Purpose

This report recommends
the disposal of the freehold interest of Cemetery Lodge, Thornton Road, Croydon CR7
6DD.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.  Copping Joyce undertook an open
market process.  A transparent and clear
process was provided for parties to undertake their due diligence
to ensure considered offers.  Copping
Joyce received eight 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 the Corporate Director of Resources and Section 151 Officer
AGREED:
 
To approve the disposal of the freehold interest of Cemetery Lodge, Thornton Road, Croydon CR7
6DD at the value stated
in the confidential Part B report.
 

Reasons for the decision

The disposal of Cemetery Lodge 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 Cemetery Lodge
– 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 Cemetery Lodge
– the
Council’s current financial pressures and need to deliver
savings means that not selling Cemetery Lodge 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 Cemetery Lodge, the asset
could be retained. However, the financial benefit of a disposal at
the red book valuation is significantly better than retaining.
Disposal is therefore the recommended option.