Meeting documents

1 THE ISSUE

1.1 Provisional agreement on licence fees and service charges was reached between the Charter Trustees (CTs) and Council Officers and reported to the Resources Co-ordination Committee (RCC) in March 2002. RCC declined the recommendation and resolved that the licence fee should be paid in full for each of the four years commencing 1^st April 2002 as opposed to being phased in as recommended.

1.2 The CTs were unable to reset their budget for the payment of any amount of licence fee during the first year and again, despite being informed of the decision of the RCC, set their budget for 2003/2004 without making provision for the second year (commencing1st April 2003). However, funds were allocated to meet all Service Charges.

1.3 The Charter Trustees argue that as they have not included these costs in their budget, they cannot pay the licence fee required by the Council. Agreement needs to be reached so the impasse is resolved.

2 RECOMMENDATION

2.1 Option E set out in Appendix 1 should be adopted whereby the Charter Trustees pay a licence fee of £12,900 per annum with effect from 1^st April 2004.

3 FINANCIAL IMPLICATIONS

3.1 As explained in section 4, the decision of Resources Co-Ordination Committee of March 2002 to levy an annual licence fee and service charge from April 2002 has yet to be fully implemented, with only a service charge being received to date. As this matter has been the subject of extended negotiation and discussion no assumption has been made in the Council's Revenue Budget regarding income from the licence fee and so no write-off or budget adjustment is required if the recommended Option E is now approved. However it should be noted that by agreeing not to levy the licence fee in respect of 2002/03 and 2003/04 potential income to the Council of £25,800 will be foregone.

4 THE REPORT

4.1 The terms negotiated in early 2002 with the CTs provided for the phasing-in of the licence fee over an initial four year period and the recovery of building management costs and IT & telephones (Service Charges) in full each year. This would have meant licence fee charges to the Charter Trustees of £nil in 02/03; £4300 in 03/04; £8600 in 04/05 and £12,900 in 05/06.

4.2 This was recommended to RCC in March 2002. The Committee disagreed with the recommendation as to phasing and resolved that the full amount should be paid from 1^st April 2002. (See Table C in Appendix 1).

4.3 NB: The Charter Trustees of the City of Bath came into being via SI 1996 No 263. This specifies that the Council shall provide accommodation for the proper discharge of the CTs functions on terms agreed between the parties or, in default, by an agreed third party who could, ultimately, be appointed by the Secretary of State. The fact that the CTs were not contributing towards the costs of the Mayor's Suite was identified by the Operations Director in 2001, and he introduced the concept of phased introduction of the Licence Fee.

4.4 The CTs have consistently maintained that, as they were unaware of the Committee's decision prior to setting their 02/03 budget, they had no funds to meet the licence fee for that year. However, they also set their budget of 03/04 without any provision being made for the payment of the Licence Fee. The reason for this is not entirely clear but seems to be as the result of discussions that had taken place with a former Executive Member but which were not subject to a formal decision-making process. In any event, the Charter Trustees did not agree the terms of the rent, but have now indicated their willingness to accept the current recommendation of the Executive Member.

4.5 There are various options for dealing with this situation.

4.6 The Options

(1) Pursue collection of the licence fee in accordance with RCC's resolution. The CTs (or the Council) could refer the issue for determination as in para 4.3 above. This would be costly and time-consuming and the outcome uncertain.

(2) The Council could allow time to pay by phasing in the outstanding sums over a longer period, stepping up the licence fee whereby all the "lost" income from the initial two years is recovered. One scenario is shown in Appendix 2.

(3) In view of the budgets set by the CTs, the Council could waive the licence fee for the first two years (02/03 & 03/04) and charge 100% (£12,900) for the remaining years (04/05 &05/06). See Option E in Appendix 1. It is understood that the Charter Trustees have made budgetary provision to pay on this basis.

5 RISK MANAGEMENT.

7 OTHER OPTIONS CONSIDERED

7.1 None.

8 CONSULTATION