Agenda item

To consider land and property assets that are surplus to service requirements and to ask Officers to investigate the potential for disposing of the assets or retaining them to provide an ongoing revenue return.

That it be AGREED that the following land and property assets are surplus to service requirements and that Officers investigate the potential for disposing of the assets or retaining them to provide an ongoing return:

·         MAFF Site, Tewkesbury.

·         Land off Evesham Road, Bishop’s Cleeve.

·         Land at Uckington.

·         All remaining retained garage sites managed by Severn Vale Housing Society.

19.1           The report of the Finance and Asset Management Group Manager, circulated at Pages No. 94-99, introduced a new framework for the Council to consider the use of its assets and Members were asked to consider whether or not the assets listed in the report were required for continued or future service use.

19.2           Members were advised that the Council held a limited portfolio of land and property assets of any commercial value but nevertheless retained a number of assets that were not required for current or future service use and did not provide a substantial community amenity. Councils were required to assess their assets to gain the optimal value and return either in terms of service delivery, financial return or reduced ongoing liability. The Committee was asked to consider a number of sites which included the MAFF site, Tewkesbury; land off Evesham Road, Bishop’s Cleeve; Land at Uckington; and all remaining retained garage sites managed by Severn Vale Housing Society. Any assets agreed for disposal would be dealt with in line with the Council’s Constitution and, where required, reports would be submitted to the Executive Committee for further consideration. The report currently before Members was intended as the first step in formalising the process for declaring any land and property asset owned by the Council surplus to requirements and would provide a formal and public declaration by the Council rather than maintaining the current ad-hoc arrangements for the disposal of individual assets. Previous reports on asset disposal had often included elements of a commercially sensitive nature, such as bid prices, and this had prevented the full report being aired in open business. Having declared a property surplus to requirements, the Asset Management Team would consider a number of options on whether the Council should retain the asset as part of the investment portfolio for letting purposes; retain the asset for redevelopment; or dispose of the asset and generate a capital receipt. By following the process outlined within the report, it was hoped that the Council would establish a robust and transparent position on each asset which would allow an early dialogue with both the community and potential bidders, whilst providing proper authority and disposal parameters from which the Asset Management Team could take forward the Council’s property ambitions.

19.3           In respect of the remaining retained garage sites, the Finance and Asset Management Group Manager advised that all of the sites were of a similar construction and age and ranged in size from 94m² up to 811m². The units were manufactured from a concrete frame and asbestos roof and were suffering from age. They were considered to be uneconomical to repair and maintain given the type of construction and the rental income from the units with no value in replacing them. In addition, many of the sites had suffered from various types of anti-social behaviour over the years. In terms of garage unit lets, around 20% of units were currently let to tenants of Severn Vale Housing Society and 45% were let to private tenants. Void units currently accounted for 35% of the total; a proportion that was increasing. The garages agreement with Severn Vale Housing Society allowed first refusal on the site to be given to Severn Vale Housing Society should the sites no longer be required for garage use. Should the Council wish to work with Severn Vale Housing Society to redevelop the sites, the Society would also be able to relocate many of the existing tenancies to other garage units within their stock. Officers felt that there was no service use going forward for the sites and the potential to do something different with them was interesting. It was hoped that Members would agree to undertake discussions with Severn Vale to see what might be possible.

19.4           During the discussion which ensued, a Member indicated that it was helpful to see the full list of garage sites and the areas they were located and he felt they should be considered for the development of affordable housing. In response, the Finance and Asset Management Group Manager indicated that they had not been looked at in detail yet and as such the optimum way forward was yet to be established; however, Officers would certainly bear that in mind as an option. Another Member questioned what was meant when an asset was described as ‘surplus to service requirements’. In response, he was advised that there were a total of around 5,000 assets in the ownership of the Borough Council; the vast majority of which were very small areas within developments. The term ‘surplus to service requirements’ meant assets that were not needed for operational requirements or had not been earmarked for service use. All of the assets needed to be reviewed but at this stage only the larger sites were being considered.

19.5           A Member expressed concern that, when the Council dealt with organisations such as Severn Vale Housing Society, it tended not to get the best market value for the asset and she asked for reassurance that current valuations for all of the assets would be sought and that, where possible, value for money was gained from their transfer. In response, the Deputy Chief Executive explained that the assets were part of the Council’s resources and therefore they had to be utilised for the benefit of the community as well as having a financial benefit. Any proposal in connection to the asset base would need a valuation and if it was proposed that they be disposed of at less than market value this would have to be a decision of the Executive Committee. In terms of the garages, the Finance and Asset Management Group Manager confirmed that they were all within the freehold of the Council and it would have to approach Severn Vale in the first instance if it was looking to develop them for social housing. Officers would be investigating the best package whilst taking account of all of the options. A Member expressed concern that many of the assets should already have been disposed of but that he would not want them to be disposed of now in a piecemeal way. In response, the Finance and Asset Management Group Manager advised that the reason for the current report was to look at the asset base as a whole, rather than independently, which was the preferred way forward. Members were generally in agreement that this was an excellent approach and they were pleased with the action proposed within the report. One Member did, however, feel that there must be proper research before the assets were disposed of and she suggested a workshop with Members to explore the options for the Council in developing sites would be helpful.

19.6           The Chief Executive advised that the disposal of some assets was about filling the gap in capital but also about allowing investment in other assets that would provide a better return. There was often a need to generate capital to gain a higher return. Having considered the information provided, it was