Questions received under council procedure rule 14:
(a) Question from Councillor R Allen to the Executive member for Finance:
“We note the news that UBS Asset Management have completed a £4.5m acquisition of the Sainsbury’s supermarket in the Crescent and, as ever, welcome investment in our borough.
Will the Executive member please confirm the return on this council’s investment in the Crescent scheme?
Will the Executive member further confirm that all loans in relation to the Crescent project have been repaid and cumulative interest received by this council on those loans, versus the interest paid by the council on all and any loans taken out to fund any aspect of the Crescent project?”
Response from Councillor Lynch:
“Return on Investment
The primary reason for the Council investing in Block C was to ensure that the whole Bus Station development was secured. Without this other investors at the time, such as Sainsbury’s were considering pulling out. Also the lead Developer would have found it unviable if we were not to have invested and there was either a risk of partial or even no regeneration meaning the desired economic and regeneration aspect would have been lost.
Net income from Block in 2019/20 before financing costs was £194k, after financing costs of £190.7k, the regeneration investment makes a small surplus of £3.3k. This is after allowing for any untenanted costs that the Council has to fund but excludes business rates that are collected from the development. Once the empty units are let, the return will increase substantially. The Hoped for rental of the two remaining units will be between £100k to £140k depending on future negotiations. Obviously the pandemic has had an impact on filling the units during the current year, which hopefully will change in the near future.
The direct return is not the only way in which the Council has benefited from the Crescent development. Whole site has rates of £0.6m, with HBBC being better off by its share being £0.24m. This add to the overall return. Block C’s element alone for business rates is £194.4k, the 40% HBBC element being £77.8k
Loans
Between 2012/13 and 2015/16 a total of £10.849m was financed, but only £5m was actual PWLB borrowing. The £10.849m financing was also in relation to the Leisure Centre (£4,931m) and Crescent Development (£4.060m). If an assumption is made that £5m loan was taken to underpin £10.849m of capital financing, the Crescent element of financing £190.7k, which is MRP of £135.3k and interest of £55.4k However, the split of the loan is notional for internal purposes.
The £5m loan, that has a notional allocation to Block C, will not be fully repaid for a further 42 years, as HBBC will be servicing HRA loans of almost £3m a year until 2037, therefore fits into a portfolio of debt financing to suit treasury management requirements .
There was a few short term loans amounting £7m to help with cash flows to the developer, but this has all been repaid and none was for over a year.
It is worth noting that loan decision are made in relation to treasury management requirements and not automatically taken out at the commencement of a project unless cash flow requirements merit.”
(b) Question from Councillor Ladkin to the Executive member for Finance:
“I would like to ask the Executive member responsible for a full and considered update on the planning and construction of the Hinckley crematorium”
Response from Councillor Lynch:
“Kier Construction have been appointed as the Main Contractor for developing Hinckley Crematorium. Following detailed talks, complicated by the Covid19 pandemic and Brexit trade negotiations, Kier have signed the JCT Design and Build 2016 form of contractwithin the project budget approved at the Extraordinary Full Council meeting of 14th July 2020.
I am pleased to announce that works will commence on site on the 11th January and are to follow a 50 week programme and we are now in preparation organising the Councils Wholly Owned Company to take occupation and run the future Crematorium Services for the benefit of the people living in Hinckley and Bosworth”.
(c) Question from Councillor Crooks to the Executive member for Planning:
“Can the Executive member for Planning please advise if there is anything that can be done through existing or proposed legislation to minimise and, if possible, prevent the removal of hedgerows from fields etc? We believe there has been an increasing number of hedgerows being removed as we see it through the planning process which appears at odds with our adopted position on climate change”
Response from Councillor Bill:
“Thank you Councillor Crooks for your question. I personally feel strongly about this topic as I am sure you and many more of my fellow Councillors do. Unfortunately I am sorry to report that our ability to protect hedgerows is quite limited.
However, if the removal of a hedgerow is proposed as part of a planning application then each case will be considered on its individual merits, taking account of ecology and its role in wider landscape terms.
The vast majority of new development seeks to retain the existing hedgerows albeit there may be requirements to puncture through parts of the hedgerow to form vehicular access etc. Officers in their assessment of applications also seek to retain hedgerows where ever possible.
As part of planning applications it is often conditioned that certain hedgerows are retained however the condition can only be enforced if the development has been commenced. If they remove the hedge prior to the commencement of development then there is no breach of planning control. There is no condition or agreement that can be put in place through the planning process that can prevent this from happening.
If work to a hedgerow is undertaken outside of the planning process, then regard should be had to the Hedgerow Regulations 1997. However, consent is only required if the Hedgerow is deemed “important”. This is defined within the Hedgerow Regulations 1997 Paras 1-8 and unfortunately I understand that only a small number of hedgerows fall into the category of requiring protection.
I would like to see stronger legislation to ensure we retain and protect as much of our important hedgerows as we can.”
Minutes:
(a) Question from Councillor R Allen to the Executive member for Finance:
“We note the news that UBS Asset Management have completed a £4.5m acquisition of the Sainsbury’s supermarket in the Crescent and, as ever, welcome investment in our borough.
Will the Executive member please confirm the return on this council’s investment in the Crescent scheme?
Will the Executive member further confirm that all loans in relation to the Crescent project have been repaid and cumulative interest received by this council on those loans, versus the interest paid by the council on all and any loans taken out to fund any aspect of the Crescent project?”
Response from Councillor Lynch:
“Return on Investment
The primary reason for the Council investing in Block C was to ensure that the whole Bus Station development was secured. Without this other investors at the time, such as Sainsbury’s were considering pulling out. Also the lead Developer would have found it unviable if we were not to have invested and there was either a risk of partial or even no regeneration meaning the desired economic and regeneration aspect would have been lost.
Net income from Block in 2019/20 before financing costs was £194k, after financing costs of £190.7k, the regeneration investment makes a small surplus of £3.3k. This is after allowing for any untenanted costs that the Council has to fund but excludes business rates that are collected from the development. Once the empty units are let, the return will increase substantially. The Hoped for rental of the two remaining units will be between £100k to £140k depending on future negotiations. Obviously the pandemic has had an impact on filling the units during the current year, which hopefully will change in the near future.
The direct return is not the only way in which the Council has benefited from the Crescent development. Whole site has rates of £0.6m, with HBBC being better off by its share being £0.24m. This add to the overall return. Block C’s element alone for business rates is £194.4k, the 40% HBBC element being £77.8k
Loans
Between 2012/13 and 2015/16 a total of £10.849m was financed, but only £5m was actual PWLB borrowing. The £10.849m financing was also in relation to the Leisure Centre (£4,931m) and Crescent Development (£4.060m). If an assumption is made that £5m loan was taken to underpin £10.849m of capital financing, the Crescent element of financing £190.7k, which is MRP of £135.3k and interest of £55.4k However, the split of the loan is notional for internal purposes.
The £5m loan, that has a notional allocation to Block C, will not be fully repaid for a further 42 years, as HBBC will be servicing HRA loans of almost £3m a year until 2037, therefore fits into a portfolio of debt financing to suit treasury management requirements .
There was a few short term loans amounting £7m to help with cash flows to the developer, but this has all been repaid and none was for over a year.
It is worth noting that loan decision are made in relation to treasury management requirements and not automatically taken out at the commencement of a project unless cash flow requirements merit.”
In a supplementary question, Councillor Allen requested figures for the total amount invested in the project, the total amount that had come back and the return on investment. In relation to the loans, he asked for confirmation of the anticipated interest payments.
In response, Councillors Lynch agreed to send a written response to Councillor Allen outside of the meeting.
(b) Question from Councillor Ladkin to the Executive member for Finance:
“I would like to ask the Executive member responsible for a full and considered update on the planning and construction of the Hinckley crematorium”
Response from Councillor Lynch:
“Kier Construction have been appointed as the Main Contractor for developing Hinckley Crematorium. Following detailed talks, complicated by the Covid19 pandemic and Brexit trade negotiations, Kier have signed the JCT Design and Build 2016 form of contractwithin the project budget approved at the Extraordinary Full Council meeting of 14th July 2020.
I am pleased to announce that works will commence on site on the 11th January and are to follow a 50 week programme and we are now in preparation organising the Councils Wholly Owned Company to take occupation and run the future Crematorium Services for the benefit of the people living in Hinckley and Bosworth”.
By way of supplementary questions, Councillor Ladkin asked whether reserves would need to be used to make up the shortfall due to the delay in the project, whether there would be financial penalties for the contractor should completion take longer than 50 weeks and whether the financial models that had been used to select the method of running the crematorium could be considered by the Scrutiny Commission.
In response, Councillor Lynch stated that the delays had been accounted for in the previous budget. He agreed to check whether the Scrutiny Commission had already reviewed the financial model and if not, ask them to receive a report. In relation to delays by the contractor, he explained that there could not be a penalty clause in a building contract, only liquidated damages claims for matters within the control of the contractor.
(c) Question from Councillor Crooks to the Executive member for Planning:
“Can the Executive member for Planning please advise if there is anything that can be done through existing or proposed legislation to minimise and, if possible, prevent the removal of hedgerows from fields etc? We believe there has been an increasing number of hedgerows being removed as we see it through the planning process which appears at odds with our adopted position on climate change”
Response from Councillor Bill:
“Thank you Councillor Crooks for your question. I personally feel strongly about this topic as I am sure you and many more of my fellow Councillors do. Unfortunately I am sorry to report that our ability to protect hedgerows is quite limited.
However, if the removal of a hedgerow is proposed as part of a planning application then each case will be considered on its individual merits, taking account of ecology and its role in wider landscape terms.
The vast majority of new development seeks to retain the existing hedgerows albeit there may be requirements to puncture through parts of the hedgerow to form vehicular access etc. Officers in their assessment of applications also seek to retain hedgerows where ever possible.
As part of planning applications it is often conditioned that certain hedgerows are retained however the condition can only be enforced if the development has been commenced. If they remove the hedge prior to the commencement of development then there is no breach of planning control. There is no condition or agreement that can be put in place through the planning process that can prevent this from happening.
If work to a hedgerow is undertaken outside of the planning process, then regard should be had to the Hedgerow Regulations 1997. However, consent is only required if the Hedgerow is deemed “important”. This is defined within the Hedgerow Regulations 1997 Paras 1-8 and unfortunately I understand that only a small number of hedgerows fall into the category of requiring protection.
I would like to see stronger legislation to ensure we retain and protect as much of our important hedgerows as we can.”
In his supplementary question, Councillor Crooks explained that his concern related more to removal of hedgerows on farms by the landowner rather than by a developer to make way for housing. In response, Councillor Bill undertook to ask officers to investigate further and he would provide a written response.