Exeter City Council has won a landmark court battle over the rateable valuation of the city’s Royal Albert Memorial Museum & Art Gallery (RAMM).
The Court of Appeal has dismissed a bid by the Valuation Office Agency to appeal against a ruling in favour of the museum at the Royal Courts of Justice in January.
That judgement, made by the Upper Tribunal, ruled that the museum’s rateable value could be calculated by receipts and expenditure, which considers whether the property makes a net surplus, rather than the contractor’s method, which assesses the cost of rebuilding.
The victory will see RAMM’s rateable value reduced from £445,000 to £1 and result in backdated savings of more than £1.5m. It is likely to change the way many museums in England and Wales are valued for business rates purposes and could result in significant savings, particularly for institutions in listed buildings with high operating costs.
Due to the importance of the case to the museum sector, Exeter City Council was supported by Arts Council England (ACE) and the National Museum Directors Council.
Sector bodies, including the Museums Association, have been part of longstanding efforts to change how business rates for museums are calculated.
A series of legal battles on business rates began more than a decade ago and accelerated after the 2017 revaluation, which saw a huge 48% hike in the total rateable value of museums in England and Wales.
Rachel Sutton, the council’s portfolio holder for climate and culture, said: “We are relieved by the outcome which is good news for RAMM but also the sector as a whole. Like all other local authorities, Exeter is facing huge financial challenges and the new rateable value will represent a substantial saving at a critical time.
“The judgment recognises the reality of the public subsidy required for a museum that is highly valued by its community but has an intrinsic cost. Many other museums and local authorities will find themselves in a similar position and our hope all along was that this judgment would also benefit other museums and the communities they serve.
Nicholas Serota, chair of ACE, said: “We were very happy to support Exeter City Council and RAMM in pursuing this case, and we are delighted that they were successful in defeating the appeal.
“This is a significant judgment which will benefit many museums across the country, ensuring that their resources can be used to concentrate on what they do best – conserving collections and delivering stimulating experiences for their communities.”
Colin Hunter, division director of rating at Lambeth Smith Hampton, acted as an expert witness at the hearing. He said: “This appeal is the culmination of several years of discussions and appeals on behalf of various museums, both local authority and independent museums… This decision goes back to first principles and explores what a reasonable museum tenant could and would be willing to pay in rent. The refusal to allow an appeal to the Court of Appeal should mean that this decision is the final word.”