Voluntary Sector Premises Forum

Voluntary Sector Premises Forum

Minutes 15th November 2017

Chair: Gemma Cossins (THCVS)

Presenting & taking questions: David Freeman (LBTH), Richard Chilcott (LBTH), Mohammed Ahad (LBTH)

Present: Debbie Bull (Scallywags Parent Partnership Nursery), Shahista Chaiwalla (Early Years Network Tower Hamlets), Jenni-Boswell Jones (AND Association), Shirley Bell (Wapping Community and Activities/TRA), Simon Rouse (Community Transport), Ismail Saray (ArtZone Co-op), Mostafa Kamal (Young News/Rainbow Film Society), Kirsty Cornell (THCVS), Joycelyn Hayford (Black Women’s Health and Family Support), Mike Smith (Real), Martyn Holland (City Gateway), Shafiur Rahman (Osman Trust), Nazrul Islam (Dorset Community Centre), Helen Forster (Working Well Trust), Michele Bailleux (Ocean Regeneration Trust), Jackie Remfry (Poetry in Wood)

In attendance: Jacqui Cocker THCVS (minutes), Shadique Gani (THCVS)

Apologies: Legal Advice Centre

Presentation from David Freeman

Meeting was devoted to presentation and discussion around new premises policy, as outlined in the following documents:

·  Community Benefit Rent Reduction Discussion Paper

·  Community Benefit Assessment Process

·  Community Benefit Assessment Procedure

David Freeman talked about background to this paper, i.e the Cabinet paper from November 2016 that laid out plans for allocation and charging for buildings on the council’s Community Buildings List. David has been employed to widen the scope of the policy in the light of concerns and unintended consequences of the previous paper. The new work covers 4 main areas:

i)  Opening up access to the rent reduction. It has already been agreed that access to the reduction should now applying to organisations and buildings beyond those listed on the ‘community buildings list.’ There is also potential for opening it to organisations that have contracts as well as grants, i.e those undertaking ‘economic activity’.

Organisations delivering contracts (with LBTH and others) are considered to be undertaking economic activity as procurement is a competitive process on the open market. Under the previous policy organisations undertaking economic activity were ineligible for any discount on their rent. The new proposal allows organisations undertaking economic activity that can demonstrate community benefit access to partial relief. The amount of discount could be based on the time used for pure ‘community activity (e.g funded by a grant or donations) and/or the amount of pace

ii)  Types and names of quality mark used to demonstrate community benefit. In the previous paper only one quality standard, PreVis, was named. Proposal in the new documents lists a number of alternative schemes.

iii)  Process for applying for rent reduction has been clarified, and makes allowance for organisations to access discount whilst in process of achieving their accreditation.

iv)  Introduction of stepped rent increases for organisations that are not eligible for any discount and need to be moved onto market rent.

The final report on this work will go to council January 2018

Questions and Discussion

Length of leases

·  Previous policy said rent reduction would only apply to leases of 5-7 years; is this still the case?

·  Increased rent may be more affordable over a long period of time; can leases be extended to 7 years?

·  R.C. confirmed leases would be 3-5 years. 5 year lease will be standard for groups that qualify. Option will be for stepped rent (for those not eligible for a discount) or rent reduction. All should have a quality standard to demonstrate they are properly run. Will be a case by case basis; as in previous policy, if a funder requires a longer lease in order to make a grant it might be possible.

Quality Standards, Community Benefit and Social Value

·  Note that not all relevant standards are included in list. AQS, the standard for advice giving agencies, should also be included; Matrix only covers employment advice.

·  Important to draw distinction between being a well run organisation (which is what a quality mark demonstrates) and providing community benefit. Many organisation with a recognised standard will be benefitting the community, and the quality assurance process will help them to do so in a proper and sustainable way, but QA accreditation and community benefit are not the same thing.

·  Need to consider market value in relation to social value. Social value not referred in the document

·  D.F. confirmed that community benefit discount (ie the rent reduction) is a reflection of council’s recognition of social value of voluntary sector services.

·  Community assets have been allocated and paid for in a range of ways over time. Some organisations have contracts with the council that do not include rental costs because council buildings were allocated to them and paid for separately by the local authority. Surely this is an acknowledgement that local voluntary organisations running contracts are also delivering additional social value.

·  Allowing organisations undertaking some economic activity to access proportional discount on (non-economic activity related) rent is welcome, but surely the Social Value Act highlights the fact that commissioned services as well as core services can bring social/community benefits. A locally based and run organisation running contracts that provide work opportunities for local people, is not the same as a purely commercial operation. If you can demonstrate that your contracts are delivering additional community benefit could there not be a case for rent reduction on that basis?

·  One unintended consequences of rolling out this programme could be that VCS orgs in council owned premises might be deterred from bidding for contracts because it would affect their rent levels

·  D.F: Legal view is that public law respects a level playing field for VCS and private sector and then makes adjustments via rent reduction and grants programmes.

Quality standard is separate from community benefit; the process of applying for and receiving the rent reduction looks at both community benefit and quality assessment.

Maintenance and Repair

·  Quality assurance requirement checks organisations’ quality of services but there isn’t any mention of the quality of buildings. If we want to run safe, accessible projects we need to be sure that buildings are in reasonable shape. Who is responsibility for maintenance of old buildings?

·  R.C Commitment to maintenance and repair is on community buildings portfolio only; doesn’t necessarily apply to every single council owned building. There’s no simple answer but market value is factored in. Repairs to buildings as and when; priority is to make buildings safe.

·  Additional conversation needed about repairs to buildings; what the standard should be, how to cover costs, ways to lever in external funding like Lottery grants.

Rent levels

·  If you’re trying to make a level playing field what about organisations who already have existing/historical arrangements (e.g peppercorn rent, long lease) that put them at an advantage compared to other organisations? What happens when they bid for a contract?

·  D.F. It’s true that some organisations do have existing arrangements. If leases haven’t expired then there’s not much we can do; we can’t go back and change past decisions – we can only work to make things fairer from now on.

·  Tenants of Montefiore Centre have seen rent increase every year; costs have increased very quickly; now paying full service charge, building insurance and VAT. Would be helpful to see an illustration of what might happen after 5yrs; will costs get so high that no one can afford them?

·  Also a tenant of the Montefiore Centre. Organisation had a block contract 2015. Level of funding has not increase over the years but rent has doubled. Now under threat of closure because they can’t cover costs.

·  D.F. Rents start at a low baseline in initial year, then plateau at 5 yrs. There will be a rent adjustment every 5 yrs

·  Market rent is what the market is prepared to pay; if spaces become unaffordable and organisations move out the council might need to reconsider

Economic Activity

·  Playgroups are not currently eligible for the rent reduction because it has been deemed that the work they are undertaking is economic activity. One suggestion has been that if playgroups need to raise more money to cover the cost of increased rent they can increase the number of places, but this would require extra capital funding. In the past, capital funds have been made available to Early Years providers, but not to those in council buildings, putting affected organisations at a disadvantage. VCS organisations are not sustainable so can’t pay their rent. Expanding buildings to take more children and raise more income has been suggested, but not all buildings are in suitable condition, have access to more space, or are adaptable.

·  Childcare providers in some council buildings were given capital to increase capacity

·  To tap into capital funding providers need a longer lease and more security; it’s a catch 22 situation.

·  Agreed that Playgroups should meet separately with David Freeman to discuss their concerns.

·  When assessing market rent presumably any restrictive covenant on the lease, will affect the level of market rent? Community Transport has a restriction saying that the land/building should only be used for that purpose.

·  D.F. Assume it would be.

·  We survive on fees from our vehicles. Would it still be reviewed as economic activity given restrictions on what we can do in our operating licence?

·  May be defined as economic activity but likelihood is that majority will be community benefit – will need to be assessed on a case by case basis

·  Quality of building has to be clarified. Use value is more important than land value

·  Not sure all economic activity the same. A commercial organisation making profit on a contract is not the same as a voluntary organisation accepting a loss in order to keep a service going. Hard to quantify your work; voluntary organisations bring in extra value like local employment opportunities, support for disabled staff, additional projects.

·  D.F. The problem is with the way services are commissioned. New council process following the principles of co-production. Looking at current contracts on a case by case basis

·  Not sure why stepped rent is only available to those organisations who do NOT qualify for a rent reduction. What about those organisations where the majority of their work is considered economic activity – they would only be eligible for a small discount on what might be a substantially increased market rent, making it hard for them to cover their costs in the short term.

·  D.F: Rent reduction has 3 levels 80%, 40% and 20%. For organisations only able to access a 20% discount the immediate shift to market rent, in some cases from no/very low rent levels might feel too steep so they may decide to go for a stepped increase toward full market rent.

·  Stepped rent is effectively subsidised but is not a rent reduction.

·  Is subletting allowed?

·  R.C. No subletting in new leases. Sharing and partnership allowed, check leases

Hubs

·  THCVS has had quite a few queries from organisations worried about their current buildings – i.e thinking that they might be earmarked for hub usage or for development. Are certain buildings ear marked for hubs? Is there a definite list that can be shared?

·  R.C. Nov 16 Report lays this out; hasn’t been any change to the policy since. Community Hub at Christian St is set up. Working on the next 3. Council is encouraging other orgs in buildings with space to operate as a hub. Developers might have potential hub space.

·  Can you commit to a transparent process? Would be helpful to map out where hubs are (council and other providers), look at costs of running them, discuss plans for future development

·  Information around planning (eg new development) can be hard to get hold of but happy to discuss Hbs more widely

Consultation and Next Steps

·  Consultation deadline is 6 December 2017. Starting point for implementation will be new leases. New policy will be applied when your lease comes up for renewal.

·  Will this be the policy of the council? Elections next year – new administration might decide to change things.

·  Premises forum January 2018 to look at final proposals

·  Early Years meeting with LBTH imminent.

·  Scope premises meeting January 2018

·  Report going to cabinet March 2018

·  Final paper circulated to everyone.

·  For written responses to the survey please look at the detail of the policy and consider what’s missing.

·  PLEASE COMPLETE THE SURVEY! Even if you agree with what’s being proposed it’s important to say so as it strengthens the case for these changes to the Nov 16 arrangements.

Future Forum Meetings

·  January meeting will look at policy

·  Meeting on Hubs at Christian St in Feb/March

·  Discussion about what we want in term of premises; what do orgs want and need in the borough.

·  Look at what other parts of the country are doing. Property very valuable in Tower Hamlets so policies from other places don’t translate to here.

ACTIONS:

·  DF to meet with Early Years organisations

·  Gemma to put all premises papers on THCVS website, continue running dialogue

·  THCVS to organise future Premises Forum meeting about Community Hubs

·  THCVS to look into ways we can work with LBTH to develop the quality of the buildings, health & safety, fire safety training

·  R.C to speak to S.B on individual basis re building in Wapping.