Agenda item

That

1.  The Director of Housing, Planning and Regeneration be authorised, in consultation with the Director of Finance and the Portfolio Holder for Resources, Commissioning and Contract Management, to negotiate Payment Management Plans with Voluntary Sector Organisations whose financial integrity may be significantly impacted by rental increases.

2.  A Payment Management Plan be considered where a rental increase of over 30% has occurred following a lease renewal or rent review on a Council owned property let to a Voluntary Sector Organisation.

3.  Payment Management Plans provide a stepped rental increase over a period of up to 3 three years with the rent payable on the third anniversary of the lease renewal or rent review being the Open Market Rent as determined at the prior (increased rent) lease event adjusted for subsequent CPI (Consumer Price Index) and with all future rents to be increased annually in line with CPI.

4.  It be authorise that a Payment Management Plan is a one-off transitional arrangement to allow a Voluntary Sector Organisation to adjust to the new increased rent.

5.  The Director of Housing, Planning and Regeneration be authorised, in consultation with the Director of Finance and the Portfolio Holder for Resources, Commissioning and Contract Management, to negotiate repayment plans or other suitable financial arrangements with Voluntary Sector Organisations outside of the parameters of a Payment Management Plans as set out in paragraphs 2.2 and 2.3 of the report. These arrangements may be up to a maximum sum of £50,000 or if higher only with of the approval of the Executive.

Report HPR2023/066

A Member request had been received for a report on the Council’s policy on rental subsidies for Voluntary Sector Council tenants providing community benefits.  This report provided an initial overview of the property portfolio held by the Council as it related to its leasing arrangements with Voluntary Sector Organisations. Further detailed investigations would be required to confirm the assumptions presented in this report.

The report had been scrutinised by the Executive, Resources and Contracts PDS Committee at its meeting on 27 November 2023 and the Committee had supported the recommendations and proposed the following additional recommendation:

2.6Authorise the Director of Housing, Planning and Regeneration in consultation with the Director of Finance and the Portfolio Holder for Resources, Commissioning and Contract Management to negotiate a revised lease term; where the tenant takes responsibility for repair and insurance of the property and it is at a revised rental that reflects these amendments within the lease.

The Executive were advised by the Director of Housing, Planning, Property and Regeneration and the Director of Corporate Services and Governance that the additional recommendation agreed by the Executive, Resources and Contracts PDS Committee duplicated existing delegated powers and existing practice and on that basis, it was agreed that there was no need to adopt the recommendation. 

The Portfolio Holder for Resources, Commissioning and Contracts Management proposed a minor amendment to recommendation 3 to ensure that the impact of inflation was fully reflected.  This amendment was supported by the Executive.

RESOLVED: That

1.  The Director of Housing, Planning and Regeneration be authorised, in consultation with the Director of Finance and the Portfolio Holder for Resources, Commissioning and Contract Management, to negotiate Payment Management Plans with Voluntary Sector Organisations whose financial integrity may be significantly impacted by rental increases.

2.  Consideration of a Payment Management Plan be authorised where a rental increase of over 30% has occurred following a lease renewal or rent review on a Council owned property let to a Voluntary Sector Organisation.

3.  It be authorised that Payment Management Plans provide a stepped rental increase over a period of up to 3 three years with the rent payable on the third anniversary of the lease renewal or rent review being the Open Market Rent as determined at the prior (increased rent) lease event adjusted for subsequent CPI (Consumer Price Index) and with all future rents to be increased annually in line with CPI.

4.  It be authorised that a Payment Management Plan is a one-off transitional arrangement to allow a Voluntary Sector Organisation to adjust to the new increased rent.

5.  The Director of Housing, Planning and Regeneration be authorised, in consultation with the Director of Finance and the Portfolio Holder for Resources, Commissioning and Contract Management, to negotiate repayment plans or other suitable financial arrangements with Voluntary Sector Organisations outside of the parameters of a Payment Management Plan as set out in (2) and (3) above. These arrangements may be up to a maximum sum of £50,000 or if higher only with of the approval of the Executive.