Agenda item

Report attached.

The Cabinet considered a joint report of Councillor Kimberley Whitehead, Portfolio Holder for Culture, Heritage and Arts and Councillor Vanessa Alexander, Portfolio Holder for Resources and Council Operations, regarding continuing the support for market traders decanted into the temporary cabins on the market square through increased rent and licence fee concessions.

Councillor Whitehead provided a brief introduction to the report.  She noted that Market Hall traders and the Official Accrington Stanley Supporter Trust (OASST) shop had temporarily relocated during the refurbishment works.  This was likely to be completed at the end of this year.  The Council had agreed to continue to provide financial assistance to these traders during this period of disruption, or until the Market Hall re-opened, whichever came first.

Councillors Walsh and Whitehead had met recently with another business affected by Levelling Up Funded projects, Chocky Mike’s, about a possible move to Broadway.  This would help to ensure that the majority of units on Broadway were filled.  Councillor Walsh commented that it was good to see that the Council continued to support local businesses in this way.

Councillor Khan welcomed the support provided to Market Hall traders, but expressed a hope that businesses would not come to expect and rely on subsidies over the longer term.  The Leader noted the possibility that the Market Hall project could overrun slightly which might need to be taken into account for the purposes of ending all concessions/financial support granted to these traders.

Approval of the report was not considered to be a key decision.

Reasons for Decision

Trading conditions on the high streets were still extremely difficult and whilst some of the market traders on the square reported an improvement due to the market’s temporary location, others had signalled a decline in footfall levels due to the redevelopment works around the town square, the weather conditions, general downturn in the economy and sharp rise in the cost of living.  The Portfolio Holder had received requests from market traders asking the Council to revisit rent and service charges or risk some traders simply leaving the cabins as they were unable to make a living.

The Council had supported the market hall and outside traders over many years, mostly through rent concessions, (see below).  The current leases for traders in the cabins on the town square would expire at the end of March 2025 so it was critical that new leases were agreed and signed prior to the start of the new financial year.  The previous concessions were as follows:

• a 50% concession on rents and service charges for two months agreed in 2018
• a permanent reduction in rents of 13.4% agreed in 2019
• a 30% concession on rents for a period of three years agreed in 2020
• a 22.5% concession on rents for twelve months agreed in 2020
• an extension to the 22.5% concession on rents for a further six months agreed in 2021
• a further extension to the concessions on rents until 31^st March 2023 agreed in late 2021
• a further extension to the concessions on rents from April 2023 to December 2023 agreed in early 2023
• a three-month period of free rent and service charges from January 2024 to support traders during the decant from the Market Hall into the temporary cabins on the town square agreed in late 2023.
• a further 10% rent concession on the already discounted market rents and standardisation of the service charge for the period up to 31^st March 2025 agreed in late 2023.

The current rents and service charges for market traders in the temporary cabins on the town square were as follows:

• £9.31 per sqft per calendar month for cabin rent/licence fee.
• £9.00 per sqft per calendar month for cabin service charges.
• £25 per calendar month for trader storage unit located under the rear pavilion at the Market Hall (no utilities supplied to these storage units).
• £120.00 per calendar month as a combined rent and service charge for the trader who had a dedicated cold room & prep room.

Based on current trader numbers in the temporary cabins on the town square and on the current concession levels, this provided an annual income to the Council of circa £35,150 from cabin rents, £31,725 from service charges and £3,350 from storage unit rents.

It was proposed that the Council reduced the current level of cabin rent/licence fee by 100% (a zero-rent charge for the cabins), with all other charges remaining as per the current concession levels.  If approved by Cabinet, this would result in the following charges applicable for all new lease agreements from 1^st April 2025:

• £0.00 (zero charge) per calendar month for market cabin rent/licence fee
• £9.00 per sqft per calendar month for service charges.
• £25 per calendar month for trader storage units located under the rear pavilion at the Market Hall (no services provided to these storage units).
• £120.00 per calendar month as a combined rent and service charge for the trader who had a dedicated cold room & prep room.

Implementing this change would result in loss of income to the Council of circa £35k and assumed that traders would continue to pay the service charge and where applicable, storage unit rent, cold/prep room rent.

If approved, the further concession would be given on the same terms as the 2024/25 concession in that traders would be required to continue to pay all service charges and, where applicable, storage unit rents and any other payments via direct debit and adhere to the Council’s Market Regulations.

The Council had assisted the OASST with relocating to a new location within the Arndale Centre as traders decanted from the Market Hall.  It had proved greater value for money for the Council to support the Trust with its monthly rent payments for the unit in the Arndale Centre rather than a temporary market cabin on the town square.  The Council had agreed to reimburse the Trust just their monthly rent of £275.41 (£3,301.68 for the financial year 2024/25).  This agreement was coming to an end and the Council had been asked if it could continue to support the Trust with their rent again in the financial year 2025/26 whilst the Trust considered a permanent location.  If approved this financial support would be in line with the other market traders in the temporary cabins on the town square.  The Trust had confirmed its lease with the Arndale was on a ‘rolling’ 3-month agreement.

State Aid/Subsidy Control

The proposed new leases were considered to be at less than market value, and as such, the proposed concession represented a subsidy to the traders concerned.  Similarly, the Council would be providing a subsidy to OASST by meeting its rental costs.  The Subsidy Control Act 2022 would apply, although the individual subsidies were likely to be exempt subsidies on the basis that they represented minimal financial assistance (“MFA”) for the purpose of the Subsidy Control Act 2022.  MFA subsidy could be given without the need to assess whether the subsidy complied with the subsidy control principles provided the amount of subsidy in the current financial year and the two preceding financial years did not exceed £315k.  In this regard, the Council would be required to serve a pre-award notice on each of the traders before the leases/licences were completed to confirm the amount of the subsidy and seeking confirmation from the traders that the MFA threshold would not be exceeded. The leases/licences / rental subsidy could only be granted once the traders / OASST had responded and the Council would be required to serve a post award confirmation notice after completion to confirm the amount of subsidy provided by the Council, the date it had been given and that it was minimal financial assistance for the purpose of the Subsidy Control Act 2022.

Alternative Options considered and Reasons for Rejection

The Council could let the current rent/licence fee concessions expire and traders find alternative locations to trade.  However, this was not recommended because the indoor market hall was not anticipated to reopen until Q3 2025/26 or might slip into Q4, and whilst there was no guarantee all traders would wish to return / be accepted by the new market hall operator, the temporary cabins were not planned to be removed until Q3 or Q4.

The Council could look to retain the current level of concessions, rather than reduce the level.  This was not recommended given the tough trading conditions whilst the town square development was ongoing, particularly as members wished to maintain a town centre market offering to residents and maintain footfall into the town centre.

Resolved                                 (1)   That Cabinet approves a 100% reduction to the current rent and licence fees applied to market traders in the temporary market cabins on the town square for a period of 12 months from 1^st April 2025 or until the temporary market cabins are removed from the town square for the Market Hall reopening, whichever comes first, as detailed in Paragraphs 3.4 to 3.5 of the report.

(2)   That Cabinet notes there are no concessions for the current storage unit rents or service charges for the temporary market cabins and these will still be payable at the current rates as detailed in Paragraph 3.3 of the report.

(3)   That Cabinet notes the proposed rent concession will reduce income levels for the market budget next financial year by circa £35k and it is unlikely any efficiency or other cost savings within the market service budget will offset this.

(4)   That Cabinet delegates authority to the Executive Director (Environment) in consultation with the Legal Services Manager and following consultation with the Portfolio Holder to finalise and agree terms of new leases and licence agreements for the market cabins and storage units in relation to the market traders on the town square.

(5)   That Cabinet approves the continuation provision of financial support to the Official Accrington Stanley Supporters Trust, (OASST) in respect of their temporary unit within the Arndale Centre for a period of 12 months from 1^st April 2025 or until the Market Hall reopening, whichever comes first, as detailed in Paragraph 3.6 of the report.

(6)   That Cabinet delegates authority to the Executive Director (Environment) in consultation with the Legal Services Manager and following consultation with the Portfolio Holder to finalise the terms of the financial support for OASST in respect of their rent payments.