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Decision details

Approval for extension of a new rent policy to apply during the ongoing UK response to the coronavirus

Decision Maker: Sam Fox (Director - Economic Development and Planning)

Decision status: Recommendations Approved

Is Key decision?: No

Is subject to call in?: No

Decision:

To apply a new policy to allow a one-month rent deferral (June 2020) for tenants affected by the Corona Virus, as of March 25 2020, to be recovered over the financial year 2020. This is a transitionary measure, following a two-month rent holiday enacted for April & May 2020.

Reasons for the decision:

The widespread effects of the Covid 19 virus mean that businesses occupying council’s flexible working premises are experiencing cashflow difficulties. In response to widespread requests, and some tenancy resignations (easy-in, easy-out incubation workspace terms with 1-month notice e/w), a two-month rent free period was agreed to cover April and May 2020.

With Covid 19 restrictions ongoing, requests are now being received for additional rent support beyond May 2020. Tenant businesses are not registered rate payers, and as such have not been eligible to claim assistance through the Small Business Grant Fund. These businesses may become beneficiaries of the Top Up grant, but eligibility criteria have yet to be established.

The proposed rent deferral will bring The Enterprise Network support offer in line with the approach adopted across the Council’s wider commercial estate (three- month rent deferral on request, April-June).

The exposure of the Council in cashflow terms is estimated at £25,000 per month, with the funds being recouped by the end of this financial year. The two-month rent holiday resulted in exposure of £50,000. If tenants give notice, the refund of deposit monies is estimated at £25,000.

The policy represents a transition from rent holiday to rent deferral in order to help TEN Centre tenants, by offering a one-month rent deferral (June) following a two- month rent holiday (April/May). The key points are:-

a. One-month deferment of rent
b. Rental income to be recovered over the financial year 2020
c. (Or the remaining term of the lease, if that is shorter.)
d. On equal instalments
e. No interest charge for the deferred rent
f. Retention of deposit monies
g. Furlough arrangement to ‘mothball’ offices over period
h. Aligns with Government policy re: landlord responsibility and block on evictions

The total exposure of the Council in cashflow terms is estimated at £25,000

I confirm that in making this decision I have considered the following in line with Wiltshire Council’s Constitution:

Key decision requirements: Yes

Views of relevant cabinet member(s), committee chairman, area board(s): Yes

Consultation with cabinet member(s), the Leader and Scrutiny (for Executive decisions taken under Emergency Powers): No

Consultation with local members (as appropriate): No

Consideration of the area boards and delegated decision checklist for officers on the issue of when and how to involve local councillors and area boards in decisions about local services: Yes

Implication of any council policy, initiative, strategy or procedure: Yes

Consultation in accordance with requirements and expectations of consultation with the public: No

Range of options available:No

Staffing, financial and legal implications: Yes

Evidence of due regard having been given to the Public Sector Equality Duty:
Yes

Risk assessment: Yes

Involvement of statutory officers and/or directors:Yes

Regional or national guidance from other bodies:Yes

The council’s constitution: Yes

This contract is suitable for execution under the e-signature process:NA

Alternative options considered:

An extension of the rent holiday for a further month was considered but when considered with the to-month holiday already granted, this would have a significant impact on Council finances.

A rent deferral for more than one-month was considered but this would not prevent the majority of tenant businesses electing to give notice. It would also be out of kilter with arrangements for the Council’s wider commercial estate.

Closure of the TEN Centres was considered, but Legal has advised the Council would be in derogation of the grant of lease and subject to damages unless we get written agreement from all the tenants of the property.

The only other option considered is to take no action which could result in increased impact on the business community and reputational damage for Wiltshire Council

Conflict of Interest: Not applicable

Background: By power given to me pursuant to paragraph 1 of Part 3 Section D2 of Wiltshire Council’s Constitution Scheme of Delegation to Officers (as last updated in February 2016) adopted by the Council at its meeting on 9th November 2010 or any subsequent successor constitution, I am authorised to make the above decision.

Contact: Sam Fox, Director Economic Development and Planning.

Publication date: 02/06/2020

Date of decision: 12/05/2020

Accompanying Documents:

 

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