Archived decisions

Hampshire County Council

Executive Member (Education) Item 11

24 March 2005

Long-term use of School Sites for Third Party Sports Provision

Report by the Director of Property, Business and Regulatory Services

How the conclusion in this report fits in with the Corporate Strategy

This scheme will impact on the delivery of the following Corporate Aims:

Aim 1 - Maximising life opportunities by the provision of additional sports facilities for school and community use.

Aim 4 - Building strong and safe communities by the provision of additional sports facilities for community use.

Aim 5 - Improving services by the provision of additional sports facilities for school and community use.

1

Introduction

1.1

The County Council has recently received applications from a number of third parties who wish to establish private sports facilities at school sites on a long-term basis. This report identifies the main implications for the County Council, and recommends a policy for considering all such requests.

2

Background

2.1

The County Council has traditionally supported the principle of use of school sites for sports and community purposes, mainly through district council involvement and capital investment by Sport England using national lottery funding. Responsibility for management of the facility for both school and community use has remained with school governing bodies. In the past few months, a number of private sports clubs and commercial leisure companies have proposed new facilities which will require the grant of a minimum of 25-year lease to secure capital funding. There will almost certainly be advantages to the host schools, in the form of new sports and community facilities and/or sports coaching provision, but the inflexibility inherent in long leases results in restrictions on future property decisions at the School. Normally the sports club or company also require a clubhouse with a bar, and the introduction of licensed premises onto school site raises certain issues.

2.2

School governing bodies are now able to enter into 'agreements' with third parties for the provision of community facilities or services on their sites, but such agreements alone are often insufficient to satisfy capital borrowing or grant aid requirements (for example from Sports England), and a legal interest in the form of a long lease is usually required. Only the Council can grant such a lease. This can cause confusion, especially if a school undertakes detailed negotiations with the third party before consulting the Council. Schools are formally required to consult with the Council and to have regard to any advice before entering into such agreements. However, governors' enthusiasm sometimes results in this being overlooked or at least postponed. The consent of the Department for Education and Skills may also be required before the land may be leased.

2.3

The Council also needs to be mindful of its VAT liabilities, which inhibit its own substantial capital investment in non statutory services (such as community sports facilities) in case the threshold at which substantial VAT tax liabilities become payable is breached. Investment by third party providers will not impact on this limit, so long as revenue income from use of the facilities accrues to the third party rather than the school or the Council.

3

The Key Issues

3.1

Long-term assets arrangement implications -

The Council will keep under review the use of school sites and buildings as rolls fall over the next decade. Reorganisations may lead to the sale of surplus sites for valuable capital receipts, which are usually reinvested in schools as part of the reorganisation. However, if a substantial part of the site is subject to a long lease, the capital receipt is likely to be reduced. That said, legislation controlling the disposal of school playing fields (the S.77 consent procedure) taken together with Local Plan policies, already constrains the Council's ability to achieve planning consent for valuable alternative development on sports fields, whether or not they are in third party use.

3.2

Level of rent -

Some sports proposals are patently commercial businesses for which the Council should charge an appropriate commercial rent (after making an allowance to reflect the value to the school of the new facilities). In other cases the third party may be a private members' sports club that only intends to create sufficient profit to operate the club facilities. In some cases it may be difficult to decide where relatively nominal 'community' charges should apply, and where a commercial rent is more appropriate. The Council may wish to support 'intermediate rental levels' (ie something between commercial and nominal) for most 'club' activities, especially if there is a bar on the premises which could produce reasonable income (the Council will presumably wish to avoid subsidising the price of food or drinks consumed on the premises). This rental would need to be assessed at the outset, and future rent increases linked to an index such as Retail Price Index.

3.3

Acceptability of the proposed use to the neighbourhood -

The introduction of new sports facilities may have significant implications for the neighbourhood (usually a residential area), including increased traffic and car parking; floodlighting and noise from outdoor sports facilities; evening use of the clubhouse etc, although complaints arising from community use of established facilities tend to be fairly infrequent. The public have the opportunity to comment on or object to any proposal as part of the planning application process, but the School and the County Council may still be 'blamed' if problems arise. A careful assessment of site suitability, plus appropriate consultation with neighbouring property owners, will be essential to ensure that the scheme is designed so as to minimise any detrimental effect.

3.4

Provision of bar facilities on school sites -

Commercial sports businesses and private sports clubs rely on income from a bar and associated social events, and probably could not survive without it. The same is true at a number of community schools which generate income from bars to subsidise community programmes. Leaving aside the issue of income generation, some may consider it debatable whether licensed bars are appropriate on school sites, even when sports related. The management of licensed bars on school sites certainly needs to be rigorously controlled through lease terms to ensure the bar opening times are outside of school hours, and that bar extensions are very much the exception. Recent changes to licensing regulations intended to be less bureaucratic and to introduce more flexibility make this even more important.

4

Conclusions

4.1

Long leases may disadvantage the Council in asset management terms, because the resulting inflexibility will constrain future property decisions. However, there are can be immediate operational advantages to the school through the use of enhanced sports facilities and increased community use, with no effect on the Council's VAT Exempt limit, as these would not be financial investments by the Council.

4.2

It is therefore suggested that the principle of sports use of school sites should normally be supported, subject to the School obtaining sufficient benefit, to a financial impact assessment on any community facilities supported by the Council at neighbouring schools, and to the retained site continuing to meet DfES minimum standards. However, such use should not be encouraged at schools where there are potential reorganisations under the School Organisation Plan, or where the proposal may conflict with education policy requirements.

4.3

Commercial businesses should be charged commercial rent levels, whilst community facilities with limited potential for raising revenue or where the Council is satisfied that surplus income will be re-invested in services and facilities for the school and community should be settled at 'community' levels. Those private clubs or commercial organisations that have an ability to produce revenue through licensed bar facilities should pay a rental to reflect this.

4.4

The Council will be concerned to avoid arrangements which would put it into conflict with a large number of local residents. The proposer and the School should be encouraged to consult with residents during the design of the scheme, and should obtain planning consent before any lease is granted by the Council. Control of subsequent usage should be exercised through the lease terms (eg hours of use).

4.5

It is unlikely that sports providers can progress their schemes without income from a licensed bar, although this should never be open during normal school hours. The School should be encouraged to consult parents about a proposed bar on the school site before proceeding with the project. Detailed control of opening hours can be exercised through the lease terms.

Recommendations

The Executive Member (Education) advises the Executive Member (Policy and Resources) that the following principles for dealing with applications from third parties for long-term sports use of school sites be agreed:

1

The provision of facilities for private sports use on school sites should be supported, provided that:

a)

the proposals have the full backing of the school's governing body

b)

the proposals do not conflict with education policy and/or asset management requirements

2

Rent payable should normally reflect any licensed bar use and the potential to create commercial revenue streams;

3

Only once consultations with nearby residents have been completed and planning consent has been granted should leases be offered;

4

Schools should be encouraged to consult parents before supporting licensed bars on site, and that opening times should then be controlled through strict lease terms.