Briefing for:
Cc: /
  • Cllr Arthur, Cabinet Member, Resources and Culture
  • Jon McGrath, Assistant Director, Property & Capital Projects – Planning, Regeneration and Development
  • Shehnaz Begum, Senior Valuer, Asset Management

Title: / Hornsey Vale Community Centre - Issues briefing ahead of the Stroud Green Area Forum on Thursday 5th March 2015
Purpose of briefing: /
  • To provide an update on the lease position and current/future funding position for Hornsey Vale
  • To provide an official line of response to potential questions from the public or press

Lead Officer: /
  • Jennifer Layne, Community BuildingsOfficer, Corporate Property & Major Projects – Planning, Regeneration and Development

Date: / 3rd March 2015
  1. Background

1.1The Management Committee of Hornsey Vale Community Centre (also known as Stationers Community Centre), Mayfield Road N8 9LP hold a 20 year lease on the premises on a Circular Funded Rent arrangement. The lease expires in May 2016.

1.2The Community Centre offers a wide range of services through the hire of its halls, hosting activities such as martial arts, yoga, complementary therapy services, a regular playgroup and after school club during term time, with frequent holiday activities. Hall hire is also available for private functions.

  1. Contribution to the Community Building Review

2.1Hornsey Vale performed reasonably well in the Social Value and Organisational Compliance stages of the Community Building Review. The assessment process was undertaken by independent facilitators, Community Matters, the outcome of which was provided to Hornsey Vale at the time.

2.2The findings of the Community Building Review are due before Cabinet in this Summer.

  1. Lease renewal

3.1Corporate Property have been in dialogue with Lynne Brackley, the Chair of Hornsey Vale, regarding the lease renewal which is due in May 2016.

  1. Council Funding

Haringey Voluntary Sector Investment Fund

4.1Hornsey Vale was originally in receipt of Core Grant funding for the running costs of the organisation. The Core Grant Programme ceased in 2012 when the Haringey Voluntary Sector Investment Fund came on stream.

4.2The Investment Fund was a move away from voluntary sector reliance on historical grant funding for generic running costs and a move towards a commissioning-style approach for specific projects. The Investment Fund is currently managed by the Commissioning Team.

4.3In 2012, Hornsey Vale was successful in securing three year Investment Funding of £XXX[f1] pa for the provision of XXXX

4.4Their Investment Funding due to finish in August 2015[f2].

Circular Funded Rent

4.5The organisation is currently in receipt of Circular Funded Rent (CFR) for the equivalent real rent value of £29,750pa. This is ‘awarded’ on a three year cycle via Terms and Conditions of Revenue Grant Aid. This process is currently managed by the Commissioning Team.

4.6It should be noted that the process of Circular Funded Rent is a cashless internal transfer process and has a nil effect on the Council budget. The history of CFR is explainedin more detail at Appendix 1.

4.7As part of the agreed Community Building Review 2012 recommendations, Circular Funded Rent is being reviewed with a view to its cessation through a phased approach. Real rental income would then be due from organisations currently in receipt of CFR.

4.8The outcome of the CFR review and details of the approach to be taken will be presented as part of the Community Building Review Cabinet Report this Summer.

  1. Partnership working with Weston Park School

5.1The Council is aware that Hornsey Vale have approached the Head of Weston Park Primary School with a view to partnership working and the provision of integrated services.

  1. Potential questions arising and suggested lines to take

6.1It is suggested that the Council line to take is as follows:

Issue / Suggested line to take
Lease /
  • Aware that Corporate Property are arranging a meeting with the Chair of Hornsey Vale to address the lease concerns.
  • Not prepared to comment publicly beyond this point on confidential lease matters. Happy to discuss concerns privately.

Community Building Review /
  • The findings of the Community Building Review clearly illustrate the valuable services the management committee of Hornsey Vale provides and facilitates for the benefit of the local community.
  • The Review findings will be published this Summer.
  • Queries regarding the review can be directed to Jennifer Layne, the Community Buildings Officer at , telephone 0208 489 2778.

Funding / Investment Funding[f3]????
Circular Funded Rent – As part of the 2012 initial findings from the Community Building Review, the Council agreed to review CFR with a view to reforming it. This review is currently underway.
CFR review findings will be published as part of the Community Building Review report to Cabinet this Summer.
Any queries regarding funding can be directed to Charlotte Pomery, Head of Commissioning at , telephone 0208 489 3751.

End

APPENDIX 1

The History of Circular Funded Rent

  1. Why do a minority of community buildings attract circular funded rent (CFR)?

1.1.When funding was initially approved for some organisations part of the ‘funding package’ included a ‘free’ building (no lease or a long lease at a peppercorn rent).

1.2.In the mid 1990’s it was agreed that all organisations occupying community buildings should do so on a proper lease and, where it was possible under the terms of existing leases, the Council should negotiate with organisations to put in place a proper market rent value. This would be in line with best practice and in order to establish a fairer, more consistent process that recognised – both for the organisations and the Council – the support the Council was providing. This meant that the value of the building became recognised as part of the annual award made to the organisations.

1.3.For example: The Cypriot Centre

Grant paid direct £55,000

Rent value£40,000

Total Grant£95,000 of which £55k is cash

1.4.However, this arrangement, known as Circular Funded Rent (CFR), only applied to buildings:

1.4.1.which had existing tenants occupying the building

1.4.2.where the initial rent arrangement was at a peppercorn

1.4.3.where the Council had no expectation of income from these buildings built into the Council base budget.

1.5.Rent review increases are currently part of this CFR arrangement.

  1. How it works

2.1.CFR is a paper exercise for the Council which is controlled by the Finance Service. It has a NIL effect on the Council budget. This is visually demonstrated below:

2.2.No direct funding payment is made to the organisation as payments are made by internal transfer. However, what it does mean is that once this arrangement is in place, even if no other grant payment is made directly to the organisation (e.g. The Selby Trust), the building is valued in funding terms. This constitutes a ‘grant’ which means these organisations are required to sign and abide by the Council’s Terms and Conditions of Revenue Grant Aid. This gives the Council greater control over the activities and governance of organisations occupying its premises. In addition organisations must acknowledge the Council’s contribution in their Annual Audited Accounts.

2.3.The awarding of grant under the CFR arrangement was put in place to address historical irregularity. It is not expected that any new occupation of a community building by a voluntary or community organisation (VCO) will qualify for this arrangement.

2.4.Organisations in the CFR arrangement are:

2.4.1.The Cypriot Centre

2.4.2.Greek Cypriot Women’s Organisation (surrendered lease, relinquishing right to CFR in July 2013)

2.4.3.Hornsey Vale Community Centre

2.4.4.Haringey Racial Equality Council

2.4.5.The Irish Centre

2.4.6.Kurdish Community Centre (Stanhope Gardens)

2.4.7.The Selby Trust for the Selby Centre

  1. Why are some organisations occupying Council buildings and in receipt of grant aid not in this funding arrangement?

3.1.There are 2 main reasons why some VCO’s who are grant aided are not in this CFR arrangement:

3.1.1.The existing lease to those in buildings which have a ‘peppercorn rent’ does not make provision for an increase of rent through the rent review or there is not a rent review included in the lease. These organisations are:

3.1.1.1.Markfield Project

3.1.1.2.Jackson’s Lane Community Centre

3.1.1.3.African Caribbean Leadership Council

3.1.1.4.Council of Asian People

3.1.1.5.UK Islamic Cultural Centre

3.1.1.6.Hornsey Historical Society

3.1.2.The organisation had a ‘real rent’ contribution awarded in their grant or, although grant aided, the organisation was expected to meet rent costs in full or in part from other income streams. This would include increases to rent following any rent review. The rent element of the grant came directly from the Voluntary Sector Core Grant Programme base budget. However, the Core Grant Programme ceased in 2012 when the Council moved to a commissioning-based approach to funding. Organisations who were originally in receipt of a ‘real rent’ contribution were:

3.1.2.1.Mind in Haringey

3.1.2.2.Bangladeshi Women’s Association

3.1.2.3.HAVCO[1]

3.1.2.4.Haringey Senior Citizen’s

3.1.2.5.JAN Trust

3.1.2.6.Kurdish Advice Centre

3.1.2.7.Age Concern

3.1.2.8.Haringey Disability Action

3.2.The remaining organisations in the community buildings portfolio (of 27 buildings in total) have not been awarded a grant from the Council and are therefore required to pay the rent to the Council from their own income sources.

[1] As at February 2014, HAVCO may still be in receipt of ‘real rent’ grant aid from the Commissioning Team.

[f1]Commissioning to provide the detail

[f2]Commissioning to confirm whether there is another funding cycle? If so, have Hornsey Vale applied? If the Council is ceasing the Investment Fund, Commissioning to provide the official line to take.

[f3]Line to take to be provided by Commissioning.