South Lakeland District Council

Cabinet

11th December 2013

LANGSTONE HOUSE, WINDERMERE - DECLARE

SURPLUS TO REQUIREMENTS WITH AN OPTION

FOR AFFORDABLE HOMES OR OPEN MARKET

DISPOSAL

PORTFOLIO: Councillor Graham Vincent - Health and Wellbeing Portfolio Holder

REPORT FROM: Michael Keane – Assistant Director Strategic Planning

REPORT AUTHOR: Caroline Leigh - Economic Development and Asset Manager

WARDS: Windermere Town Ward

KEY DECISION NO: not applicable

1.0 EXPECTED OUTCOME

1.1 This report is presented to Cabinet to seek approval in principle that Langstone House, Windermere is declared surplus to requirements to enable the available space to be converted into affordable homes.

2.0 RECOMMENDATION

2.1 It is recommended that Cabinet:-

(1) Approve that Langstone House, Windermere be declared as surplus to requirements;

(2) The Assistant Director (Strategic Planning) be delegated authority to explore the options of converting the available space into affordable homes; and

(3) In the event that disposal of the property (or part thereof) for affordable housing is not feasible authority is sought to seek a disposal of the property (or part thereof) on the open market.

3.0 BACKGROUND AND PROPOSALS

3.1 South Lakeland District Council owns Langstone House, Windermere. The building has had multi-occupational uses. An office is currently used by parking services and there is a limited contact centre presence in the ground

floor. There are also some IT severs at Langstone House which provide a service for Ferry Nab and Ecclerigg Depot.

3.2 Windermere Town Council has a user right (with a small, associated lease) to hold its meetings in the Council Chamber in Langstone House and to use the adjoining office for its Clerk. Windermere Town Council pays the equivalent of a rent for the benefit it receives but this does not represent investment value. Windermere Town Council is protected in this use arising from the Local Authorities (England) (Property Etc.) Order 1973 (No 1861).

3.3 Appendix 1 provides a plan of the location and uses at the building (lower ground floor not shown). The remainder of the building is vacant and the Council has no use for this space.

3.4 The building is situated in a predominantly residential area adjacent to existing housing association homes.

3.5 It is proposed that the SLDC’s use of Langstone House, Windermere be declared surplus to requirements.

3.6 The parking services and contact centre use will find alternative locations and this is already being explored, such as the library in Windermere and the office at Westmorland Shopping Centre car park. The IT servers will also need to be removed.

3.7 It is proposed that, through delegated authority, the option for converting Langstone House into affordable homes is further investigated and that the building transfers to a housing association. Windermere Town Council’s user right will still continue to exist under any new owner.

4.0 CONSULTATION

4.1 Early discussions indicate that Windermere Town Council wishes to continue with the User Right of the Council Chamber and Clerks office as this is fundamental to its operation.

4.2 Discussions have also been undertaken with the Housing Strategy and Delivery Manager who states there is a significant need for affordable housing in this area.

4.3 Positive discussions have also been undertaken with one of the Council’s housing association partners to establish if it is feasible to provide affordable homes in this building. Preliminary investigations indicate that one home and two flats can be created which would not infringe on the rooms used by Windermere Town Council, however more could be created if the whole building could be used.

5.0 ALTERNATIVE OPTIONS

5.1 To continue to run the building and try and operate it as commercial office suites. In order to do this successfully there would need to be capital expenditure. This would still leave the Council with a long term liability and increasing maintenance costs for the building. It is not considered that such expenditure would represent a good investment for the Council’s funds or achieve the Council Corporate Plan objectives.

5.2 If the affordable housing option becomes unfeasible then the alternative option would be to sell the building on the open market for a capital receipt. Again Windermere Town Council’s user right would still exist but there would be a reduction in the capital value achieved reflecting this if they were still in presence.

6.0 LINKS TO COUNCIL PRIORITIES

6.1 Housing – providing homes to meet need

7.0 IMPLICATIONS

7.1 Financial and Resources

7.1.1 There will be small loss of revenue from the User right/lease to Windermere Town Council of £313.

7.1.2 The revenue expenditure on Langstone House has been £50,242 in 2010/11, £73,320 in 2011/12 and for 2012/13 is £73,320. However this does include a large element of recharges due to the building being multi occupied as this can be time intensive. It is likely that there will be c.£15,000pa direct expenditure savings and these have been included in the 2014/15 Draft Budget Report (from 2015/16).

7.1.3 It is currently unclear whether there will be any capital receipt if the building is partly converted to affordable homes; however a viability assessment will be undertaken with the housing association.

7.1.4 There will be a cost for relocating the existing SLDC uses and IT services from the building. These costs are to be confirmed and will be reported to Senior Management Team. These costs will be met from the first year of savings.

7.2 Human Resources

7.2.1 There will be HR implications to this proposal should the decision proceed and these are highlighted in the body of the report.

7.3 Legal

7.3.1 Paragraph 23(2) of the Local Authorities (England) (Property etc.) Order 1973 introduced the concept of user rights related to arrangements made for after local government re organisation which took effect from 1 April 1974. This provides that:

(a) Where any property is immediately before 1st April 1974 used otherwise than temporarily for the purposes of functions exercisable by one authority in relation to any area and the functions become exercisable on and after that day by two or more authorities; and

(b) the property is by virtue of this order transferred to and vested in one of the authorities

(c) the other of the authorities shall be entitled to the use of such property for the purposes of such functions or for the purposes of any other functions exercisable by them.

7.3.2 Paragraph 23(8) of the Local Authorities (England) (Property etc.) Order 1973 states that

“An authority shall not sell, exchange, lease or otherwise dispose of property in respect of which user rights are ensured CC or develop the land on which such property is situated, unless they have consulted all authorities entitled to such user rights and made such arrangements as may be determined by agreement between the authorities concerned or failing such agreement by the decision of a person agreed on by such authorities or in default of agreement appointed by the Secretary of State.

7.3.3 Therefore if the user right part of Langstone House is to be disposed of this will need to be preceded by a consultation process with Windermere Town Council with mutually agreeable arrangements, failing which step the arrangements will need to be determined by an independent person.

7.3.4 Terms and conditions of any disposal will be subject to a Delegated Executive Decision and legal agreements drawn up between the parties.

7.3.5 Sale will either have to achieve ‘best consideration’ under S123 of the Local Government Act 1972 or be justified under the well-being exceptions permitted by the General Disposal Consent (England) 2003 or the affordable housing exceptions of S24-26 of the Local Government Act 1988 depending upon the individual circumstances of any disposal.

7.4 Social, Economic and Environmental

7.4.1 This will be completed as part of any planning application for change of use.

7.5 Equality and Diversity

7.5.1 As per 7.4.1

7.6 Risk

Risk Consequence Controls required

Criticism for not selling the building on the open market

Legal challenge that the Council is not attempting to maximise its disposal receipts

Explanation of the legal basis for converting the building into affordable homes

Continuing to own an asset which is surplus to requirements

The asset is not delivering best value to the Council

Dispose of use in accordance with the Council priority.

CONTACT OFFICERS

Caroline Leigh – Economic Development and Asset Manager – c.leigh@southlakeland.gov.uk

APPENDICES ATTACHED TO THIS REPORT

Appendix No.

1 Plan of the subject property

BACKGROUND DOCUMENTS AVAILABLE

None

TRACKING INFORMATION

Assistant Director

Portfolio Holder

Solicitor to the Council

SMT Scrutiny Committee

22/11/2013 22/11/2013 19/11/2013 17/01/2013 n/a

Executive (Cabinet)

Committee Council Section 151 Officer

Monitoring Officer

n/a n/a 22/11/2013 22/11/2013

Human Resource Services Manager

Ward Councillor

19/11/2013 22/11/2013

Appendix 1