Agenda item

Report Attached.

The following item was submitted as urgent business with the Chair’s agreement in accordance with Section 100B(4) of the Local Government Act 1972, the reason being to ensure the latest up to date information was included in the report.

The Cabinet Portfolio Holder for Housing and Regeneration (Councillor Clare Cleary) submitted a report to seek approval to implement a new charging structure for Accrington Market with effect from 1^st October 2018.  The report also provided an overview of current charges, occupancy levels and steps being taken to ensure the long term viability and sustainability of Accrington Markets. 

Approval of the report was not deemed a key decision. 

Reasons for Decision

This is the first major review of Market Hall charges since 2010.  The proposed reduction and freezing of charges reflects difficult high street trading conditions generally, including those affecting the markets sector.

The proposed revised charges reflect a review of the open market rental values at Accrington Markets using comparable rents and rateable values and a review of service costs.  The charging review has also been mindful to keep a fair balance between the financial pressures faced by some of our traders and the long term sustainability of Accrington Markets.

The Cabinet Working Group with the support of officers, will be ensuring the good financial stewardship of the Markets’ budget with a priority to increase occupancy of the outside markets and to eradicate longer term subsidised occupancies of the indoor Market Hall unless there are exceptional circumstances that add value to the overall offer at Accrington Markets especially for other traders by increasing footfall significantly.

A Valuation Report was commissioned to establish the open market rental values of the accommodation for the inside and outside markets.  The valuation report considered town centre comparable rents, other market charging comparisons across Lancashire and wider North West and the Valuation Office Agency’s rateable values for the Market Hall which is considered a fairly good barometer of rental values.

Despite the freeze the Cabinet Working Group were well aware of a decrease in retail rental values in and around Accrington town centre and trading difficulties experienced by some market traders.

In addition to reviewing Market charges, the Cabinet Working Group has started to look at wider issues that are having a negative impact on the Markets’ budget including occupancy levels, incentive rates and a vision and business plan for the future with a view to sustaining Accrington Markets for the long term future. 

Like the rent charges, the Markets Service Charge has not been reviewed since 2010.  This has now been reviewed to reflect actual costs, with a small increase in costs, and therefore there is a need to increase the service charge element of charges.

Alternative Options Considered and Reasons for Rejection

The proposed charges are based on an assessment of open market rents by a qualified and experienced Chartered Surveyor registered with The Royal Institute of Chartered Surveyors.  Other options were considered by the Cabinet Working Group but have been rejected due to the need to achieve a fair balance between open market values and financial pressures faced by some traders.

Resolved                           (1)   That the proposed charges for Accrington Market, as set out in the report, be approved with effect from 1^st October 2018 (10.5% reduction) and 1^st October 2019 (a further 2.9% reduction);

                                (2)   That it be noted that the proposed charges apply to all tenancies and occupancies except those that were subject to agreed incentive rates and discounts within the indoor Market Hall or Kiosks;

                                (3)   That it be noted of the intention to phase out all current indoor Market Hall incentive arrangements by no later than the 30^th June 2019; 

                                            (4)   That all indoor Market Hall and Kiosk tenants benefit each year from a one month, 50% rent discount (but not service charge) subject to the account not going into arrears for a 12 month term ending the 31^st March of each financial year and the rent and service charge being continually paid by direct debit be approved;

                                (5)   That it be noted that the maximum incentive term for the indoor market will be 6 months and will not exceed 50% of the combined rent and service charge rate except in exceptional circumstances where the incoming tenant will provide significant added value to all stall holders.  Any extended incentive rates under exceptional circumstances will have to be approved by the Chief Officer responsible for the Markets in consultation with the Portfolio Holder and Leader of the Council; and

                                (6)   That authority be delegated to the Head of Regeneration and Housing to determine the occupancy charges for the two outside catering units and seating areas in consultation with the Leader of the Council and the Portfolio Holder responsible for Accrington Markets;

                                (7)   That the work of the Accrington Markets Cabinet Working Group be noted and acknowledged in reviewing the financial position and charging regime of Accrington Markets and authority be given for the Working Group to continue to closely monitor Accrington Markets’ budget and to examine ways in which financial performance could improve to ensure the long term sustainability of the indoor and outdoor markets.