This page is going to be about voluntary sector premises issues in 2017. For background information on our premises work including last years premises forum meetings, the council's Community Buildings consultation and the working group and consultancy we co-ordinated in response, see our archive page.
Presently there are three main issues relating to premises that seem to be affecting voluntary organisations:
- The council's plans to implement a new Community Buildings policy, including the creation of Community Hubs and the introduction of new leases, rents and a rent offset mechanism for organisations that can demonstrate community benefit.
- Business rates;which are disscussed on our premises resources page.
- The wider need for affordable, appropriate community spaces; our venues directory might be useful for this in the short term, but more longer term work is needed and will form part of our premises forum discussion later in 2017.
The next Premises Forum meeting is on Tuesday 27th June at PDC in Bethnal Green. If you wish to attend please register your place here.
Council Community Buildings
The cabinet paper included the following recommendations:
1. Agree that a network of community hub buildings be established throughout the borough;
2. Agree the key terms for leases as set out in paragraph 5.3;
3. Agree that where community groups are to remain in existing accommodation, that this occupation will be on the basis of a formal lease with a community rent;
4. Agree that in some cases, THH-recognised TRAs, who can demonstrate intensive use of the property, may be issued with a lease based on a peppercorn rent for their TRA activities;
5. Agree the community benefit rent reduction policy, which affords eligible organisations a subsidy of 80% of their market rent, as set out in section 13;
6. Agree the proposed criteria, independent assessment tools and process and the monitoring and reporting arrangements for the community benefit rent reduction policy as set out in paragraphs 13.8 to 13.24;
7. Agree the proposed plan and approach for implementing the community benefit rent reduction policy, working with THCVS to support the voluntary and community sector organisations;
Progress and issues in 2017
One major concern for organisations in council owned premises so far has been the link between leases and grants. The condition of the council's Mainstream Grant state that:
"2.1.1 Council Premises - If the organisation becomes an occupant of premises owned by Tower Hamlets Council, the organisation must enter into a formal agreement within 3 months in order to formalise occupancy arrangements or the awarded grant may be witheld or terminated
2.1.2 Council Debtor - If the organisation becomes a debter to the Council at any time during the term of this Grant Agreement, the payment of any grant which is due will be witheld until such time as the debt has been cleared or satisfactory agreement reached in relation to repayment of the debt.
2.1.3 All necessary licences, premissions, certificates or consents relating to premises, equipment, machinery or services must be in place and up-to-date at all times"
Over the past few months the council's Property team have been visiting and assessing all their buildings in order to find out how regularly they are used, which organisations are using them, and to decide what the rent should be. Through this work it has become apparent some of voluntary organisations (both MSG funded and not) have only limited leases/licence arrangements with the council and/or are paying rent that is lower than the rates recommended in the Nov 2016 Cabinet paper. The council are keen to rectify this and to ensure fairness in the allocation of and payment for usage of community space; however the shift from (in some cases) peppercorn rents to market ones has resulted in some organisations seeing significant, unexpected increases in their rent, which in MSG holders' case is happening part way through a budgeted project. Whilst usually any lease negotiation would take some time, those groups with Mainstream Grants have felt pressure to reach agreement quickly as a delay of more than 3 months could cause their grant to be stopped.
One further stumbling block around the agreement of new leases has been the rent offset. The mechanism for assessing whether an organisation is entitled to the 80% community offset has not yet been fully established or tested, so it is not yet clear at the point of seeing the lease and the rent figure whether organisations (in most cases charities, where trustees have a duty to act prudently) are likely to be taking on the full rent or will only be required to pay 20%.
The issues around grants and leases have mostly come to light through dicussions at the Grants Scrutiny and Grants Determination Committees (in the very early part of 2017 it was at the Commissioners meetings) THCVS therefore wrote to the Commissioners and Mayor in January and February 2017 to raise concerns about the way the new implementation of the new premises arrangements were affecting organisations.
There have also been concerns about the issue of classification. At present, it is only buildings that are on the Community Buildings List (in the yellow section) that are eligible for the 80% rent offset outlined in the Cabinet paper. The buildings on the list are not the only council-owned premises that are currently being used by voluntary organisations, but they are the only ones that are officially classified as 'D1 Community Use' (explanation of planning classifications here). Our view, expressed throughout the development of the premises work last year, was that any access to discounted rent should apply to the organisation rather than be restricted by the designation of the building.
(We'll be updating this page regularly; more soon)