Purpose

This report recommends the
disposal of the freehold interest ofRear of
34 Northbrook Road, Croydon, CR0 2QL. 
The objectives for the disposal were to
secure maximum receipts, achieve offers on an unconditional basis
with the lowest possible transactional risk and to target capital
receipts with the preferred bidder as quickly as possible for the
Council to reduce its outstanding debt. 
SHW undertook an open market process.  A
transparent and clear process was provided for parties to undertake
their due diligence to ensure considered offers.  SHW received three offers.
 
Details of the offers received
and the marketing report are included within the confidential Part
B report, as this is exempt information as defined in paragraph 3
of Schedule 12A to the Local Government Act 1972 (as
amended), as it relates to the financial or
business affairs of any particular person (including the authority
holding that information) and the public interest in
withholding disclosure outweighs the public interest in
disclosure.
 

Content

For the reasons set out in the
report and appendix and Part B report and Appendix the Corporate
Director of Resources and Section 151 Officer is
AGREED:
 
2.2       To
approve the disposal of the freehold interest
of Rear of 34 Northbrook Road, Croydon, CR0
2QL at the value stated in the
confidential Part B report.
 

Reasons for the decision

The disposal of Rear of 34
Northbrook Road supports the requirements of the Ministry of
Housing, Communities and Local Government (MHCLG) through the
reduction in capital borrowing and annual revenue costs and the
requirements as set out in the Improvement and Assurance
Panel’s Exit Strategy.  Further
commercial reasons for the disposals are included in the Part B
report. 
 
The recommended offer for
acceptance represents best consideration.  The cost of holding and running assets is second
only to staffing costs and therefore it is important to ensure that
they are used in the most cost-effective manner.  A business case/feasibility assessment for the
disposal is included within the confidential Part B
report.
 

Alternative options considered

No disposal of Rear of 34
Northbrook Road – the business case for disposal is set out
in the Part B report.  As set out above,
the overall aim of the approved Corporate Asset Management Plan and
the Annual Asset Disposals Plan is to reduce costs of retained
corporate assets used for the delivery of services and to maximise
capital receipts.  This disposal is
required to meet those aims and enable the Council to achieve the
required asset disposals to help support the financial requirements
in line with the MTFS.
 
No disposal of Rear of 34
Northbrook Road – the Council’s current financial pressures
and need to deliver savings means that not selling Rear of 34
Northbrook Road at this time would impact on the opportunity to
reduce its debt balance.  Reducing the
Council’s debt balance is a requirement from MHCLG, and the
government appointed Improvement and Assurance Panel as part of the
ongoing discussion on options for securing ongoing financial
sustainability for the Council. 
 
For Rear of 34 Northbrook Road,
the asset could be retained as it is revenue producing. However,
the financial benefit of a disposal at the red book valuation is
significantly better than retaining the current income stream.
Disposal is therefore the recommended option.