Briefing Note to the Finance and Value for Money Wards All Overview and Scrutiny Commission 24 January 2014

Update on concessionary lettings of Council properties to voluntary and community sector organisations.

Briefing from the City Manager Property & Assets and Strategy and Partnerships Manager

1. Purpose of the briefing paper and summary

1.1 The briefing paper provides an update on new concessionary lettings granted or those existing lettings reviewed, during the period 1 January to 31 December 2013.

2. Background

2.1 provides financial and in-kind support to Voluntary and Community Sector (VCS) organisations. One form of support is through occupation of Council premises on concessionary terms where the VCS occupy premises either rent free or at a reduced rent. Currently 60 Council properties are occupied on this basis. Details are outlined in Appendix 1 to this Briefing Note.

2.1.1 Prior to the adoption of the Community Asset Transfer (CAT) Strategy there was an inconsistent approach to approving the occupation of Council properties by VCS organisations on concessionary terms. This led to a lack of clarity on the number of Council properties occupied by VCS groups and the services they provided for the local community.

2.2 Concessionary Lettings Process

2.2.1 Only not for profit VCS organisations are eligible to occupy Council premises under a concessionary lease terms. For new applications a building must be first identified as available for occupation. The organisation is asked to provide details of community services that justify the grant of a rent free concessionary lease. Where needed the Partnership Team provides support and advice to VCS organisations. A non financial ‘sponsor’ from a Service Area within the Council is also sought, to monitor the VCS organisation and ensure they continue to work towards Council priorities throughout the term of the lease. The review of expired leases follows a similar process.

2.2.2 Once the details have been collated the views of Elected Members are sought through the Portfolio Holder for Property and Finance and through consultation at Ward Member level. Other consultation is carried out with Service Areas appropriate to the concessionary letting under consideration. Should the new application or renewal of existing arrangements be supported, the Town Clerk is instructed to grant a concessionary lease under an Officer Authorisation. In line with the CAT Strategy, applications for concessionary leases of more than seven years requires Cabinet approval and will be the subject of a report to Cabinet .

2.3 Benefits of the Community Asset Transfer Process

2.3.1 There are many benefits for the Council in providing properties to the VCS on concessionary agreements. These include reducing the cost of holding empty properties such as savings on empty building rates, securing and maintaining the property. There are also the non financial benefits to the area from bringing a property back into active use.

2.3.2 Some of the benefits of providing Council property to VCS Organisations on concessionary agreements include:

providing greater financial stability which allows VCS organisations to generate further income to deliver projects securing external funding to improve the condition of the building and the environment within which improved services are delivered. providing greater community benefit over and above the loss of rent to the Council and bringing vacant properties that currently have little commercial value back into community use potential for increased partnership working within the VCS through sharing available property

2.4 Challenges of Implementing the CAT Process

2.4.1 Implementing the CAT process has proved more challenging than anticipated owing to a number of factors such as :-

Financial implications. It is estimated that if those properties occupied by VCS organisation on concessionary rent free terms, were occupied on commercial terms paying a full market rent, the Council would receive an additional rental income of £482,484. Appendix 1 shows the Estimated Rental Value for properties occupied on concessionary terms. Where the property is not considered to have any commercial potential the ERV is shown as 0. Service agreements – Following the implementation of the CAT Strategy, 27 organisations now have Service Agreements in place which recognise their occupation on concessionary terms. This will increase as property agreements are reviewed. Demand – the volume of new applications continues to grow and over 60 have been received from VCS organisations since September 2012. These have had to be processed whilst also formalising arrangements with existing occupiers in accordance with the principles established by the CAT strategy. Supply - the lack of vacant premises available to meet the demand from VCS organisations. Premises sought by VCS organisations are not always available. Organisations structure – there continues to be problems whereby organisations are not properly set up or constituted to allow them to sign a lease agreements which delays potential transfers. Funding – there continues to be a need for support to enable VCS organisations to apply for external funding needed to progress their proposals. Reluctance to Change – where organisations have occupied Council premises rent free for many years on an informal basis and where in some cases the Council has also paid for utility and other occupation costs. In certain instances VCS organisations are reluctant to move onto the Councils standard concessionary lease terms which although rent free places a greater onus on organisations funding other occupation costs. Commissioning – as the Council moves toward a more formal commissioning model for services from the VCS sector the relationship between the procurement of services and offering concessionary lettings of property needs review to ensure a level playing field for all bidders. Community Right to Bid – The introduction of this legislation and the obligations it places on the Council is being assessed as a separate work stream within the Council. That work is ongoing but will need to assess how it ties in with the Council’s CAT Strategy and any changes that will need to be made to the Strategy.

2.5 Progress on Concessionary Leases in 2013

2.5.1 In 2013 new concessionary leases were granted to The Vulcan Boxing Club for Heron Street (off the Boulevard) and Hull Athletics Sports Club were granted a concessionary lease of land within the Costello Athletics Stadium for siting of a re-locatable building to provide a meeting room/changing facilities. Terms have also been agreed and Legal Services instructed to grant new seven year concessionary leases to:-

Adsetts in respect of the Ings Resource Centre Friends of Library in respect of the library Hull & East Yorkshire Community Foundation (Big Local) in respect Block 5 Isaac Newton School Hull Wyke Rugby League Club – land at Cropton Road for development of sports club and changing facilities

2.5.2 Three Concessionary Lettings due for review in 2013 have been progressed to the stage where Legal Services have been instructed to complete a new lease. These include East Hull Community Farm in respect of land and premises on Barham Road, St Andrews Sutton Park Community Care in respect of the St Andrews Community Centre and a concessionary lease to formalise Child Dynamix occupation of premises north of Preston Road. The review carried out in respect of premises occupied by Enviromail in respect of the former B line premises off Beverley Road, was delayed by the need to establish those parts required for the Council’s own operational needs. That has now been resolved clearing the way to progress the grant of a seven year concessionary to Enviromail.

2.5.3 The review of premises occupied by South Community Association cannot be progressed further as the Association is not constituted in a way that would enable it to enter into a lease with the Council. There have been meetings with the Association and the Area Team where there is support for the Associations continued occupation of the building on the present terms due to the community services they provide.

2.5.4 Kingston Boxing have signed a new lease which has enabled them to secure external funding of £50k to improve and renovate the building.

2.6 Concessionary Letting Applications Work Programme for 2014.

2.6.1 The backlog of existing concessionary letting reviews that need to be carried out, and high volume of new applications that continue to be received, requires that concessionary lettings need to be prioritised in order that they can be completed within a realistic programme in 2014. Attached as Appendix 2 are those new applications that will be progressed to completion during the period 1 January to 31 December 2014. Appendix 1 also shows those Council premises already occupied by VCS organisations and which are due for review in 2014.

3. Consultation

3.1 Portfolio Holders and Ward Members continue to be consulted as part of the concessionary lettings process. Input is also received from Area Committees and relevant service areas. That feedback informs the outcome of those concessionary leases due for review and the grant of any new concessionary leases.

4. Options

4.1 Property Services, Legal Services and the Partnership Team are reviewing the current process to simplify and speed up concessionary lettings acknowledging the limited staffing resources available. In addition the need to formalise the arrangements for those organisations that currently occupy Council buildings that are not in position to sign a formal lease

4.2 There is also a need to address the eligibility of VCS organisations to occupy Council premises on concessionary rent free terms, whilst bidding to provide services for the Council. The Council needs to ensure there is a level playing field for those organisations invited to bid. The intention is also to introduce changes in process to ensure transparency and fairness

5. Conclusions

5.1 The Community Asset Transfer Strategy adopted in 2009 provides the current guidance for the transfer of property assets to the voluntary and community sector (VCS). The practices introduced in support of the CAT Strategy has ensured a consistent approach is taken and that as far as possible VCS organisations granted a concessionary lease deliver community services that align with the Council’s corporate priorities.

5.2 The sixty new applications received since 2012 indicates a continued strong demand for premises by VCS organisations. The reviews carried out reveal that in many instances the existing arrangements with VCS organisations pre-date the strategy, and are on an informal basis which has taken time to clarify and then progress with the occupier. This is against a backdrop of limited resources available within the teams and where negotiations for commercial lettings that produce rental income, or disposals that generate capital receipts have had to take priority.

5.3 Occupation of Council premises on concessionary terms have both financial and non-financial benefits. Concessionary lettings bring vacant buildings into beneficial use by the community and the Council makes financial savings on occupation costs. The adoption of the Strategy has provided greater clarity on financial responsibilities of the Council and lessee. This is critical in the financial planning needed to address the increasing pressures on the Council’s financial resources.

5.4 Introduction of the CAT Strategy has helped VCS organisations to successfully deliver community services on a sustainable basis. The limited number of vacant Council premises available for concessionary lettings will require the Council to steer VCS organisations towards hiring rooms or to share premises to make the best use of limited resources. It is proposed to make those improvements during 2014 without undermining the benefits introduction of the CAT Strategy has provided for both VCS organisations and the Council.

Joint Briefing of the City Manager Property & Assets and Strategy & Partnerships Manager

Contact Officers: Dave Bennett/Iain Atkinson Telephone Nos. : 612607/613879

Background Documents Minute 80 of the VFM and Overview Scrutiny Commission held on 25 January 2013 Community Asset Transfer Strategy – copy available on request Concessionary Lettings Policy – copy available on request Appendix 1 Schedule of Council Properties occupied by VCS organisations under concessionary terms.

Current Description of Service Service Agreement Tenant Tenure Annual Full Estimated Tenant Provision in place Status Type Start Date End Date Rent Annual rent Comments Education / Amazing Play - Land at Middleton Street Community Centre Current Lease 31 March 2005 31--Mar-2030 0 800 Balfour Street Community Centre- Community Area Team Land at Victor Street/Balfour Street Centre Current Licence 01 March 2003 None 0 7900 Review 2014 Bilton Grange Community Area Team Association, 30 Grange Road, Community Bilton Grange Centre Current Lease 11 April 1996 10 April 2017 0 14500 Education/ Butterflies Play Group, Priory Community Primary School Centre Current Licence 01 April 2012 None 0 6000 Review 2014 Carnegie Heritage Centre Ltd, 342 History Centre 31 December Anlaby Road Library Current Lease 01 January 2008 2032 0 7,400 Case Training Services, 70-76 01 December 01 December Charles Street Current Lease 1999 2024 0 15000 Choices and Rights Disability Adult Services Coalition, Tiverton House, Bransholme Current Lease 08 April 2010 07 April 2020 0 0 Coltman Community Care, Maurice Community Area Team 01 December Rawling Community Care Centre Current Lease 01 January 1996 2020 0 0 01 September Construction Works, 18 Ferensway Job Advice Centre Current Tenancy 2006 None 0 4000 Review 2014 Education/ Youth Services Courts Community Community Action Association, Courtway Road Centre Current Lease 25 Feb 2013 24 Feb 2020 0 0 Green Community Centre, Community Area Team Durham Street Centre Current Lease 30 April 2013 29 April 2018 0 6900 Area Team Tenancy Legal Services instructed to grant East Hull Community Farm Education Current at will None None 0 6,000 a seven year lease Eastmount Recreation Centre, Community Area Team No Formal Tenancy Waverney Road Recreation Centre Centre Agreement at will None None 0 4,250 Review 2014 Edinburgh Street Community Area Team Holding Community Association Centre Over Licence 01 January 2008 None 0 14,750 Review 2014 No formal Endike Community Care, 58 Hartoft base of Road Charity Shop occupation None None 0 2360 Review 2014 Building presently occupied without any formal agreement in place. Options for the future use of the building currently under consideration. Progression of Environmail application on hold Tenancy at pending consideration of those Enviromail, Beverley Road Training Current will None None 0 8,000 options.

City of Hull Sports and Community Sports Development 31 January Group. First Avenue social Hall Current Lease 01 February 2011 2016 0 0 Gillshill Pelican Pre- school Playgroup Gillshill Primary School Current Lease 18 March 1998 17 March 2018 0 130 Greenway Community Tenancy at Tenancy at Disbanded 13, Negotiations Gipsyville Community Association Centre Will Will 23 August 2003 None 0 4260 taking place with Playmates who also occupy the building

St Luke Street Goodwin Development Trust LTD 25 Hugh Webster House Current Lease 01 June 1998 31 May 2123 0 21500 Hull Athletics Club Costello Stadium Sports Development Lease Lease 01 August 2013 31 July 2020 0 Hull Council for Disabled People Ferensway 75 Equalities Current Lease 06 June 2011 05 July 2016 0 20,000 Cottingham Road 127-129 Strip of Hull Grammar School LTD land over filled in drain Current Lease 01 July 1999 01 July 2199 0 0 Sports Development

Hull Isberg ARLFC Coleford Primary School Current Lease 01 July 2011 30 June 2026 0 2500 Annandale Road David Lister 01 August Education and Sports Trust School Current Lease 01 August 2009 2016 0 0 Premises required by the Council for re-development. The Society is holding over under current terms pending re-location to Hull Playgoers' Society Ainthorpe Primary School Current Licence 01 April 1998 None 900 2500 alternative premises.

Hull resettlement Project Anlaby Road 537 Current Lease 10 July 2009 09 July 2034 0 0 Holding 01 November 01 November Hull resettlement Project Bourne Street 20 Over Lease 1994 2001 0 0 Review 2014 Holding 01 November 01 November Hull resettlement Project Russell Street 12 Over Lease 1994 2001 0 0 Review 2014 Holding 01 November 01 November Hull resettlement Project Harthill Drive 35 Over Lease 1994 2001 0 0 Review 2014 Hull Womens Centre Queens Dock Chambers Current Tenancy 01 January 1987 None 0 5600 Review 2014 Kingston Boxing Hessle High Road Sports Development Current Lease 29 April 2013 28 April 2020 0 0 Latitude Orchard Centre Area Team Current Lease 01 May 2010 30 April 2017 0 13250 13 December 12 December Minerva Social Enterprises Hull Gillett Street 57 and 67 Current Lease 2010 2017 0 4000 Goodrich Close Mitchell Area Team 05 December 04 December Mitchell Community Association Community Centre Current Lease 2005 1930 0 11750

North Bransholme Sports Forum Dales Fitness Centre (Split Site) Current Lease 23 Sept 2011 22 Sept 2013 0 12305 Staveley Road North British Housing Association Land East Side Current Lease 11 March 1999 10 March 2024 0 0 37th Ave North Hull Area Team 31 December North Hull Community Centre Community Centre Current Lease 01 January 1994 2018 0 12500 Review started but put on hold No formal pending the Council considering North Road - Gypsyville Multi base of using part of the building as a PANDA Purpose Resource Centre occupation None None 0 14500 Customer Service Centre

Pickering and Newington Development Association Rainbow Centre Current Gnd Lease 13 March 2006 12 March 2131 0 31500 Terms agreed for Pop in Association Lambert Street 78 Current Licence 01 June 1998 None 0 3100 freehold sale. Preston Rd Neighbourhood Holding Development Co LTD Bessingby Grove 45 Over Lease 01 July 2002 01 June 2011 0 1075 Review 2014 Area Team No formal Preston Road Family basis Community Association Preston Road Community Centre agreement Tenancy None None 0 9100 Review 2014 Review complete and Legal Services instructed to terminate NDC occupation by executing a No formal Deed of Surrender and to grant a Preston Road Youth basis of Tenancy seven year concessionary lease Preston Road New Deal Centre Site occupation at will None None 0 8654 to Child Dynamix PROBE Holderness Road 261 Youth Services Current Lease 01 April 2012 31 March 2019 0 10400 Area Team 16 February Riverside Community Centre Parkstone School Current Lease 01 February 1999 2024 0 8800 Rockford Rangers Amateur Sports Development Football Club Kinloss Garth 100 Playing Fields Current Lease 01 April 2012 31 March 2027 0 1000 Review completed and new Scrapstore (Hull Play Somerset Street 30 September concessionary lease with Resource Centre) (former school) Current Lease 01 October 1999 2007 0 6800 Scrapstore for signature Spring Bank Community Spring Bank Area Team Association Community Centre Current Licence 01 May 2005 None 0 16000 Area Team No formal St Andrews Sutton Park St Andrews Community basis of Tenancy Community Care Centre occupation at will None None 0 3,750 The Trustees of Hull Dockers 01 February Rugby Club East Park Rugby Pitch Current Lease 01 February 1997 2018 550 1500 The Trustees of The Hull Afro Carribean Association Park Street 25 & 26 Current Lease 02 March 2001 01 March 2026 0 6,000 Holding 09 October The Warren Queens Dock Chambers Over Lease 01 October 1993 1996 0 25000 Being reviewed 2014 19 October The Woodland Trust Middledyke Lane 1 Current Lease 20 October 1997 2396 0 1000 Trustees of Hull Homeless and Rootless Project Tower Street 10 Current Lease 01 July 1996 01 June 2021 1200 8,400 Area Team Review completed and Legal Victoria Dock Village Hall South Bridge 01 September Services instructed to grant a Community Association Road Victoria Dock Current Licence 1998 None 0 10500 seven year concessionary lease VIP Childcare Ings Resource Centre Current Licence None 0 01 September 2012 Legal Services instructed to grant a new seven year lease to 22,000 Adsetts..

Vulcan Amateur Boxing Club Heron Street Current Lease 27 March 2013 0 6000

26 March 2018

Sports Development Negotiations being progressed on the basis of granting the Walton Street Community & Leisure Goathland Close Walton Holding Association a seven year Association St Leisure Centre Over Lease 01 July 2000 31-Jun-07 0 15250 concessionary lease Goodwin Development Trust LTD Malmo Road Food Park Regeneration Services Allocated Lease 01 October 2013 30 September 2016 0 64,000 APPENDIX 2 New applications for concessionary leases prioritised for completion in 2014

Organisation Property Property match Property Description Property Expression Priority 1 - Service Member Cabinet Legal Services Actions/Comments Requirement identified Type of interest High 2 - Sponsor Consultation and report instructed received Medium 3 briefing paper status - Low status

Adsetts Offices Yes Offices Offices Yes Priority 1 Area Ward members N/A Yes Addsets selected after a Committee consulted and competitive bidding process. supportive Legal Services instructed to grant a 7 year lease Anlaby Park Library Yes Library Offices Yes Priority 1 Library Yes - leader N/A Yes In the process of becoming a Library Services decision record CIO to allow them to sign a lease Child Dynamix Premises to provide Yes The Hut' currently Offices Yes Priority 1 Sports Yes Ward N/A Yes Legal Services instructed to facilities for occupied under an Development Members grant a seven year lease childcare and agreement with learning PRNDC

Choices and Tiverton House Yes Property declared Offices Yes Priority 1 Housing & Briefing Paper N/A Proposal is to extend the Rights surplus as part of Well Being being prepared organisations current occupation Total Capital and for feedback from over those parts of the building Assets review the Northern Area that are presently vacant. Area Committee Committee has asked to be advised in a briefing paper once details of the project are known

First Avenue Shop premises Yes Shop premises Offices Priority 1 Sports Yes Northern Yes - Application considered and Boxing Club north of Orchard north of Orchard Park Yes Development Area Committee February supported by Committee in Park consulted and 2014 October 2013. Report being supportive of the drafted on the basis of seeking letting proposed approval for a 15 year lease. Hull and East Offices Yes Block 5 Isaac Newton Offices Yes Priority 1 Yes Ward N/A Yes Legal Services instructed to Yorkshire School Members grant a seven year lease Community consulted and Foundation supportive

Hull Wyke Playing Fields Yes Currently occupying Playing Yes Priority 1 Sports Supportted N/A Yes July 2013 Legal Services instructed to Rugby League sports pavilion at fields Development following receipt grant a seven year lease. Club Bricknell playing fields of briefing paper Cropton road

Methodist Offices Yes Derringham Bank Offices No Priority 1 Discussions held with the Area Homes team on 29 October to clarify interest. Methodist Homes presently occupy Council owned residential accommodation. The property needs to be vacated for refurbishment. The organisation is seeking alternative Council premises. However no suitable premises currently available. Unity in Premises required Yes Former Depot and Workshop/Offices Yes Priority 1 Economic Ward members Officer authorisation being Community for conversion into a area offices on Development consulted and drafted with a view to instructing managed Greenwood Avenue. & supportive of Legal Services to grant a 7 year workspace centre Regeneration application. concessionary lease. Partnership facility Services consulting with the portfolio holder.