County Borough of Blaenau Gwent s4

COUNTY BOROUGH OF BLAENAU GWENT

REPORT TO: CORPORATE MANAGEMENT TEAM

REPORT SUBJECT: COMMUNITY ASSET TRANSFER, MARKET HALL CINEMA, BRYNMAWR

REPORT AUTHOR: PAUL MILES, HEAD OF ESTATES & STRATEGIC ASSET MANAGEMENT

LEAD OFFICER/ LEGAL & CORPORATE SUPPORT DIVISION DEPARTMENT

Summary Report

1.0 PURPOSE OF REPORT

1.1 To advise Corporate Management Team of progress with discussions over a proposed Community Asset Transfer of the Market Hall Cinema, Brynmawr to the Market Hall Cinema Trust and to seek approval to enter into an Operating Licence / Management Agreement with the Market Hall Cinema Trust which the Community Asset Transfer process is concluded in accordance with the Council’s Community Asset Transfer Policy.

2.0 LINK TO CORPORATE STRATEGIES

 Council’s Budget  Community Asset Transfer Policy  Corporate Improvement Plan 2008-12  The Community Strategy, Making a Difference  Corporate Asset Management Plan  Blaenau Gwent Regeneration Strategy

3.0 SUMMARY/PROPOSALS

3.1 This report provides Members with details of the progress of the proposed Community Asset Transfer of the Market Hall Cinema to the Market Hall Cinema Trust to allow the Group to manage / operate the premises by way of an Operating Licence / Management Agreement with the Council while the Community Asset Transfer process concludes.

1 4.0 PROPOSALS

4.1 That Corporate Management Team confirms the Market Hall Cinema Trust can operate the Market Hall Cinema, Brynmawr under an Operating Licence / Management Agreement while the Community Asset Transfer process concludes.

Detailed Report

1.0 BACKGROUND

1.1 The Council has operated a Cinema at Brynmawr Market Hall for many years. The auditorium has also been used by Brynmawr Operatic Society for its annual performance.

1.2 As part of setting the Council’s budget for the 2013 – 2014 financial year, a decision was taken to withdraw the revenue funding to operate the facility.

1.3 The Cinema currently has a “First Release Status” for films.

1.4 Following representations and protests from the community, discussions have been held with various groups regarding an Alternative Service Delivery model for the venue.

1.5 These discussions resulted in a business proposal being presented by the Market Hall Cinema Trust, comprising Peter Watkins-Hughes, Save Our Cinema Trust and Promo Cymru.

1.6 The business proposal has been considered in line with the Council’s recently adopted Community Asset Transfer Policy.

2.0 PRESENT POSITION

2.1 The Community Asset Transfer Policy has a number of stages, these are designed to ensure the Council is satisfied that the Organisation taking the transfer has the capacity to manage the facility on a sustainable basis.

2.2 The Council is supportive of continuing the service but delivering it in an alternative way, Officers have agreed that Stage One of the application is satisfied.

2 2.3 Stage Two of the process is where a business plan is developed by the third sector Organisation, this has, however, been included as part of their business proposal document and we have now concluded Stage Three of the process which requires Officers to provide a full assessment of the full business plan that has been submitted.

2.4 On the whole, the business plan has been well prepared and shows a good understanding of the business. Further information is being sought about the governance arrangements of the Organisation and the Chief Finance Officer has asked for clarity on some of the income assumptions made in the business plan.

2.5 During the discussions with the Market Hall Cinema Trust, it has become apparent that a key part of their business plan is that the Cinema is arguably the longest open Cinema (without a break) in the Country and that there is a need to keep the Cinema open without any break to retain its “First Release Status”.

2.6 Whilst the Market Hall Cinema Trust has submitted a strong business case it is clear that with work still to be done around many issues such as State Aid, Valuation, Legal Transfer Documentation, agreement of Maintenance Responsibilities and clarification of the governance structure coupled with the reporting requirements of the Community Asset Transfer Policy that a full Community Asset Transfer will not happen by 31st May 2013.

3.0 PROPOSALS

3.1 As mentioned in the Summary Report it is proposed that the Market Hall Cinema Trust are allowed to operate the Market Hall Cinema under an Operating Licence / Management Agreement to allow the work required under the Community Asset Transfer to be progressed and appropriate reports be submitted to the Council’s Corporate Asset Management Working Group and Executive in line with the Community Asset Transfer Policy.

3.2 Officers are satisfied that there is sufficient capacity within the Organisation to operate the facility until the Community Asset Transfer request is formally considered.

3.3 The Licence Agreement can be dealt with under the Chief Legal Officer’s delegated powers and will need to be drafted in such a way that it protects the Council’s position and allows for the recovery of the premises in the event that the Organisation does not comply with the 3 terms of the Agreement. 3.4 The maintenance of the building will be dealt with in accordance with the Council’s Community Asset Transfer Policy which has a presumption that any lease will be on a full repairing and insuring basis and that the third sector organisation will be responsible for all running costs of the asset. However because of the nature of services delivered from the Market Hall, some utilities and safety equipment serve the building jointly and it will be necessary that a clear split in responsibilities is agreed with the Market Hall Cinema Trust.

4.0 STATEMENT ON FINANCIAL IMPLICATIONS

4.1 The Council is meeting the cost of operating the Cinema until 31 st May 2013 from the existing Leisure Division revenue budget. The Council is not in a position to run the facility after this date as it will have no staff to provide the service.

4.2 There is a presumption in the Council’s Community Asset Transfer Policy that upon transfer of a property all costs relating to the operation of the building will become the responsibility of the Organisation taking the transfer of the premises.

4.3 The Council received a Welsh Government Town Improvement Grant in March 2009 for the improvement of the Market Hall Cinema, which is felt to be an important strategically located landmark within the town, there is a claw back condition within the grant, which runs until March 2014 and allows for the repayment of the grant on a sliding scale reducing by 20% per year.

The grant repayment upon disposal will therefore be approximately £32,000.00. The Head of Community Regeneration is in discussions with Welsh Government to see whether there would be a request for claw back upon the transfer of the premises to what is a community led social enterprise.

5.0 STAFFING/PERSONNEL ISSUES

5.1 There will be staff time in finalising the Community Asset Transfer process, which will need to be considered in the context of other priority work.

5.2 Staff working at the facility have either taken voluntary severance or offered redeployment.

4 6.0 CONSULTATION

6.1 The following have been consulted in respect of the recommendations set out in this report:

Human Chief Legal Chief Public Interest Other Reso Office Fin Test urces r/ anc Monitoring Monitoring e Officer Office Offi Approved r cer/ S.1 51 Head of Community Regeneration N/A    Chief Technical Officer Chief Finance Officer

6.2 I have specifically consulted Ward Members and Officers over the Market Hall Trust’s proposals.

6.3 Of the three Ward Members, two have responded supporting the transfer and one has not responded.

6.4 Consultation has taken place with relevant Officers of the Council and as mentioned at 2.4 above they feel that the application is very strong and subject to clarification of a strong governance structure and the income / expenditure assumptions the application fits in well with the principle of the Council’s Community Asset Transfer Policy.

7.0 STATEMENT THAT CONSIDERATION HAS BEEN GIVEN TO THE RELEVANT LEGISLATION

7.1 The application has been considered in accordance with the Council’s Community Asset Transfer Policy and its Strategy & Procedures for the Disposal of Surplus Land & property & Acquisition of Land & Property 2012 – 2015.

7.2 A Community Asset Transfer of this Property will need to consider among other issues State Aid, the opportunity cost of transferring the premises, legislation around the disposal of the premises at an undervalue, and Landlord and Tenant Law. The impact of this will be detailed when a report is presented to CAMWAG and Executive Committee.

5 8.0 CONCLUSION AND RECOMMENDATION

8.1 That Corporate Management Team note progress with discussions over a proposed Community Asset Transfer of the Market Hall Cinema Trust and allow the Council to enter into an operating Licence with the Trust on terms to be agreed while the Community Asset Transfer process is concluded in accordance with the Council’s Community Asset Transfer Policy as detailed in 3.0 – 3.4 of the detailed report above.

DYLAN JOHN CHIEF LEGAL OFFICER 2nd May 2013

PJM/CS