CX 08 94 Mgt & Restructuring Issues

CX/08/94 Farms Estate Committee 6 November 2008

COUNTY FARMS ESTATE MANAGEMENT & RESTRUCTURING ISSUES Joint Report of the Chief Executive and the Director of Finance, IT & Trading

Please note that the following recommendations are subject to consideration and determination by the Committee before taking effect.

Recommendations:

1. That the Committee approves the recommendations set out in the opening paragraphs of Section 1 to 7 of this report.

1.0 East Week Farm 2, South Tawton

1.1 It is recommended, given the three expressions of interest and the County Council's commitment to the principles of organic farming, that:

(i) subject to terms being agreed the 51.42 acres of land or thereabouts at East Week 2, South Tawton be re-let on a five year Farm Business Tenancy under the Agricultural Tenancies Act 1995 for a term commencing 25 March 2010 and terminating 25 March 2015

(ii) the three tenants at East Week be invited to tender in competition with each other for the tenancy

(iii) the successful tenant be obliged to maintain the organic status of the holding throughout the entire lease term provided it remains economically viable to do so. The tenant may apply at any time to the landlord to release the user condition with the landlord's consent not to be unreasonably withheld.

1.2 The parish of South Tawton currently comprises of the following three holdings:

• East Week Farm 1 – 20.92 hectares (51.70 acres) • East Week Farm 2 – 23.24 hectares (57.42 acres) • Lower East Week Farm – 25.47 hectares (60.93 acres)

1.3 The Approved Estate Plan proposes that East Week Farm 1 be retained as a progression farm with the farmhouse and buildings of East Week Farm 2 being sold, together with the farmhouse, buildings and 10 acres of Lower East Week, leaving 104.26 acres of land to amalgamate with East Week 1. In addition, it is proposed that 52 acres or thereabouts is migrated from Slade Farm, North Tawton to create a total enlarged holding of 218 acres or thereabouts. There is also the option available to the Authority to consider a whole parish in/out disposal/acquisition.

1.4 Members may recall considering Report CX/06/73 at the Farms Estate Committee Meeting of 24 July 2006 where it was resolved under Minute Ref. FE/48(f) that:

'following the surrender of the house, buildings and some land at East Week Farm 2, South Tawton:

(i) the semi-detached house of East Week 2, part OS5100, OS5600 & part OS5100 be declared permanently surplus to the operational requirements of the County Farms Estate and sold on the open market with Vacant Possession. (ii) the barn and OS4800 be declared permanently surplus to the operational requirements of the Estate and sold on the open market with Vacant Possession and the development potential of the barn to be investigated and if possible planning consent secured prior to marketing. (iii) OS5292 to be declared permanently surplus to the operational requirements of the County Farms Estate and sold on the open market with Vacant Possession, and with the development potential of the barns in OS5292 being investigated and if possible planning consent secured before marketing.

1.5 Members may also recall approving at the Committee Meeting of 21 November 2006 under Minute Ref: FE/65(c):

'the restructuring of land holdings at East Week Farms 1 & 2, South Tawton to enhance the pending sale of East Week Farmhouse 2 and preserve the latent development potential of the East Week 1 Farmhouse and traditional buildings' .

The details of this resolution are contained in the Chairman's letter of 25 October 2006.

1.6 East Week Farmhouse 2 and the adjoining land have subsequently been sold on the open market and the development potential of the East Week 2 Barns is currently being pursued.

1.7 Members will recall that the tenant of East Week Farm 2 only surrendered from his Agricultural Tenancies Act 1995 Farm Business Tenancy the farmhouse and buildings. He has retained occupation of the 51.42 acres or thereabouts of land. The Farm Business Tenancy is due to expire by the effluxion of time at 25 March 2010.

1.8 However, the current tenant of East Week Farm 2 land has expressed an interest in being granted a further Farm Business Tenancy of it beyond 25 March 2010. It is important to note that he converted the land to organic status and that it remains very much integral to his overall farm enterprise. The land affords him a greater economy of scale necessary to maintain a commercially viable organic enterprise.

1.9 It should perhaps also be noted that when East Week 2 was let to the current tenant, it was conditional on the tenant establishing an organic farming scheme contract and maintaining it as far as reasonably possible throughout the duration of the term. Neither tenant of East Week 1 or Lower East Week Farms farm organically.

1.10 That said, both tenants of the adjoining East Week 1 and Lower East Week Farms have also expressed an interest in having this land amalgamated to their holdings to enable their farm businesses to expand.

Members may also recall a recent resolution to grant an existing tenant an extended term subject to the following qualification:

'The tenant maintaining the organic status of the holding throughout the entire lease term provided it remains economically viable to do so. The tenant may apply at any time to the landlord to release the user condition with the landlord's consent not to be unreasonably withheld'.

1.11 Accordingly, therefore, given the three expressions of interest and the County Council's commitment to the principles of organic farming, it is recommended that:

(ii) the three tenants at East Week be invited to tender in competition with each other for the tenancy

(iii) the successful tenant being obliged to maintain the organic status of the holding throughout the entire lease term provided it remains economically viable to do so. The tenant may apply at any time to the landlord to release the user condition with the landlord's consent not to be unreasonably withheld.

2.0 Part Fairfield Farm, Denbury

2.1 It is recommended that, subject to the tenant's surrender of part Fairfield Farm, officers should discuss in principle and subject to contract terms and conditions for a fixed term licence/lease to the Denbury & Torbryan Allotment Association.

2.2 Officers have been approached by the Denbury & Torbryan Allotments Association (DATAA) to discuss in principle whether or not the County Farms Estate would enter into an agreement with them to provide allotments and community orchards.

2.3 The level of interest from the general public in taking allotments has, it would appear, increased exponentially. In anticipation of such a request being made to the County Council, officers sought legal opinion on the Authority's potential duty under the 1908 Smallholdings & Allotments Act. The legal advice confirmed that although certain Councils have a duty to provide allotments where sufficient demands exist, this duty does not extend to the County Council. That said, Section 15 of the Allotments Act 1922 gives County Councils the power (but not a duty) to 'let land acquired or appropriated by the Council for smallholdings for cultivation as an allotment, or to a Local Authority or Association, being an Association to which land may be let by a Council under the Smallholdings & Allotments Acts 1908-1919, for the purpose of being sub-let for such use'.

2.4 The Estate does already let two sets of allotments through the County Farms Estate. The first being the allotments at Bere Ferrers let to the Parish Council and the second, the allotments at Whitsun Farm, Tamerton Foliat let to individual licensees.

2.5 The current tenant of Fairfield Farm has indicated that he would be willing to surrender from his lease some land identified as potentially suitable by the DATAA.

2.6 Income potential to the County Council from letting this land for allotment purposes as opposed to agricultural is possibly greater, although initially, management costs may, conversely, be disproportionately higher.

2.7 It is therefore recommended that, subject to the tenant's surrender of part Fairfield Farm, officers should discuss in principle and subject to contract terms and conditions for a fixed term licence/lease to the Denbury & Torbryan Allotment Association.

3.0 Land at Rock Gardens, Monkerton, Pinhoe, Exeter

3.1 It is recommended that this land be declared permanently surplus to the operational requirements of the Estate and sold to Exeter College at market value, subject to terms being agreed.

3.2 Monkerton Farm currently extends to 15.87 hectares (39.1 acres) or thereabouts of accommodation land situated on the outskirts of Exeter. Although it ceased to be an independent, equipped farm several years ago, after the farmhouse and buildings were sold off, the land has been retained in view of its development potential. The land is currently let under short term arrangements, pending such times as all or part of it becomes prime for development.

3.3 In 2002, the Exeter Schools Reorganisation PFI required 10.34 hectares (25.55 acres) or thereabouts of land comprising fields 7254, 8957, 0062 & part 0051 as a site for a new secondary school. The land was appropriated to Education, Arts & Libraries, in accordance with the normal Council policy. The appropriation was approved at the Farms Estate Committee meeting on 11 March 2003 (Minute Ref: FE/95).

3.4 Furthermore, in 2005, the Environment Directorate required a further 4 hectares (10 acres) or thereabouts for a new link road connecting Sowton Industrial Estate with Pinhoe Road. This land was appropriated by the County Farms Estate Committee to the Environment Directorate at nil consideration at a meeting of the Committee on 8 March 2005. Minute Ref: FE/197(e)(i) refers:

'subject to the assurance of the Director of Finance & IT that the Farms Estate will be treated equitably (for Capital Receipts purposes) when the retained land is sold for development purposes' .

3.5 The County Council has recently agreed, subject to contract terms and conditions with Exeter College for the sale of a further 2.687 hectares (6.64 acres) or thereabouts comprising part OS3940 adjacent to Rock Gardens.

3.6 It is therefore recommended that this land be declared permanently surplus to the operational requirements of the Estate and sold to Exeter College at market value, subject to terms being agreed.

4.0 Topshayes Farm, Aylesbeare

4.1 It is recommended that in accordance with the agreed policy (Report CX/04/55) and committee resolution FE/175(a) of 23 November 2004 an additional two year Farm Business Tenancy be granted to the tenant of Topshayes Farm, Aylesbeare to commence 25 March 2011 and terminate 25 March 2013, subject to terms being agreed.

4.2 In accordance with current Estate policy, the tenant of Topshayes Farm, Aylesbeare has expressed an interest in receiving a ‘top-up’ to his 10.5 year Farm Business Tenancy of the holding to ensure he has a minimum term of 15 years on the Devon County Farms Estate.

4.3 The tenant of the holding came to the County Farms Estate as a new entrant at 25 March 1998 where he began his farming career at Blackenfields Farm, Luppitt, which was let as a starter dairy farm on a five year Farm Business Tenancy.

4.4 He was then granted a progression tenancy of Topshayes Farm, Aylesbeare for a term of 10.5 years commencing 16 October 2000 and terminating 25 March 2011. Effectively, if a Notice to Quit is served to take effect at 25 March 2011, the tenant will only have had 13 years on the Estate.

4.5 Topshayes Farm extends to 72.52 acres or thereabouts and is let with 600,000 litres of milk quota. In addition to the main holding, a further 49.95 acres of land and buildings at Little Allercombe, Rockbeare and 23.43 acres at Thorne Farm, Ottery St Mary are let by the County Council to the tenant. The tenant also takes a considerable amount of other land on private tenancies in the area. The tenant has established a successful dairy enterprise on the holding.

4.6 He has, during the tenancy, invested capital to improve the fixed equipment on the holding in an attempt to increase its earning capacity, thus enabling him to be in a better position to progress to a larger farm in the private sector.

4.7 In order to safeguard the minimum term possible on the Estate, the tenant has expressed a desire to secure this extension under existing policy. The tenant also reserves the right to seek a further extension under the exceptional circumstances policy should that be required at any stage.

4.8 It is therefore recommended that in accordance with the agreed policy (Report CX/04/55) and committee resolution FE/175(a) of 23 November 2004 an additional two year Farm Business Tenancy be granted to the tenant of Topshayes Farm, Aylesbeare to commence 25 March 2011 and terminate 25 March 2013, subject to terms being agreed.

5.0 Land at Stuckey Farm, Drayford, Witheridge

5.1 It is recommended that the site be declared permanently surplus to the operational requirements of the Estate and sold with first refusal being offered to the local Parish Council, subject to a restrictive covenant and other terms being agreed within a reasonable timeframe but failing that, the site to be sold on the open market.

5.2 The County Farms Estate granted the Devon Wildlife Trust (The Trust) a 20 year lease commencing 12 July 1989 of 4.25 acres of land at Stuckey Farm, Drayford. The Estate has no other land in the Parish.

5.3 It is assumed the Trust took the lease to establish a Nature Reserve. A Devon Wildlife Trust press release held on file from 1992 states 'Stuckey Farm is a good example of unimproved grassland which supports a rich plant community. As the site is also good for otters, one of the Trust's first management tasks will be to provide stick paths and bankside cover to encourage these elusive mammals' .

5.4 Leading up to the expiry of the lease, officers have enquired as to the Trust's intentions. The Trust have decided not to seek a renewal of the lease at Stuckey Farm and are happy to surrender possession back to Devon County Council on the expiry of the term.

5.5 The County Council's Environment Directorate have been consulted as to whether or not they would wish to take on the ownership, management and control of the Nature Reserve in house. They have indicated that the site is not of a significantly high importance to manage in hand.

5.6 The Trust have however confirmed that if this Authority resolves to dispose of its interests in the site, they would be happy to work with the Authority to try and establish the site as a community nature reserve, in association with the local residents and Parish Council, and would also be pleased to assist in setting up that arrangement.

5.7 It is therefore recommended that the site be declared permanently surplus to the operational requirements of the Estate and sold with first refusal being offered to the local Parish Council, subject to a restrictive covenant and other terms being agreed within a reasonable timeframe but failing that, the site to be sold on the open market.

6.0 Land at Higher Muddiford, Whiddon & Overcrockers, Marwood

6.1 It is recommended that: (a) the Council accept the tenant's Surrender of the two periodic Farm Business Tenancies of land at Higher Muddiford, and Whiddons & Overcrockers at short notice and effective at 25 March 2009.

(b) the tenant of Chapel Farm, Marwood be granted a 5 year fixed term Farm Business Tenancy of the 34.04 hectare (84.13 acres) of land at Higher Muddiford, Whiddon & Overcrockers commencing 25 March 2009 and terminating 25 March 2014, subject to terms being agreed.

6.2 Some members of the Committee will be aware of the ongoing restructuring of the Marwood Estate which has taken place over several years. The restructuring has resulted in the following Parish structure:

• Prixford Barton Farm (10½ year Farm Business Tenancy terminating 25 March 2018). 66.67 hectares (164.74 acres).

• Chapel Farm – total 70.06 hectares (173.13 acres) comprising:

(i) The main holding (Agricultural Holdings Act 1986 Lifetime Tenancy) 36.02 hectares (89.00 acres).

(ii) Land at Higher Muddiford (periodic tenancy under Agricultural Tenancies Act 1995) 24.17 hectares (59.73 acres).

(iii) Land at Whiddon/Overcrockers (periodic tenancy under Agricultural Tenancies Act 1995) 9.87 hectares (24.40 acres).

6.3 The restructuring achieved is entirely within the aims and objectives of the County Farms Estate Management Strategy & Plan.

6.4 Terms have been discussed with the tenant of Chapel Farm to regularise the two periodic tenancies of the amalgamated bare land holdings in order to justify a higher market rent and afford him greater security of tenure to encourage ongoing investment and improvements to the holding.

6.5 It is therefore recommended that: (a) the Council accept the tenant's Surrender of the two periodic Farm Business Tenancies of land at Higher Muddiford, and Whiddons & Overcrockers at short notice and effective at 25 March 2009.

7.0 Land at Markhams Farm, Ide

7.1 It is therefore recommended that the 26 acres of land or thereabouts known as Part Markhams Farm, Ide be re-let to the tenant of Markhams Farm on a 3 year Farm Business Tenancy Agreement under the Agricultural Tenancies Act 1995 for a term commencing 25 March 2009 and terminating 25 March 2012, subject to commercial terms being agreed.

7.2 The parish of Ide currently comprises of the following land holdings:

• Markhams Farm (11 year Farm Business Tenancy terminating 25 March 2012) 77.27 hectares (190.93 acres) • Part Markhams Farm (annual Farm Business Tenancy terminating 25 March 2009) 10.49 hectares (25.91 acres)

7.3 The approved Estate Plan designates Markhams Farm for retention as a 200 acre progression holding.

7.4 The part holding referred to above consists of 5 acres of bare land formerly of Aldens Farm, Alphington and 20 acres of bare land formerly of Markhams Farm, Ide. The latter of which was surrendered by the tenant in 1999. This land now referred to as part Markhams Farm has always been identified as having some realistic prospect of future development.

7.5 In recognition of the development potential, an option agreement was entered into with a national housing developer. That option agreement has now expired and has not been renewed. Furthermore, given the recent decline in the UK housing sector, it is suggested that any sale of this land prior to the housing market recovery would be premature and not in the best interests of the Authority.

7.6 As part of the 1999 surrender agreement, the tenant of Markhams Farm has had first refusal of renting the land on a series of annual agreements at a de minimis rent. That said, the Council also reserved the right to re-let the land on commercial terms should any development not proceed.

7.7 It is therefore recommended that the 26 acres of land or thereabouts known as Part Markhams Farm, Ide be re-let to the tenant of Markhams Farm on a 3 year Farm Business Tenancy Agreement under the Agricultural Tenancies Act 1995 for a term commencing 25 March 2009 and terminating 25 March 2012, subject to commercial terms being agreed.

8.0 Equality Considerations

8.1 There are no equality issues arising from this report.

Phil Norrey – Chief Executive

John Mills – Director of Finance, IT & Trading

Electoral Divisions: Hatherleigh and Chagford Teignbridge South Pinhoe and Mincinglake Budleigh South Molton Rural Combe Martin Rural Exminster and Kenton

Local Government Act 1972

Contact for Enquiries: Dan Meek, Senior Land Agent, NPS South West Ltd, Venture House, Capital Court, Sowton Industrial Estate, Exeter EX2 7LW

Tel No: (01392) 351066