items’.

10. No superfluity is applied to external works factor of valuation.

11. All applied stages above will produce an adjusted NAV (reflecting appropriate superfluity application).

12. Any school built since 1/1/15 is excluded from consideration of superfluity, subject to exceptional cases which need further examination.

13. Nursery school: excluded from consideration of superfluity except as at point 2 above.

14. Where identifiable parts of Category 1 buildings are used for additional community uses over and above normal educational uses the superfluity calculation will exclude those areas.

15. Where superfluity allowance is >50%: careful consideration of that individual school is required. Each case will be dealt with on its own merits.

16. Careful consideration as to the application of superfluity will be required where self-funded facilities (for example as a result of a bequest) at a school exist, particularly where such provision has occurred post 2012.

17. School meal kitchen:

a)Where the kitchen provides meals for more than one school that kitchen hereditament is excluded from consideration of superfluity.

b)Where the kitchen provides meals only for the school to which it is related, any superfluity factor applied to the school will equally apply to the kitchen area.

c)LPS will distinguish a kitchen area (m2) to be excluded from the calculation in cases where the kitchen is part of one overall GEA on the survey.

18. Small Schools (Primary and Post Primary): Where the actual enrolment numbers are less than the minimum pupil number for DE Primary School Models or DE Secondary School Models, and the school size/m2 is less than the equivalent DE Model Area/m2 design size thresholds, a proxy MEA would be valued by an interpolation of DE School Models and published school pupil enrolment numbers at AVD.

If the actual school area m2 is less than the proxy MEA m2, no adjustment is made, i.e. the actual school is too small by modern standards for the number of enrolled pupils.

If the actual school area m2 is greater than the proxy MEA m2, the factor by which the Actual Area m2 exceeded the proxy model Area m2 is applied to produce a ‘small school adjusted’ NAV.

Note that in this proxy MEA modelling approach the calculation of the area in excess of design requirement does not distinguish between permanent and temporary buildings, with the resultant adjustment factor then being applied to all buildings.

Appendix 2: Building Category Definitions

Category 1 Buildings

Main school buildings whether of traditional or system build construction, intended for permanent use. Broadly these will comprise the following:

  • Class space and other teaching areas
  • Assembly halls, dining halls
  • Administrative offices
  • Staff rooms
  • Libraries
  • Kitchens
  • Music rooms
  • Sports halls and stores in Primary and Post Primary schools which are structurally an integral part of the main school buildings.

Excluded from the valuation:

  • Link walkways if only used for communication and storage.
  • Minor buildings (less than 26 m2) provided they are not used as teaching space or toilets.

Category 2 Sports Buildings

(i) Sports Halls include all sports halls and facilities in Primary and Post Primary schools where they are structurally not an integral part of the main school buildings. Standard ancillaries include WCs, changing rooms, toilets, viewing gallery and fitness room.

(ii) Other specialised sporting facilities not contained in buildings (e.g. tennis courts, open air swimming pools, athletics tracks etc) are costed individually.

Category 3 Temporary Structures

This category includes temporary buildings and hutted accommodation which has a temporary life and is not of the same standard as Category 1 buildings. Buildings within this category are normally used to provide overspill classroom accommodation, intended to have a relatively short use, and are of inferior construction/specification to those in Category 1.

Typically, Category 3 buildings will be sectional portable buildings on pier foundations. Although “HORSA” and similar sectional concrete buildings are not easily portable, they were originally intended to be temporary and should be included in Category 3 unless they have been substantially improved both internally and externally, and been brought up to the standards of Category 1 buildings.




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