HSA Statement – March 2014

Statement from the Management Committee of HSA concerning the Ken Williams Memorial Pavilion.

Important information regarding the Parish Council’s pressure on HSA to agree a commercial rent

Background

Seven out of twelve Parish Councillors resigned en bloc in the early part of 2013 including the Chairman. A majority of the remaining Councillors voted Councillor Mapletoft as new Chairman and it is understood that new Councillors were co-opted by a majority of the remaining Councillors (i.e. they are not elected  representatives of Hazlemere’s residents).  There is evidence that these Councillors now control the Parish Council and are representing only a small minority of Hazlemere’s residents. The overwhelming support for HSA continuing to manage the new pavilion for the benefit of the sports clubs who use Hazlemere Recreation Ground demonstrated by our e-petition is far more representative of the views of Hazlemere’s residents. As will be seen below there is no financial benefit to Hazlemere’s Council-tax payers in the Parish Council insisting on a commercial rent.

Below are quotes from two documents on the Parish Council’s website with our comments :-

From the Chairman’s Introduction :-

“I stood for the Parish Council on a policy of openness and transparency and during my term over the coming year this will be our basic principle of operation”.

 Our Comment. HSA has rights as Tenant over the whole building. During Councillor Mapletoft ‘s time as Chairman of the Parish Council negotiations were going on behind HSA’s back to sublease a part of the Pavilion to a third party. When HSA found out it had to incur Solicitors’ costs to stop the Parish Council who had no legal right to sublet a part of the pavilion. All discussions within the Parish Council to do with the pavilion, both before and since then, have been in closed session on the pretext that the matters discussed were too sensitive to be in the public domain. Since service of a section 25 notice to terminate HSA’s tenancy Councillor Mapletoft also issued an edict in December 2013 that the matter was sub judice as his latest pretext for secrecy. We had to point out to the council  that it was not sub judice as no court proceedings had been issued. So much for openness and transparency.

“Proper control of the pavilion by the Parish Council needs to be established”.

Our Comment. We ask why. HSA’s Management Team has run the pavilion since the building was completed nearly four years ago on behalf of the many sports clubs which use Hazlemere Recreation Ground and the many visitors to the pavilion. HSA ran the old pavilion for many years before then. These new (mainly unelected) Councillors have shown nothing but hostility to HSA and its Management Team, whereas their predecessors did so much in close partnership and harmony with HSA to bring about the construction of this new pavilion. These new Councillors have no idea what is involved in the practical running of the pavilion or the financial costs involved. Judged by the many supportive comments in answer to HSA’s e-petition there is universal backing for HSA’s continued management of the pavilion on a full-repairing lease at a rent of a peppercorn with one dissenting voice only hiding behind the anonymity of “the Truth”. The Truth is thought to be the father of 2 of the unelected councillors. The huge response to our e-petition universally condemns the Parish Council’s actions.

“We as a council are holding our budget flat and therefore better management of council assets is essential. The debt on the pavilion (currently some £380000) needs to be managed to reduce the impact on our precept and ability to provide other important services”.

Our Comment.

1. This assertion sounds impressive but does not stand up to close analysis. The Parish Council’s apparent justification for seeking a commercial rent is that Hazlemere’s Council-tax payers are subsidising the pavilion to the tune of £40000 a year because that is what the Parish Council pays out each year to do with the pavilion. The quote above needs to be read in the context of this so-called justification. We are aware that before Councillor Mapletoft and his supporters were Councillors the then Council took a loan of £450000 from the Public Works Loan Board to help fund the construction costs of the new pavilion repayable over a period of 14 years at the rate of £39500 per annum. The total payments are therefore £553000 (£39500 x 14) of which £450000 is repayment of the loan and £103000 interest. The reality is that the Parish Council is only subsidising the interest which works out at £7357.14 per annum (£103000 divided by 14). This phoney justification by the Parish Council is highly misleading. It is a gross misrepresentation.

2.  The Parish Council as then constituted were able to avoid paying VAT on the construction costs by agreeing with HMRC to grant a lease of the pavilion to HSA at a rent of a peppercorn only. We have not seen the relevant papers to do with this agreement with HMRC but FOI Request for these has been made. Apparently the length of the term of the lease was not stipulated by HMRC. However according to our reading of the relevant HMRC VAT Notice (Notice 708) if the Parish Council was to grant a lease to HSA or anyone else at a rent in excess of a peppercorn within ten years of completion of the building of the pavilion VAT would immediately become payable. Assuming construction costs of £700000 we calculate that applying HMRC’s rules where the use changes to commercial use within this the 4th year after completion of the building the VAT payable would be in the order of at least £73500 and probably significantly more as some of the invoices are likely to have been issued after 1st January 2010 when the VAT rate changed from 15% to 17.5%

Quote from Hazlemere Parish Council Statement issued on 4th February 2014 :-

“If terms cannot be agreed with the trustees of Hazlemere Sports Association , either the Parish Council may consider running the Pavilion itself, or a new operator may be invited to take a lease of the pavilion”.

Our Comment. This is more easily said than done.  The Parish Council has clearly not thought through what will happen if HSA is compelled to vacate on 4th May. Are these Councillors really going to be unpaid volunteers to carry out themselves the many aspects of running the Pavilion which HSA’s Management team currently carry out unpaid? A recipe for chaos!  Will the Parish Council really find a new operator willing to take on a full-repairing lease at a commercial rent? Where will the Parish Council find the money to pay the VAT other than through the precept?

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