Nottingham City Council is officially ending nominal ‘peppercorn rents’ for community buildings as it looks to set a balanced budget and avoid further Government intervention.
Community groups in Nottingham that brought social value have in the past been able to lease property from the authority for very small fees, some as low as £10 per year.
A review is already under way of existing agreements across the city and some organisations have been asked to start paying far more.
But the council has now developed an official change of policy on how it leases properties.
The Labour-run council must now, by law, set a balanced budget or face further Government intervention as part of an ongoing improvement programme.
One of the requirements of a Together for Nottingham Plan, drawn up to drive improvement, was to create a new Community Asset Policy.
This will make sure the council is not “giving away things for nothing” and instead coming to a “reasonable agreement” with groups in the community.
The draft policy was discussed during a scrutiny committee meeting at Loxley House on December 7.
Cllr David Mellen (Lab), the leader of the council, said:
“We are not as consistent and organised in our treatment of community assets in terms of buildings, so this policy is seeking to bring some regularity, some fairness and clarity in the way that we deal with them.
“So that people know, when they come to us and say they would like to have a community asset transferred to us, or we would like to take on this building and run it for community use, there is a very clear guideline in which that is dealt with.
“We know the council cannot do everything and that some services are better delivered and more efficiently delivered by the voluntary sector, sometimes the faith sector, out there in the community.
“We want to do that within a structure that gives us a situation where we are being consistent with groups, that we are not dealing with peppercorn rents or, actually, now in the situation where we are with our finances, giving away things for nothing, but actually recognising the social value that groups do provide and coming to reasonable agreements with them.”
A number of organisations in Nottingham have already faced reviews of their rents, including the Place Activity Centre in Sherwood, which faced a rent increase from £10 to up to £20,000 per year.
Nicki Jenkins, the director of economic development and property at the council, says the policy means any negotiations will start at ‘market-level rent’ and discounts will be applied if a group can demonstrate clearly its outputs and objectives have a value.
She added: “One of the first things we do need to consider when we are approached, or looking at a particular asset, is whether that asset is suitable for a community transfer or for use by a community.
“Some of that is about the group itself and their capacity and what they deliver, but it is also about the council’s ownership and whether there are competing demands in terms of, for example, whether we dispose of the asset and generate a capital receipt, which is very important to the council at the moment.
“Part of this policy is where we discount rents and the starting point for any rent or lease negotiations we have to start at market-level rent, but any discount from that we have to receive outputs or objectives back that we can put a value on.
“The reason for that is essentially we are financially supporting an organisation by giving them a property at a lower rate so we have to be able to demonstrate the council is receiving something back for that.”
Cllr Mellen said how an organisations proves it has social value will be somewhat “bespoke” depending on their outputs.
The policy will be put forward for adoption at an Executive Board meeting later this month.