To consider the write-off of a sum not exceeding £34,931 on a property in Tewkesbury, conditional upon the sum of £38,715.69 being first received; and subject to receipt of the sum of £38,715.69, to authorise the Borough Solicitor to release the legal charge upon the property.

That no remission be made in respect of the sum due under the legal charge on the property at 101-105 Queens Road, Tewkesbury.

9.1             The report of the Deputy Chief Executive, circulated at Pages No. 41-45, set out the details of a community grant previously provided to the Prior’s Park Neighbourhood Project to covert 101-105 Queen’s Road, Tewkesbury into a community centre within which to deliver a range of community facilities. The freeholder of the property was Severn Vale Housing Society and at the time of the grant award a full charge had been levied on the property for the grant, thus making Severn Vale Housing Society responsible for any repayment. Subsequent events had meant that Severn Vale Housing Society had asked the Prior’s Park Neighbourhood Project to leave the property and there was thus a need for the grant to be repaid. Since the grant award Members had made two amendments to grant the conditions applicable to community grants which affected the repayment amounts; those reduced the length of time a grant would need to be repaid over and allowed for a reasonable depreciation to be taken into account. The grant for 101-105 Queens Road was not subject to those amended conditions. Members were asked to consider applying those changes to the sum owed and to agree to write-off a sum, not exceeding £34,931, which was due under the legal charge by Severn Vale Housing Society on the property. This would be conditional upon the sum of £38,715.69 being first received; and subject to receipt of the sum of £38,715.69, to authorise the Borough Solicitor to release the legal charge upon 101-105 Queen’s Road, Tewkesbury. 

9.2             The Deputy Chief Executive explained that, in April 2010, the Borough Council’s capital grant programme had awarded a grant of £106,356 to Prior’s Park Neighbourhood Project for works to 101-105 Queen’s Road which included conversion of an existing retail unit into a suitable space for community use. Clear objectives had been placed on the award of the grant which included the provision of community and family based information facilities; accommodation for training programmes for 16-25 year olds; facilities for meetings of a residents’ panel; and facilities for children’s clubs and groups. Only £73,646.69 of the award was utilised to carry out the necessary alterations and the four key outcomes had been delivered to support enhanced community facilities in the neighbourhood. As the property in question was only leased by the Prior’s Park Neighbourhood Project, the Council, in accordance with its grant procedures, had placed a charge for the full amount of the grant onto the lease. In 2015, Severn Vale Housing Society had reviewed its assets and, as part of that review, had ceased its arrangement with Prior’s Park Neighbourhood Project and agreed to work with them to move the services provided to another building which was owned by Prior’s Park Neighbourhood Project; Severn Vale Housing Society, as the freeholder, was therefore required to repay the unused grant. The Council’s cooperation was required in order for Severn Vale Housing Society to be able to clear the charge from the Society’s freehold title.

9.3             In 2011, the Council had carried out a review of the conditions applied under the community grants scheme and had introduced a number of changes in the process of clawing back allocated grants. Prior to that, the capital grant conditions did not allow for any tapering of the clawback over time and calculated the repayment in full of any grant for the whole 21 years subsequent to an award. Members determined that those conditions were unreasonable and amended them to better account for the true cost of the works and the extent of community benefit. In 2015, Members had also agreed to reduce the term over which repayment was required and had reduced the overall period from 21 to 10 years.

9.4             In conclusion, Members were advised that the award of the capital grant in 2010 had been effectively utilised to provide much needed community space to support local activities which had benefited the lives of people living in Prior’s Park. Five years after the award of the grant, unforeseen circumstances had meant the property had been returned to the owner and another local community space was being used to maintain the work. As such a proportion of the original grant was due to be repaid to the Borough Council and, taking into account the subsequent review of grant conditions, it was recommended that depreciation and the new length of repayment amendments were applied to the debt. Members were asked if they wished to determine if they wanted to apply those conditions retrospectively.

9.5             During the discussion which ensued, a Member questioned who the grant had been given to originally and, in response, the Deputy Chief Executive confirmed that the grant had been given to Prior’s Park Neighbourhood Project but Severn Vale Housing Society had signed the charge on the grant on the basis that it was the freeholder of the building. This meant there were no implications for Prior’s Park Neighbourhood Project; there seemed to have been a lack of understanding about the issue on the part of Severn Vale Housing Society for which some apology had been made but the management team did now understand the situation. The Borough Solicitor confirmed that the Council was entitled to ask for the return of the full amount but the report recognised that there had been a change in grant conditions and asked Members to use their discretion to approve that. In addition, the Deputy Chief Executive advised that, until the charge was released, Severn Vale Housing Society was unable to let the property due to the charge and, as they had a willing tenant, there was a need to resolve the situation.

9.6             Generally Members were of the view that, as the money which was due would go back into the grants pot, it should be reclaimed so that it could be used for the benefit of the community as there were undoubtedly plenty of projects within the Borough that could use it. They were concerned about writing off such a large sum of taxpayers’ money without a good reason. It was also felt that there was a wider discussion to be had about affordable housing within the Borough and it was suggested that this should be an Agenda item for a future meeting.

9.7             The Chief Executive indicated that, for a number of months, the new management team at Severn Vale had been trying to change the way they did things and part of that was changing the way they dealt with the Borough Council. Officers had indicated that they would like to have a more constructive relationship with them and it was hoped that this would continue to develop; it was felt that, in this instance, there was a balance to weigh up between the importance of partnership working and of reclaiming funding. Members expressed the view that they wanted to maintain a positive and constructive relationship with Severn Vale Housing Society.

9.8             A Member proposed, and it was seconded, that the Committee did not accept the recommendation from Officers and instead enforced the original agreement. Upon being put to the vote the motion was carried and, accordingly, it was