City of York Council and operators GLL have confirmed that the LNER Community Stadium complex has been completed.
The project was agreed by the Council in 2008 with the original intention of opening the facility in 2012. At that time it had been expected that the section 106 contribution from the developers of the Vanguard shopping centre would have covered all the costs of the new stadium.
The reality is that taxpayers now face a £15 million+ bill.
There is likely to be an inquiry into how costs have escalated at the stadium. Even the taxpayers contribution agreed in 2017 (above) may be exceeded
Nevertheless the stadium will be a welcome addition to the City’s facilities, although it remains unclear when all services located there will actually be up and running.
York City’s next home fixture is scheduled to take place on 28th December.
The Council has issued a media statement saying that, with the final safety checks complete, the council and GLL will formally take control of the site from the building contractors on Friday 18 December.
The council and GLL are now working with partners to make sure residents benefit from the many sports, services and facilities it will host as soon as possible.
These include:
an 8,500 seater stadium for York City Football Cub and York City Knights
a community hub, including a library and community offices for York’s sports clubs
York Against Cancer shop and offices
NHS outpatient services
new swimming facilities, gym, dance studio and sports hall with spectator seating
Council Leader on “meet the people” Tour.
Budget consultation starts
City of York Council is asking residents and businesses to share their views on the council’s next budget, following the launch of the budget consultation this month.
Early in the New Year, councillors will have to set a budget for the next financial year (2021/22). The impact of the pandemic has been unprecedented and despite the Government’s promise to give councils everything they need, York faces a significant budget gap of over £15 million, an issue that has been compounded by successive years of Government funding cuts.
Whilst the council has continued to provide support for those who need it since the start of the pandemic, the full economic effects of coronavirus on our communities have not yet been fully felt. Therefore, the council’s initial focus for the 2021/22 budget is to stabilise the authority’s financial position, allowing the council to continue to deliver the services which have been so relied upon during this difficult year.
The council will also continue its £600m capital investment programme to accelerate economic recovery, whilst continuing to support local residents, businesses and communities.
This year, there are a number of different ways to get involved and have your say on the council’s next budget:
Complete the paper survey in Your Local Link, which is being distributed to all York households from 15 December. Please send this back to the FREEPOST address provided by Sunday 31 January.
Complete the online survey which closes on Sunday 31 January on our website
Join us for a live Facebook Q&A on 6 January at 5pm on Facebook
Attend our virtual decision making sessions: 12 January 2021 – 10am, 2pm and 5.30pm 13 January 2021 – 10am and 2pm
Still no environmental or economic impact assessment
Knapton Forest land
The Council has published a report on its plans to establish a new 50,000 tree forest on land near Knapton.
The scheme had been criticised as “impulsive” with taxpayers believing that economic and environmental assessments of the effects of losing such a large area of good quality farming land – located near to potential consumers – should have been completed first.
No such evaluations, or a cost benefit analysis, have been published in the latest papers.
The project – which does have some merits – will disappoint many Liberal Democrat voters who were promised that accessible public open space would be provided to offset the loss of green fields, to new developments, in the Westfield area.
Other open spaces and footpaths have recently also been sealed off by landowners, making informal leisure options even less accessible for many thousands of residents.
The report reveals that “£1.65 million was used in the land purchase in West York and a further £400,000 was approved for the purchase of adjacent land subject to negotiations with the current landowner (ongoing). Council also allocated £25,000 revenue funding (2020- 2021) rising to £50,000 in 2021/22 and 2022/23 to support woodland creation and this budget sits within the CSCP budget”
The Council says that it is still trying to access “external funding” to offset the costs of the project.
We will see.
No update is provided on the promise to purchase more potential woodland in “an area near to the inner ring road”.
There are many other sites in the City – already in public ownership – where more trees could be planted.
Existing tree stocks have been neglected in recent years with many “highway trees” now needing either crown reduction or crown lifting work. The Councils budget allocation for tree maintenance work has been inadequate for many years.
NB. The report lets slip that the completion of the land purchase was announced in a “LibDem media release in October”. At that time, the restrictions on revealing the site location – imposed by the Councils Executive at a formal session – had not been formally lifted. It is without precedent for a major Council decision to be formally announced by a political party in advance of the Council itself issuing a progress statement. Those concerned will no doubt be hoping that no one reports this indiscretion to the Standards Committee!
Faces closure within weeks unless bail out agree by York Council
A report to a York Council meetings shows its “Make it York” subsidiary could post a £1.2 million loss during the present financial year.
It means that the Directors of the, wholly Council owned, tourist business could be forced to wind up the organisation within the next few weeks.
The Council is being asked to step in and provide a substantial financial subsidy. The proposals include plans to;
Waive the requirement for MIY to make a revenue return to the council in 20/21 in respect of trading activity across the city centre
Defer the first two quarters rent due from MIY in 20/21 for use of premises on Museum Street and Silver Street offices
A loan facility from the council of £300k to be accessed by MIY only if necessary
provide a letter of guarantee to MIY with access to a maximum of £1m over the next 2 years should it be required.
MIY normally produces a net income to the Council of around £35,000. The company is responsible for tourist information services in the City, runs the Shambles market, organises special events like the Christmas Fair (cancelled this year) and promotes the City as a business destination.
Private sector membership of the organisation has collapsed in the wake of the coronavirus pandemic with the hospitality industry being one of the hardest hit. Redundancies at MIY are expected.
The immediate hit on the Councils budget will be the loss of income from the Shambles market. This will be in the order of £474,000. That figure may grow substantially if the organisations recovery plan is not successful during the next few years.
MIY is the second tourist organisation to seek taxpayers help. The Council agreed to provide a further £55,000 subsidy for Welcome to Yorkshire at its last meeting.
The York Council is set to admit that a deal to underwrite the construction of 3 restaurant units at the York Community Stadium, branded in 2017 as “highly risky”, has flopped.
A meeting next week will be told that the Authority must either lease the empty units itself or face an increase of £1.375 million in its contribution to the Community Stadium budget
The news comes one week after the authority was forced to admit that another restaurant, which it constructed as part of the Guildhall renovation project, will also remain empty. That restaurant was supposed to provide £150,000 a year in rental income which would have been used to offset the costs of the Council’s new Guildhall “business centre”.
2017 budget
The Council agreed in October 2017 to accept liability if the developers were unable to lease the Community Stadium restaurant units.
Now with “practical completion” only apparently a few weeks away, and the units still not leased, the Council must decide whether to reduce the sale price for the commercial block or to lease the units itself for 25 years.
Another option, offered by land investment company L&G, would be for the Council to, effectively, buy out their interest in the units.
A Council report says, “Accepting a lease of these 3 units would also enable the Council to facilitate subletting’s for the units to a wider market as the Council could review offers from local and smaller businesses that would not be considered under L&G’s corporate benchmark although subletting’s are subject to L&G’s approval”.
Maybe so.
But the hospitality industry has changed beyond recognition recently. Even before COVID struck, two of the adjacent existing restaurant units (not owned by the Council) had become empty.
Existing Monks Cross restaurants are struggling
It is likely to be some years before Monks Cross becomes a destination location with a high footfall.
The Council could also find itself competing against itself to let restaurant units at both Monks Cross and the Guildhall
The Council has not published a business plan which would guide its next set of decisions.
There should be no more ill considered adventures using taxpayers money.
The City already faces cuts to basic public service standards as a result of COVID. Taxpayers should not be expected to subsidise empty floorspace.
A report being considered by the York Council tomorrow reveals that repairs and the reconfiguration of the Guildhall will cost an extra £1.5 million on top of the previously agreed £20 million budget.
A different report recommends that the York Science Park Ltd company be appointed to run the proposed business start up centre.
The increased costs bring into further focus thepoor managementissues which have dogged the project since 2012.
The Council has made no attempt to update its business plan assumptions.
Two years ago it gave the go ahead to Option 1 detailed below.
It is now clear that the capital financing costs (and hence borrowing repayments) will be higher and that there will be no income from the proposed restaurant for the foreseeable future.
The income to the Council, from renting office space to Science City, is expected to be £160,000 a year.
Option 2 now looks like a much better deal for taxpayers.
Could things get worse?
Maybe.
Building works continue during the winter months with more delays possible.
The council would remain responsible for external maintenance of the structure and fabric of the complex, with the support of an annual sinking fund payment of £50k pa from YSPL as tenant.
Maintenance costs on this very old building have, in the past, been much higher.
Every November the York Councils Executive Councillors are asked to review its investment and borrowing strategy. A series of, what are termed, “prudential indicators” are published. They offer a guide for taxpayers on how their money is being managed.
Usually the item attracts little interest or comment.
This year may be different with todays national spending review likely to offer a guide on how the billions, currently being borrowed by the government to counter the pandemic, will be repaid.
The York figures do not include provision for the local impact of COVID.
The revenue budget does look set to take a £10 million hit next year with widespread cuts in services inevitable unless the government authorises an above average tax rise. Another option might be to allow Councils to borrow money to prop up day to day spending for a couple of years. This (unlikely) option would have an impact the Councils investment (capital) budget
But without that – and isolating the housing revenue account (which is funded from rents) – what is the current liability of York taxpayers?
The figures reveal that, from a starting position in 2016 when the authority needed to service £238,7 million of borrowing, by 2023 that liability will have increased to £338.7 million.
That is a 40% increase.
Should we worry?
The short answer is yes. The Council is required to make what is known as a Minimum Revenue Provision (MRP) in its revenue budget to cover principal repayments and interest charges on its borrowing. The proportion has varied over the years but usually around 12% of current account expenditure has gone on servicing debt.
York Council debt trend
That is set to escalate to 21% by 2024.
That could mean less money being available for core services such as road repairs, caring for the elderly and disabled and keeping the City clean. Many non statutory services such as leisure could be hit hardest.
It looks like the York Council will pay the beleaguered “Welcome to Yorkshire” (WTY) tourism body over £55,000.
The controversywracked regional body has lost a lot of subscriber income recently as a result of the impact of the pandemic.
Following a scandal about profligate spending, the organisation reformed last year and took on a Wakefield Labour politician as its chairman.
Ironically the Wakefield Council, along with Hull, is now refusing to pick up its share of the rescue package.
The reason for some scepticism is clear.
York businesses benefit from marketing campaigns aimed at getting more tourists to visit the region. The City is an obvious first port of call for foreign visitors in normal times.
The visitor economy will need help to get back on its feet over the next year or two. Visit York (part of Make it York) leads for the City on tourist promotion. Relations in the past with WTY have been strained with little evidence of coordination.
Improvements are planned and a Service Level Agreement has been published (click).
What the SLA lacks are measurable outcomes at street, shop, bar, attraction and bed occupancy level. This deficiency is shared in the rather woolly documentation which guides the Council’s, similarly uneasy, relationship with Make it York.
Make it York are expected to make a bid for additional funding at a Council executive meeting in December
WTY should cut back on its sponsorship activities. Tagging horse race meetings, cycle races, garden exhibitions, award dinners etc may be OK in good economic times, but not today.
It should focus on its core advertising programme and let local tourist bodies take the lead in attraction planning.
The most successful organisations are locally rooted and driven by committed, experienced leaders.
In York organisations like the BID have proved what can be done with relatively modest resources and good communications.
A report to a Council meeting next week offers a limited insight into the York Councils property dealings. It comes at an opportune time with various other Councils having been badly burnt recent by injudicious investments in land and property. Croydon and the Cambridgeshire County Council are both heading for the local government equivalent of bankruptcy.
Against that background taxpayers might would hope for York Councillors to now to adopt a more measured approach to investment. The commercial property market is likely – in the wake of the pandemic – to remain depressed for some time. It is not a good time to sell assets.
Instead we find a plan to borrow an additional £4 million on top of the £384 million already committed. That is a debt of nearly £2000 for every man, woman, and child in the City. 20% of tax payments will have to go towards paying interest charges.
This has remained empty since occupants were moved out – prematurely as it turned out – in 2016. The sale for a new care home to Ashley House fell through in early 2017. No attempt was made to find even a temporary use for the site which occupies a prime location near to local amenities and good transport links. Maintenance expenditure on the empty building continued to fall on taxpayers. Now the council is proposing an “off-market” sale to regional care home operator, Burlington Care Limited. The size of the offer has not been revealed. Ironically, the officer report admits “An open market exercise may be impacted by COVID 19 suppressing property values. The council budget has been significantly impacted by COVID and there is a need to realise value from vacant assets in the near future”
Another former care home, which has been empty for nearly 5 years, is Willow House. It is on a prime site located next to the city walls. The site was nearly sold for student housing in 2017 but ran into planning difficulties. Other offers were ignored by the Council and an offer from a company which utilises empty residential accommodation to accommodate the homeless in return for caretaking and security duties, was spurned. Now it seems that the Council intends to build 40 apartments on the site and will probably use its own “Shape” development company to manage the investment. The site is worth more than £2.3 million.
Willow House – empty for 5 years
Morrell House
An elderly person’s home empty since early 2018. No use has been found for the site. It is to be considered for use by “self-builders” but if that is not successful it will be sold on the open market.
Moor Lane car park
This is the site currently in use as a flu vaccination centre. It has mostly been empty for the last 4 years. There has been a lot of developer interest in building on the site. The Council has decided not to include it in the Council house building programme and may therefore sell it on. On the open market – even in these depressed times – it is likely to be worth less per acre than the Willow House site.
The sale of this home to private care home operator “Yorkare” has stalled. COVID is blamed
& the strange ones
Generally, taxpayers have benefited in the long run when the Council has bought land and buildings in the City. There have been exceptions. For example, when the authority impulsively sold the site now occupied by the Hiscox insurance company on Peasholme Green. Had it included a betterment clause in the sale then taxpayers rather than shareholders would have benefited from the subsequent increase in land values.
Knapton Forest
It looks increasingly likely that the purchase of good quality agricultural land near Knapton, with the intention of planting trees on it, may go into the same ill-considered category. When wooded, the area will not have a resale option but will involve an ongoing maintenance liability. 180 acres will support 50,000 broadleaf trees making a, carbon sequestration, contribution to the £1.2 trillion additional trees which would be required on the planet to reverse climate change! The £1 million project is also hailed as a major new passive leisure option for residents although, in truth, it is poorly positioned to make up for the open space lost in recent years to building operations in the City’s poorer areas.
Knapton Forest site
The major issue remains the lack of an environmental impact assessment. The land currently contributes to the local food supply chain. If the land is lost to food production, imports may increase resulting in longer transport chains and – critically – higher carbon emission levels. Storing carbon – like burying nuclear waste – simply pushes a problem onto the next generation.
The key to improving the environment is to reduce carbon emissions. Even the government seemed to recognise this, with its initiative yesterday aimed at replacing gas boilers with heat pumps and other benign energy sources.
Eco centre
The Eco centre is the small business facility at Clifton Moor which was promoted by the Council some 15 years ago. It was provided via a “design and build” contract on Council owned land.
Occupation levels have been encouraging although usually reflecting the general state of the economy. There are 63 individual units there. The Council currently leases back the centre and has managed the facility since 2015. The rent paid by tenant contributions is claimed to offset the current running costs.
Now officials are recommending that the Council spends £3.9 million buying out the interests of the owner of the building. The Council is not revealing how its business case figures stack up, but it claims that it may generate additional income by fitting PV (solar) panels on the roof.
Judged against the current economic volatility this looks like a high-risk strategy.
The plans for the non-listed section of the Guildhall have been an economic “basket case” for several years. The opportunity to sell part of the building for residential, retail or hotel use represented the least risk option and should have been pursued in 2012 when the building first became empty.
Guildhall
Instead, against a background of neglect and rapidly increasing repair costs, the Council opted for a risky plan to establish a hi tech small business start-up centre. The overall viability of the plan depended on letting part of the space as a high-end restaurant. The Council said it would run the unit itself.
£20 million of taxpayers money is at risk.
Now York University, via its Science City offshoot, has apparently offered to lease the business centre space at the Guildhall. Some civic and community use would continue. Science City has a generally good reputation and the offer to get the Council off its, self-inflicted, hook would seem to be an attractive one.
It is unclear how the success of the new enterprise would be judged. It is even less clear how the demand for City centre “incubator” space will mature in the wake of the pandemic.
The restaurant shell building will remain empty awaiting a resurgence of the local visitor economy.
The Council currently has a 9.2% minority stake in York Science Park Ltd. which it would sell.
The lease deal would be “off market” raising once again accusations of a “family and friends” approach to commercial dealings.
“Town and Gown” relations are already stressed in the wake of the pandemic and a perceived lack of accessibility for residents and visitors to the historic Kings Manor buildings in the City centre, which are currently occupied by the University.
The Council has pointedly not published updated business case figures which reflect the new offer being made as well as ongoing concerns about the cost of the renovation project..
Risk Management
On what must be one of the most risky approaches to the financial management of Council owned property, the Risk Management assessment included in the report amounts to only 7 lines of text and concentrates entirely on the planned bid for the Eco centre.
We are pleased to see that some York Councillors are stepping up to the plate and offering to make a personal contribution towards eliminating child hunger.
An emergency motion, proposing the provision of food vouchers for those entitled to free school meals over the CHRISTMAS holiday period, is being tabled at a Council meeting tomorrow by Labour. However it doesn’t identify how a local scheme could be fairly funded given the other pressures on the Councils budget.
Now Independent Councillor Mark Warters has submitted an amendment which, if passed, would freeze Councillors pay, with the resulting savings being diverted into the voucher scheme.
It a classic case of asking people to put their money where their mouths are.
NB. The Council has already agreed to find over £40,000 to fund vouchers during the current half term period.
