Decision Maker:

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: No

Date of Decision: September 30, 2024

Purpose:

Content: RESOLVED:   1.  That the scheme for Children and Education Directorate as set out in section 12 was approved as follows:   Childcare Expansion: Resource and spend approval of £665,761k (£400k in 2024/25 and £266k in 2025/26) is requested to support the provision of new places to assist the expansion of 30-hours entitlement places for children aged 9-months to 3-year-olds and wraparound provision for primary school aged children.   Children’s Home: Resource and spend approval of £1,000k (£160k in 2024/25 and £840k in 225/26 is requested to redevelop and repurpose two council assets into bespoke children’s homes. Refurbishment of 38 Firsby Road and 15 Triangle Road (formerly the Ann Taylor Children's Centre) to create two children’s homes.   2.  Approved the granting of a new 15 year lease to Sainsbury's, 245 Old Street, London EC1V 9EY, shown for identification purposes edged red on the plan at Appendix 2, incorporating the proposed Heads of Terms (subject to any reasonable amendments during the legal process) to allow continuity of occupation following the expiry of the lease.   3.  Delegated authority to the Interim Group Director of Finance and the Director of Strategic Property Services authority to agree to the lease, all commercial terms and any associated documentation and ensure that it represents best consideration.   4.  Authorised the Acting Director of Legal, Democratic and Electoral Services to settle, agree and enter into all primary and, where necessary, ancillary documentation necessary for these transactions.   5.  That the Quarter 1 Capital Monitoring for the year ending 31 July 2024 in section 12 was noted.   6.  That the expenditure plans and associated resources to be carried from 2023/24 to 2024/25 as set out in Appendix 1 and summarised below was approved:   Current Directorate Carry Forward Budget to 24/25   £'000 Non Housing 10,885 Housing 21,543 Total 32,429   7.  That the re-profiling of the budgets as set out in Appendix 1 and summarised below was approved:   Current Directorate Re-Profiling 24/25 Re-Profiling 25/26 Re-Profiling 26/27 Re-Profiling 27/28 Re-Profiling 28/29   £'000 £'000 £'000 £'000 £'000 Non Housing (50,592) 43,980 4,790 1,752 70 Housing (32,087) 32,578 (491) 0 0 Total (82,679) 76,558 4,299 1,752 70   8.  That the capital adjustments of the budgets as set out in Appendix 1 and summarised below were noted:   Current Directorate Capital Adjustments   £'000 Non Housing (604) Housing (119) Total (722)   REASONS FOR DECISION   The decisions required are necessary in order that the schemes within the Council’s approved Capital programme can be delivered and necessary to approve the property proposals as set out in this report.   In most cases, resources have already been allocated to the capital schemes as part of the budget setting exercise but spending approval is required in order for the scheme to proceed. Where, however, resources have not previously been allocated, resource approval is requested in this report.   To facilitate financial management and control of the Council's finances.   Proposed Granting of New Lease of 245 Old Street, London EC1V 9EY: Renewing the lease with Sainsbury's at these terms ensures a stable long term income stream and avoids a potentially costly void if the tenant were to vacate. The proposed terms also meet Best Consideration and show a substantial increase in rent to the HRA.   DETAILS OF ALTERNATIVE OPTIONS CONSIDERED AND REJECTED   Proposed Granting of New Lease of 245 Old Street, London EC1V 9EY: The Council could reject the proposal and try to obtain a higher rent from Sainsbury’s. It could also refuse to renew the lease outright and put the property on the market.   These options have been rejected on the basis of advice provided by the Council’s specialist agent, which supports the view that the proposed terms are acceptable to the Council and in line with market expectations. If the Council did not proceed with the proposed terms, there is a risk that the tenant would withdraw from negotiations and vacate the premises, resulting in void costs and uncertainty over future tenant covenant and rent level.   There are limited options for affordable groceries in this area, with the only other comparable supermarkets an 8-10 minute walk from this location. Given the high density of residential housing north of Old Street, the loss of Sainsbury's may have a detrimental effect on many local residents' access to fresh food. The supermarket also provides amenities for the area's workers and visitors.