Decision Maker: Parvis Khansari (Corporate Director - Place)
Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: No
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.
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
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, Interim Corporate Director - Place Email: sam.fox@wiltshire.gov.uk.
Publication date: 02/06/2020
Date of decision: 12/05/2020
Accompanying Documents: