We call on the Council to ask Cabinet to immediately refrain from considering any future proposals in the current financial year for farm sales pending approval by Full Council of a County Farms Policy that has been properly scrutinised and includes a transparent and specific disposal/sales policy in respect of farms and farm property owned by the council.
We are calling on this due to:
- The ongoing uncertainty being caused to all County Farm tenants which is impacting their ability to effectively plan for their future business, livelihoods and housing needs;
- The concern that without such a transparent policy, the progression of farm sales is bringing the Council into disrepute; and
- The concern that without such a transparent and scrutinised policy, decisions are being made which may not be best value for the Council nor the best use of public resources.
Proposed by County Councillor Amanda Jenner
Seconded by County Councillor Gareth D Jones
Financial Assessment
The majority of the sales to date have come from vacant properties that were not viable to relet in their current condition and the amount of land to create a viable business opportunity. Where possible land has been reallocated to neighbouring farms to increase the viability, whilst reducing the maintenance liability of the council and still maintaining a regular rental stream from the remaining farms estate.
Over the last three years the rationalisation of farms and farmland has generated £2,875,500 in sales with a further £406,000 received so far in 2023/24. These sale receipts (capital receipts) are utilised to support the Councils capital expenditure reducing the need to borrow and saving revenue costs.
Using the £3,281,500 of capital receipts above instead of borrowing to fund the council capital programme, will save an estimated £197,000 per year to the revenue budget in reduced borrowing costs, over 50 years the total saving is £9,850,000. The councils farm estate currently includes holdings already approved for disposal of £5,725,000.
Other vacant holdings of £600,000 (which require investment of an estimated £100,000 before they can be relet) and further additional opportunities for rationalisation which, if released, would generate additional capital receipts estimated at £2,757,000. These include a farm where the tenant has recently passed away, other separate pieces of land and a specific piece of land required to support the Levelling Up project in Montgomery.
If approved this motion will prevent the release of the estimated £3,357,000 of capital receipts (outlined above) from currently unoccupied farms, whilst maintaining and in some cases increasing the council’s liability for these properties as a number are not in a condition to the relet or would not make viable businesses going forward due their size. This would also impact any further properties that become vacant due to various reasons, e.g. surrender of lease by tenant, death of tenant, tenants lease terms ending (where a further term does not form part of the existing agreement).
Having vacant/surplus properties unoccupied incurs costs to the Council to maintain them. Insurance, council tax and regular inspections to ensure they remain safe and secure would continue if sales cannot be progressed. There is also the risk of damage to vacant properties, vandalism, leaks and other damage, especially during the winter months.
Using the estimated £3,357,000 of capital receipts instead of borrowing to fund the council’s capital programme will save an estimated £201,000 per year to the revenue budget in reduced borrowing costs, over 50 years the total saving is £10,050,000.
Is should be noted that this motion goes against the councils The Corporate Asset Policy (CAP) which states: “To assist the Council in delivering the priorities of the Corporate Improvement Plan, the Council is committed to prompt and ongoing rationalisation of its buildings and land.” (3-A 1.1)
The motion also ties the council’s hands in making further decisions as tenancies that are due to end shortly become subject to review.
The financial challenge facing the Council in the next few years cannot be underestimated and to change policy independently now without considering the wider implications of the full budget proposal is not advised.
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Minutes:
Council debated the following motion proposed by County Councillor Amanda Jenner and seconded by County Councillor Gareth D Jones
“We call on the Council to ask Cabinet to immediately refrain from considering any future proposals in the current financial year for farm sales pending approval by Full Council of a County Farms Policy that has been properly scrutinised and includes a transparent and specific disposal/sales policy in respect of farms and farm property owned by the council.”
In moving the motion, Councillor Jenner argued that there was no clear process for the sale of farm sales in place. By 49 votes to 5 with 2 abstentions it was
RESOLVED to ask Cabinet to immediately refrain from considering any future proposals in the current financial year for farm sales pending approval by Full Council of a County Farms Policy that has been properly scrutinised and includes a transparent and specific disposal/sales policy in respect of farms and farm property owned by the council.