Issue - items at meetings - Blatchington Mill School Hockey Pitches

Report of the Strategic Director, Resources (copy attached).

2.1       That Cabinet authorises the council to grant a lease to the Hockey Club for 20 years at a peppercorn rent, when the Conditional Funding Agreement conditions detailed at paragraphs 3.3 and 3.4 are met, subject to Counsel’s opinion.

2.2       That Cabinet agrees that the Council loans Blatchington Mill School £350,000, funded through unsupported borrowing on the repayment terms set out in paragraph 5.1.

122.1          The Cabinet considered a report of the Strategic Director, Resources seeking permission for a land transaction to enable the funding for and construction of two all weather hockey pitches within the grounds of Blatchington Mill School for use by the school and leased to Brighton & Hove Hockey Club.

122.2          Councillor J Kitcat advised that the recommendations would be amended to make the decision subject to the opinion of Counsel, which had been sought in order to clarify the situation with regard to the restrictive covenants on the land. He advised that residents concerns had been considered and reported that twice as many letters of support for the project had been received from residents than those against it.

122.3          Councillor Mitchell raised concerns about the risk to the school of taking out a loan to fund their contribution to the project and that community use of the finished facilities would be squeezed in favour of commercial use in order to pay back the loan. She noted the legal issues raised during Public Questions and asked whether the Cabinet had seen the school’s Business Plan and could therefore confirm that there was no risk to the school; the council had a responsibility to ensure the school could afford the loan. She stated that the Business Plan should have been attached to the report, as a Part Two document, and that she considered the decision to be a matter for call-in.

122.4          Councillor J Kitcat confirmed that the council’s finance officers had checked the Business Plan and that the Cabinet relied on their advice; release of the Business Plan was a matter for the school and the hockey club. He advised that the council’s view was that the decision was legally sound, but was obtaining further legal advice in order to be certain.

122.5          The Chair advised that the Cabinet had not seen the Business Plan, but that they satisfied with the school’s decision and the advice from council officers; he did not deem it to be a matter for call-in as all aspects had been carefully considered. He advised that Sport England were investing in the project and considered it to be robust.

122.6          Councillor Bennett raised concerns that the school would concentrate on commercial use at the expense of community groups, and also about the financial risk to the school, particularly if the build costs were to exceed the budget or struggled to repay the loan. By offering the hockey club a 20 year lease, she felt that the school would be precluded from considering better development opportunities for some time and urged the Cabinet to reject landlord’s consent.

122.7          Councillor Janio acknowledged that the Business Plan had not been a material planning consideration, but stated that he considered it to be relevant to the decision before the Cabinet because the council would be financially responsible if the school could not pay back the loan. He requested to see the Business Plan and asked whether the Chief Finance Officer (CFO) could confirm whether it had changed following the restrictions placed on the development by the Planning Committee, and therefore whether it was still robust. He was concerned that the proposed development was not the best use of the site and that residents had been ignored throughout the process.

122.8          The Director of Finance (CFO) advised that she would provide a written response with regard to any changes to the Business Plan. She explained that schools were unable to borrow money themselves and therefore approached the council when seeking to undertake capital investment, with the council ensuring that the school could afford any loans. The council was not reliant on the school physically repaying the loan as it was able to top-slice the grant pass-ported to the school; consequently the council was confident of getting the money back. The management of school finance was legally the responsibility of school governors, and the approach taken on the development in question was not unusual.

122.9          The Chair noted that the project would be a resource for the city and welcomed the investment it would bring. He gave assurances that community groups would have dedicated time set aside to use the facilities.

122.10      Councillor Jarrett advised that the respective roles of governing bodies and local authorities were set out by the Government and that the council should not interfere in decisions made by governors.

122.11      Councillor G Theobald urged the Cabinet to take the views of ward councillors and their residents into account and warned that parents and children would lose out if the school was unable to repay the loan.

122.12      RESOLVED - That, having considered the information and the reasons set out in the report, the following recommendations be accepted:

(1)         That Cabinet authorises the council to grant a lease to the Hockey Club for 20 years at a peppercorn rent, when the Conditional Funding Agreement conditions detailed at paragraphs 3.3 and 3.4 are met, subject to Counsel’s opinion.

(2)         That Cabinet agrees that the Council loans Blatchington Mill School £350,000, funded through unsupported borrowing on the repayment terms set out in paragraph 5.1.

Note:      This Item was considered immediately after Item 112.