Briefing Note

Subject:Review of Allotment rents by the Site Secretaries Working Group

Submitted to:Site Secretaries

Date:9th August 2012

Prepared by:SiteSecretariesWorking Group

Introduction

  1. The Council’s Corporate Plan states it will;
  • Work with allotment associations to ensure that plots are fully cultivated and that management responsibilities are handed over to the associations wherever feasible.

How will we do this?

  • Publish a set of Allotment Rules with a new Tenancy Agreement.
  • Review the current rent structure with a view to increasing rents.
  • Assess options for devolved responsibility.
  1. At their February Site Secretaries’meeting they agreed to establish a working group to discuss a potential rent review and report back to the Site Secretaries meeting in August 2012.

How is the Council’s Allotment Budget made up?

  1. The Council’s allotment budget is made up of
  2. £6,040 for minor repairs; in effect the annual budget to spend on allotments
  3. £6,940 for grounds maintenance works, ie grass cutting and hedging
  4. £2,440 for water charges
  5. £3,350 for supplies

This represents a total operating expenditure of £18,770. In addition, the administration of allotments occupies a significant portion of the time of two members of staff plus an element of management overheads.

  1. The estimated income from rents at the current level is £12,270. This figure excludes water charges. Southern Water charges the Council annual depending on water used. This then informs the annual water charge for plot holders.

What are we trying to achieve by a rent review?

  1. All HBC budgets have been carefully reviewed and reduced where possible over the past few years. Setting budgets for the financial year April 2013 to March 2014 is expected to be particularly difficult, with a continuing freeze on council tax and the loss of several significant sources of income and government grant funding. The allotment budget will be expected to share in the cuts; the only alternative is an increase in income.
  2. Desirable outcomes of a rent review are;
  • Reduce the operating cost to the Council;
  • Find ways to share with sites any additional monies gained from rents to increase the overall maintenance budget for allotments
  • Establish a way of profiling the allotment budget that allows sites to work together to plan for works to their sites and agree priority spends over time with a degree of certainty and assurance.

The public benefits of allotments

  1. In addition to providing tenants with food, allotments provide many wider public benefits. The fresh fruit and vegetables that allotments supply, and the exercise and social interaction that they enable, contribute to the physical and mental well-being of tenants, their families and their friends. The composting of food waste and the use of second hand materials by potholders reduces the rubbish that has to be disposed of to expensive landfill while local food production means lower carbon dioxide emissions.
  2. Allotments provide significant habitats for wildlife, including pollinators such as bees and bumblebees and protected species such as lizards and slowworms. And together with other open spaces allotments enhance local air quality and add to the attractiveness and diversity of the urban landscape.

Rental calculations

  1. All calculations of potential rents is based upon a total of 3588.1 rods in the borough. The current rent is £2.45 per rod exclusive of water.
  2. Table 1 shows the current income from rents and operating expenditure in the HBC Budget Book for 2012/13.
  3. Table 2 shows the Working Group’s proposalto allocate a staged 10% or 15% or 20% annual increase until the budget starts to show a sum able to reinvest in the allotment budget.
  4. Table 2 is exclusive of the annual RPI % increase as we do not know what it will be in any given year or the annual water charge. Both of these would be in addition to the possible rents shown.
  5. Table 3 shows a range of regional authority rents. The table does not compare like with like as the services provided range from one authority to another such as some Councils charge separately for water and some do not.

Discussion on the proposals from the Site Secretaries

  1. The proposal seeks toraise rents by a set amount annually from a starting rent of £4 in 2013. This, it is argued, will allow tenants to understand in advance their rental charges for a year or two in advance.
  2. The Working Group are proposing that once the Council’s net operating cost reaches zero, the rents are reviewed again with Site Secretaries.
  3. Table 2 shows the increase in rents that would result over a 4 year period starting in April 2013 with a 10%, 15% and 20% increase.
  4. For a 10% annual increase the net operating cost would reach zero, triggering a rent review in 2015/16.
  5. For 15% annual increase, the net operating cost would reach zero, triggering a rent review in 2014/15.
  6. For 20% annual increase, the net operating cost would reach zero, triggering a rent review in 2014/15.
  7. It is noted that any monies shown in brackets would be re-invested for allotment management/maintenance.
  8. Site Secretaries have emphasised that raising rents too much could result in less people taking up plots and current plot holders vacating their plots. The Council could potentially be left with empty and vacant plots that do not generate income, resulting in less income for the Council.
  9. Site Secretaries are concerned that allotments remain affordable for those on lower incomes. If rents become too high then some current tenants could be forced to give up their plots while some people who would like to have an allotment would be prevented from doing so.
  10. People on low incomes may also have trouble paying rent annually so it is recommended that options for staging payments such as the opportunity to pay quarterly be made available to tenants who need this facility.

Sharing benefits

  1. Table 2 shows that once the Council’s net operating cost becomes zero, additional funds are generated. It is proposed that those additional funds are reinvested into the management and maintenance of allotments. The amount of any additional funds available for allotments will be dependant on the amount of rent being charged.
  2. Mechanisms for giving Site Secretaries a greater share of how monies are prioritised across allotments should be explored through further Site Secretaries/Working Groups meetings.

Conclusions

  1. The Site Secretaries Working Group has presented options for a staged rent review. The views of Site Secretaries are sought.
  2. The views and recommendations of the Site Secretaries will be considered by and help inform future Council decisions on a rent review.

Recommendations

  1. Site Secretaries agreed the £4 base option with a 10% increase to be reviewed in 2015/16 as outlined in Table 2 be taken forward to inform Hastings Council’s internal budget discussions
  2. Options for staging payments such as the opportunity to pay quarterly are investigated for tenants who need this facility.

Table 1Current Hastings Council Budget Structure

Budget book heading / Made up of / Amount
Operating Expenditure / Minor repairs £6040
Quadron £6940
Water £2440 / £15,420
Supplies and Services / Database licence/legal work/pest control/locks etc / £3,350
Total Operating cost to Council / £18,770
Income from rent / (£12,270)
Net operating cost / £6,500
Support Services / Officer time, recharges from central departments, general overheads / £60,320
Net Service Cost / £66,820

Table 2Proposed rent structure from Site secretaries of £4 and £5 base rates with maximum10% increase annually for 5 years

Cost per Rod with 10% increase until reinvestment is generated / Typical 5 rod plot / Income for total 3588.1 rods / Surplus/deficit from proposed figures
£4 (2013) / £20 / £14,352.4 / £4,417.60
£4.40 (2014) / £22 / £15,787.64 / £2,982.36
£4.84 (2015) / £24.20 / £17,366.4 / £1,403.60
£5.32 (2016) / £26.60 / £19,088.69 / (£318.69)
Cost per Rod with 15% increase over 5 years
£4 (2013) / £20 / £14,352.4 / £4,417.60
£4.60 (2014) / £23 / £16,505 / £2,265
£5.29 (2015) / £26.45 / £18,981 / (£211)
£6.09 (2016) / £30,45 / £21,852 / (£3,082)
Cost per Rod with 20% increase over 5 years
£4 (2013) / £20 / £14,352.4 / £4,417.60
£4.80 (2014) / £24 / £17, 223 / £1,547
£5.76 (2015) / £28.80 / £20, 667 / (£1,897)
£6.91 (2016) / £34.56 / £24, 794 / (£6,024)

Briefing notePage 1 of 7

\\FS-AQUILA\Data\ResAmen\ResPark\MURRAY\CURRENT FOLDER\Allotments\Charges\SS Final Rents paper after meeting Aug 2012.doc

Table 3Regional Allotment Rents

Local Authority / Rent per rod - 2012/13 / Water per rod
Eastbourne / £5.75 / £3.00
Shepway/Folkestown Town Council / £8.50 incl. of water
Brighton and Hove / £7.08 incl. of water
RotherDC / £4.94 per rod for plot less than 5 rods
£4.86 per rod for plot greater than 5 rods Incl. of water
Tunbridge Wells / £3.95 incl. of water
Lewes / £5.00 incl. of water
Hastings / £2.45 (currently) / 0.86p
Ashford / £4.20 incl. of water
Hailsham Town Council / £6.00 per rod for 5 rod plot
£5.66 per rod for 3 rod plot / No charge for water as no mains
Vale Road, St Leonards (private site) / £0.50p / £0.50p
Marina Allotment Association St Leonards (self managed) / £4.40 incl. of water
Worthing / £8.00 per rod incl. of water
Horsham / £5.80 incl. of water
Tonbridge (Run by Association) / £2.50 / £1.00
Thanet / £4.00 / Water is calculated as it is used and divided overall for each site
Dover / £5.97 per rod for plot less than 4.94 rods
£4.87 per rod for plot less than 9.84 rods
£4.91 per rod for plot less than 13.44 rods / £12 per plot
Sandwich / £20 per plot per year / £20 per plot per year
Deal / £10.11 per rod / Water is calculated as it is used and divided over each site
Maidstone (run by Maidstone Allotment Management Committee) / £2.70 / £1.00
Canterbury / £5.26 per rod incl. of water

Briefing notePage 1 of 7

\\FS-AQUILA\Data\ResAmen\ResPark\MURRAY\CURRENT FOLDER\Allotments\Charges\SS Final Rents paper after meeting Aug 2012.doc