MINUTES OF THE MEETING OF LONGPARISH PARISH COUNCIL 

(REMOTE ONLINE MEETING) ON MONDAY 22 JUNE 2020 AT 7.30 PM

Present: Christian Dryden (Chairman), Natasha Rouse (Vice Chairman), Kim Lampard, Malcolm Edwards, James Hillier, Danielle King, Camilla Janmohamed, Wayne Sykes, Jim Sawyer, and Peter Hull.  

In Attendance: David Drew (TVBC), Sally Lawman (Clerk), and 18 members of the public.

ITEM 1 – APOLOGIES  

1.1      None

ITEM 2 – DECLARATIONS OF INTEREST  

2.1       None

ITEM 3 – APPROVAL OF MINUTES  

3.1      The Minutes of the Parish Council meeting held on 8 June 2020 remotely were approved.  They will now be published on the website.  Matters arising from these Minutes will be reviewed at the next full council meeting on 13 July.

ITEM 4 – PWLB LOAN FOR COMMUNITY PUB AND HUB THE PLOUGH INN  

4.1      CDRY outlined the order of business for this item.  One Member of Public had registered to speak and made a statement in favour of acquiring the Plough Inn for use as a community pub and hub.  As other Members of the public were also in attendance, the Chairman invited others to add their comments and three other residents also commented on the proposal.

4.2      Community Consultation Results and Feedback

CDRY presented the report on the Community Consultation (see Appendix 1) which was circulated to Councillors prior to the meeting.  The consultation took place between 23 May and 21 June 2020 (extended deadline from 8 June).  There had been 121 individual responses representing 29% of households in the parish.  69% of household respondents are in favour of the proposal.  24% of household respondents are against the proposal.  7% of household respondents were undecided.  CDRY outlined the key comments and issues that came out of the responses, both in favour and against the proposal.  CDRY thanked everyone for contributing to the consultation.

4.3       Report from The Plough Inn Loan Procurement & Legal Matters Working Party

KL presented the Working Party report (see Appendix 2) which had been circulated to Councillors prior to the meeting, and is available for public viewing on the Longparish village website.  The report contained the recommendations of the Working Party that the Council should seek approval from the Secretary of State for Housing, Communities, and Local Government to apply for a PWLB loan of £300,000 over 50 years to acquire an interest in The Plough Inn for the benefit of the community as agreed between the Council and Longparish Community Pub Limited (a Community Benefit Society).

4.4       Report from Finance Working Party

ME presented the Finance Working Party’s report (see Appendix 3).  The report had been circulated to Councillors prior to the meeting.  ME reviewed the procedures for managing the parish council finances, and the main focus of the report was the consideration by the council of the cost implications of proceeding with the PWLB loan application, resulting in the purchase of The Plough Inn.  The report contained the recommendation of the Working Party that the Council should make a specific reserve of £11000 as a contingency fund for 12 months’ repayments of the loan.  If the loan is not drawn down, these funds can be re-allocated as necessary.  ME also presented a draft Budget for 2021-22 (see Appendix 3) demonstrating the approximate effect of this potential loan on Council finances.  Summarising, ME concluded that the project is designed to be cost-neutral to the council, the council can set aside a contingency fund, but overall the council finances are in a healthy position, and the purchase of The Plough Inn is a good opportunity for the community.

4.5       Councillors’ debate and questions

The Councillors raised a number of questions for both the Plough Inn Working Party and the Finance Working Party, and were also able to clarify certain aspects of the proposal with members of Longparish Community Pub Limited in attendance at the meeting. 

NR asked how the costings had been worked out for the renovations, and was informed by a member of LCPL that the property is essentially in relatively good condition, and will not require a massive renovation, but a focus on essential repairs, and re-fitting the kitchen, toilets, and heating (renovation details have been shared in confidence with Councillors).  Once up and running, other items will be refurbished/repaired as part of a scheduled long-term plan.  There is a contingency of £20k in the renovations budget.  When asked about plans for a detailed survey of the property, LCPL felt that they had enough knowledge of renovating period properties to be able to work without one, however the cost of a survey has been worked into the LCPL Business Plan.  Some Councillors suggested that a survey would be advisable, and the findings could potentially be factored into the offer price. 

LCPL had valuations done approx 18 months ago; one for the property completely renovated and operating, another completed but not functioning, and a third in its current state (these have been shared in confidence with Councillors), and LCPL has determined an offer price based on these.  LCPL feel strongly that the level of their offer should be reasonable to the vendor, and sufficient enough to assure TVBC that LCPL is serious about its offer to purchase the property. 

The Treasurer of LCPL was asked how funding from shares was looking.  He advised that the share offer officially opens on 26 June for one month, however interested parties have currently pledged £100k. 

It was noted that the 6-month moratorium has now ended, so the vendor is free to entertain any offer.  LCPL hopes to be able to present a joint offer for the property as soon as finances are secure. 

It was confirmed that the PC can terminate the arrangement and not draw down the loan funds if at any stage of the process, it seems prudent not to proceed. 

LCPL were asked what would happen if the offer price is rejected by the vendor, and they advised that they hoped that the offer would be seen as fair, however there is no guarantee that the vendor will sell the property to LCPL.  KL confirmed that there will be no increase in the PWLB loan – the application is up to £300,000.  Whoever purchases The Plough Inn must attempt to run it as a pub.  If the vendor/new owner do nothing with the property, a Compulsory Purchase Order can be sought from TVBC, however it is more likely that there would be some form of arbitration meeting before this would occur. 

Following concerns by some residents that Longparish cannot support two pubs, NR expressed the view that neither pub has relied entirely on trade from Longparish.  Both, in their time, have been run by competent landlords and prospered, and with the closure of The Plough Inn approx. 5 years ago, and the closure of the neighbouring Hurstbourne Inn, the Cricketers Inn has had minimal competition, but has not been prosperous for a variety of other reasons.  There is a good opportunity for the two pubs to work together flexibly.  ME commented that customers want a good pub, and that two good pubs would attract more customers.  JS commented that re-opening The Plough Inn will benefit an increasing nearby population.  KL commented that consultation feedback supports the notion that re-opening The Plough Inn will benefit the village.  Regarding the amount of consultation responses, JH commented that, in marketing terms, almost 30% response was a good result, and it was remarked that it was unlikely that 100% response would ever be achieved.  PH commented that how well the shares sell would be another indication of public support, and KL confirmed that there would be no need to proceed further with the loan if there is not enough take-up of shares.  JH commented that he was satisfied with how the figures had been presented in the Finance Report, and although it is seemingly a lot of money, property is a good investment.  NR reminded all present that the PC has secured a previous loan for the renovation of the village hall, so there is familiarity with the process.  CDRY advised that the current loan is due to finish in September 2022, and that the loan for the village hall is paid for through the precept, and there was no consultation for it.  She remarked that securing The Plough will mainly benefit future generations, and councillors should take into consideration the potential benefits this building can provide to the community.  The PC will support The Cricketers Inn and the shop if a similar opportunity arises, but these are not currently for sale, whereas The Plough Inn is, and this could be the only opportunity the village has to secure a community asset.  JH expressed his reservations that The Cricketers Inn would be at a disadvantage mainly due to the low cost of the lease of The Plough Inn, however having no pub is a strong fear.  ME stated that he hopes that The Cricketers Inn is very successful, but the PC has no control over the rent of The Cricketers Inn.  Andy Jolliffe from LCPL said he had contacted with the current landlord, he seems relaxed and un-phased by the proposal, and willing to work together for the success of both pubs.  LCPL confirmed that refurbishment is likely to take six months, and it is anticipated that The Plough Inn could potentially re-open in Spring 2021, all being well.  DK commented that renovated, The Plough Inn would be worth at least as much as the value of the loan. 

CDRY then gave a final opportunity for Members of the public to make any further comments, with one person strongly opposed to the proposal on the basis that pubs are failing on a large scale nationally, a situation further worsened by the pandemic, and it is unfair to lumber future generations with the loan debt.  Another commented that if the business fails, the asset itself will still remain, and could be used in another form or disposed of to repay the debt, and ultimately this is just the consideration of the PC to make an application for a loan at this stage.

4.6       Resolutions

As per the recommendations set out in The Plough Inn Loan Procurement & Legal Matters Working Party report (see Appendix 2), KL proposed the following Resolutions:

4.6.1   To borrow £300,000 over a term of 50 years at a Fixed Rate to support the acquisition of The Plough Inn as a community asset.

           Proposed by KL, seconded by NR, with all councillors agreeing unanimously.

4.6.2   To seek the approval of the Secretary of State for Housing, Communities and Local Government to apply for a PWLB loan of £300,000 over the borrowing term of 50 years to acquire an interest in The Plough Inn for the benefit of the community as agreed between the Council and Longparish Community Pub Limited (a Community Benefit Society). The annual loan repayments will come to around £11,000. It is NOT intended to increase the council tax precept for the purpose of the loan repayments.

            Proposed by KL, seconded by NR, with all councillors agreeing unanimously.

4.6.3   The Council confirms the authority of the Proper Officer and Responsible Financial Officer to continue to seek and receive specialist advice on the project, including legal advice.

            Proposed by KL, seconded by ME, with all councillors agreeing unanimously.

4.6.4   The Proper Officer and Responsible Financial Officer be authorised to instruct lawyers and sign any required documentation to implement this decision.

            Proposed by KL, seconded by ME, with all councillors agreeing unanimously.

4.6.5   The Parish Council submit an application to become a shareholder in LCPL at the minimum level.

            Proposed by KL, seconded by JH, with all councillors agreeing unanimously.

ITEM 5 – TRANSFER TO RESERVE ACCOUNT FOR PWLB REPAYMENTS CONTINGENCY FUND

 

5.1      As per the recommendations set out in The Finance Working Party report (see Appendix 3), it was resolved by a unanimous vote to transfer the sum of £11,000 to the Reserve Account to create a contingency fund covering 12 month’s repayments of the PWLB loan.

ITEM 6 – DRAFT BUDGET 2021/22

6.1       A new budget is prepared annually in December to be agreed in January, however it has been necessary to put together a Draft Budget for 2021/22 as part of the PWLB loan application process.  A Draft Budget for 2021/22 (see Appendix 4) was circulated to Councillors prior to the meeting.  It was resolved by a unanimous vote to approve the Draft Budget 2021/22, subject to any required changes between now and the end of December 2020.

ITEM 7 – ANY OTHER BUSINESS AND FORTHCOMING DATES  

7.1      Mary Snow

CDRY advised that, on behalf of the PC, she will be sending a birthday card to resident, Mary Snow in recognition of her 100th birthday.

7.2       Date of next full PC meeting Monday 13 July 2020  

Meeting ended: 21:24

Signed ………………………………. [Chairman]  

Date ……………………  

 

 Appendices

  1. Community Consultation Responses & Feedback
  2. Report from Plough Inn Working Party (K Lampard)
  3. Report from Finance Working Party including Reserves Policy (M Edwards)
  4. Draft Budget 2021/22

 

Appendix 1

Report to Parish Council on proposal for PWLB Loan

Feedback from Community Consultation 23 May to 22 June 2020

9 March: PC sets up Working Party for PWLB loan and to determine how residents will be kept informed and how they can contribute to the decision-making process, or obtain further information about the process.  Residents will be kept informed of all PC decisions through Hill & Valley meeting summaries, and Minutes of meetings published on the website, and will be signposted to this information through the LCA Facebook page.

 

5 May PC receive formal request from LCPL to take out a PWLB loan £300k for interest in Plough.

 

11 May PC agrees to proceed in principle. Working Party recognises need to be open and undertake appropriate consultation.

 

Households

Working Party decides that since there is a potential impact (albeit minimal) on the precept, the consultation should reflect the views of households rather than individuals, since that is the basis on which the precept is calculated (where households are split the views can be shared). This also avoids larger households having a bigger influence.

There are 294 households in Longparish, data take from the Longparish Profile published by Test Valley Borough Council.   https://www.testvalley.gov.uk/assets/attach/4080/Longparish.pdf

Survey

The question of a survey was discussed but it was decided that the direct approach of hand-delivered information for every household, together with the opportunity to attend a meeting and engage in conversation or email correspondence, for example, to raise any further questions would allow for much more open discussion and allow the PC to obtain a much clearer understanding of people’s views on the loan.  An online survey only reaches that proportion of the village who are online or engage with online surveys, whilst paper surveys would not allow for proper discussion of the issues, and the community had already answered a survey from Plough Ahead, the results of which showed strong support for reopening of the pub.

PWLB and HALC guidance do not require a Yes/No poll, but permit the PC to decide for themselves the format in which it will consult residents (this is confirmed by email from HALC 19 June).

 

Immediate Action:

Rather than wait for publication in Hill & Valley, a double-sided A4 flyer was delivered by hand to every household in the village in the week commencing 18 May, setting out clear information, and inviting everyone to let the PC know their views by 8 June (the date of the next PC Meeting) by attending that PC meeting by Zoom, or through a variety of other methods. The flyer was also circulated by LCA by email and on social media, and a dedicated page[1] of the village website was set up with a more detailed version of the flyer information. Articles in Hill & Valley ensured that every household in the village was subsequently reminded of the request to give the PC their views on the loan. Villagers were invited to remain anonymous should they so wish.

 

Extension of consultation period

LCPL had planned to release their Business Plan at the beginning of the consultation period, but this was delayed by third parties (due to coronavirus). Aware that that Plan contained detailed research on the business structure, prospects, finances, background, opportunities, threats etc. that would be helpful to villagers in understanding the project and therefore the need for, and risks of, the loan, the PC extended the consultation period to Sunday 21 June, and called an Extraordinary Meeting of the PC for Monday 22 to consider the results of the consultation alongside the loan. The Business Plan was released and widely circulated on 6 June, giving villagers over 2 weeks to see it and raise any questions with either LCPL or the PC before making their views known.

A steady stream of emails and communications then continued to be passed to the PC throughout the consultation period. The PC shared villagers’ questions and our responses with the community through FAQs[2] added to the website, which allowed us to address issues that might not have been clearly understood had we simply set up a survey.

 

PC Meeting 8 June

The PC meeting on 8 June was very well attended, the PC explained the background and progress on the proposal, and gave everyone the opportunity to speak and tell us their views. The Working Party was authorised to work with LCPL to find a suitable legal structure to buy The Plough and govern the relationship between the parties. More questions were raised at this meeting, so in addition to offering villagers the opportunity to listen to a recording of the Zoom audio, we added another set of FAQs[3] to the village website.

Subsequently the PC have continued to seek the views of villagers, repeating invitations to let us have their views, including advising them that they can remain confidential if they wish, and repeatedly confirming the extension of the consultation period to just before the date of an Extraordinary Meeting of the PC on 22 June.

Community Views Received

Summary of the number of responses received:

Responses

No

% of the total 294  Households

Total responses received (excluding household multiples)

87

29.6%

Total number of responses received (including those from the same household)

121

Summary of responses in favour and against the proposal:

Responses summary per household

No

% of Responses

% of Total Households

Responses in favour of the proposal

60

69%

20%

Responses against the proposal

21

24%

7%

Undecided

6

7%

2%

Individual Responses summary

No

% of Responses

Responses in favour of the proposal

91

75%

Responses against the proposal

24

19.8%

Undecided

6

5%

The key issues, comments and concerns raised by the respondents are presented below.

 

Conclusion

It has not been possible to hold a Public Meeting in the Village Hall due to Covid restrictions, however the response numbers indicate nearly 30% of households, 121 individual responses have taken the trouble to respond with their views to the information provided by the Parish Council and LCPL, through the leaflet drop, the Longparish website, the FAQs and the Plough Ahead website. The responses have come from across the village, not just from one area.

69% of households that responded, support the Parish Council taking out a loan from the PWLB for the purpose of purchasing the Plough for the benefit of the community.

24% of households that responded are against the proposal to take out a loan to purchase the Plough.

6% of households that responded were undecided.

Appendix 2

Report to Longparish Parish Council

PWLB Loan for The Plough Inn, Longparish

Asset of Community Value

In 2018 The Plough was made an ACV along with The Cricketers and the village shop, recognising their importance in supporting and sustaining the village community. Now, The Plough is closed and for sale. It has a last chance to be run as a successful pub before planning would be likely to permit change of use to residential. This historic village asset would be lost alongside the opportunities it offers for this village to build a business that truly serves our needs as a community. 

A key proposal addressed in the Longparish Parish Plan is to ‘actively support and encourage the long-term success of our existing facilities’. Test Valley Borough Council Local Plan resists the loss of community facilities such as public houses unless they can no longer be made viable, and in rejecting an appeal by the pub’s present owner against change of use in 2019 The Planning Inspectorate[4]  reaffirmed that “there is no doubt that the Plough Inn is valued by the local community” and “There is strong interest locally to retain the appeal property as a community facility”.

Benefit to our village

The Plough is in the geographical centre of the village, near the school, church and village hall. It could provide services to the community including a place to meet, eat and drink, a respite for visiting walkers along the adjacent Test Way, B&B accommodation, business space, and vital parking for school drop-off. Villagers have rallied to form Plough Ahead and now Longparish Community Pub Limited (LCPL) a community benefit society which must use any profit for the benefit of the community, to secure this asset for the long-term benefit of Longparish.

The Council has undertaken a community consultation between 23 May and 22 June during which they have shared information about the proposal to take this PWLB loan for this purpose, and invited the community to share their views with the Council. Detailed information has been shared on Council pages of the village website [5], on Plough Ahead’s website[6], at meetings, on noticeboards and through the Parish Magazine to allow villagers to make an informed decision. A full report on the consultation will be prepared for the loan application if this goes ahead. Villagers have been invited to let the Council know what they think at Council meetings, by email and by letter, anonymously if they so wish. Results of the Council’s extensive community consultation (which closes the day before this meeting) will be shared at the meeting.

Best chance to keep this community asset

LCPL has brought together an experienced group who have done rigorous research culminating in a detailed Business Plan to buy, refurbish and reopen The Plough. They have sought external advice from experienced community pub companies, advisory groups and valuers and analysed opportunities and threats. They have already secured grant and loan funding, and formal approval for the imminent launch of their community share offer. They have asked for support from the Council, who have access to PWLB funding for community projects such as this.

The PWLB Loan

The Council has been asked to borrow £300,000 over 50 years to support the project, less than half the total project cost of £629,995. The loan will be used to buy The Plough. Additional funds raised by LCPL will contribute to the acquisition costs, pay for the refurbishment work required, and provide working capital for the community pub business.

Total funding for the project:    Projected acquisition costs, including costs and fees   £413,325                                                         Remedial works Costs                                                 £147,000

                                                Start-up Costs                                                                          £  45,670

                                                Contingency                                                                            £  24,000

                                                                                                                                                £629,995

 

Paid for by:                              Community share offer LCPL                                                  £230,000

Plunkett Foundation’s More Than a Pub loan/grant                     £100,000

Parish Council PWLB loan                                                       £300,000

                                                                                                                                                £630,000

PWLB Loan Cost to Parish Council

PWLB loans from HM Treasury are cheaper than commercial loans, so the pub business will benefit from our investment in the property because charges to LCPL to cover repayments will be lower, particularly in the crucial early years. The Council will seek a 50-year term to reflect this, and in view of our long-term commitment to the building, and the long-term benefit it will give to the community.  We recommend a Fixed Rate loan repayable by fixed half-yearly instalments, so that the cost is clear and consistent. The interest rate varies, but at date of writing costs are as follows:

Loan amount

£ 300,000

Loan Period

50 years

Interest rate as at 15.6.20

2.66%

6-monthly instalments

£ 5,442

Annual cost

£ 10,884

Total repayment over 50 years

£ 544,194

Income to cover Repayment of Loan

The Council has received legal advice on the structure of the relationship between LCPL and the Council: the Council should acquire the freehold of the premises and grant a long lease with works obligations to LCPL. The agreement between LCPL and the Council will provide for LCPL to meet all costs of acquisition of the property (including legal fees and disbursements) as well as continuing costs such as insurance and additional accounting costs; the property will be sub-let to LCPL on a long lease, at a below-market rental in consideration for payment of a premium to cover the balance of the purchase cost. There will be no immediate unbudgeted impact on the precept.

Risks and Mitigation

The Parish Council will need to pay loan repayments of c. £11k a year whether or not the pub is open.  Costs associated with owning the property will also accrue regardless of whether the business is operational. To minimise risk, the Council has:

  • Consulted The Plunkett Foundation – including their dedicated adviser
  • Researched the best legal structure for ownership and operation of the pub and the protection of the Council’s financial commitment, and received legal advice from a lawyer with experience of community pubs (whom the Council will engage further if the project goes ahead)
  • Explored best practice and learning from others including Tollerton and Church Fenton Parish Councils who have taken similar steps.
  • Considered the impact of COVID-19 on the business plan, concluding that the village needs control over a community asset now more than ever, and that by the time the pub is operational the worst impacts on businesses should be receding.

The Council will have no involvement in the Business Plan or running the pub; it will simply own the property and lease it to LCPL. The business should thrive - evidence from similar community pubs shows a strong track record of success. The Council believes the Plough will become a busy village hub able to adapt to changing village needs and returning profits to the community. If it does not, LCPL will remain responsible for making payments to the Council to cover the PWLB loan. The agreement between the Council and LCPL will ensure that:

  • LCPL will put aside a contingency fund to cover at least 18 months’ rental payments.
  • The Council will put aside funds to cover a further 12 month loan repayments, to be used only if LCPL is unable to meet payments and whilst other avenues for payment of the loan are explored.
  • The Council will be represented on the LCPL management board.
  • The Council will work with LCPL to explore alternative uses of the premises for the community if the pub business fails.
  • As owner, the Council will be able to explore alternative tenants for the premises if LCPL fails, and will be able to charge a higher, commercial rent in this event.
  • The Council will be able to explore other uses (subject to planning regulations) if the planned use cannot be made viable with alternative tenants.
  • As a last resort, the Council will be able to sell the property and fund early repayment of the loan and any costs from the sale proceeds.

Impact on Precept

Only if the project fails completely will there be any impact on the precept. A PWLB loan is automatically secured on the Council’s revenue, so if all the above steps fail to secure funds to meet loan repayments or early repayment, there is a minimal risk that the Council would have to increase the precept to cover loan repayments for any remaining years of the loan. Annual payments of £11,000 to PWLB at today’s rates would cost a Band D Council Tax payer £2.69 a month, a 4.69% increase at today’s level.

Council Tax Band

Precept

2020-2021

Additional Costs

Month

Year

A

38.23

1.79

21.56

B

44.60

2.09

25.14

C

50.90

2.30

28.73

D

57.35

2.69

32.32

E

70.09

3.29

39.50

F

82.83

3.89

46.68

G

95.58

4.49

53.86

H

114.70

5.38

64.64

What if the Council declines to support the Plough project in this way?

In the current climate LCPL is unlikely to secure commercial funding at a cost low enough to proceed with the project, so the share offer and PWLB loan would not go ahead. The Council would lose the chance to own or control this acknowledged village asset, and does not know if and when there will be any opportunity to buy or support an ACV for the benefit of the village in the future. Without village support, The Plough may be sold to a commercial enterprise which would run a pub solely for profit (and if this fails might gain a change of use which would terminate any village use) or remain empty and deteriorating for years.

Recommendation

The Working Party recommends that the Council RESOLVES as follows:

  1. To borrow £300,000 over a term of 50 years at a Fixed Rate to support the acquisition of The Plough as a community asset.
  1. To seek the approval of the Secretary of State for Housing, Communities and Local Government to apply for a PWLB loan of £300,000 over the borrowing term of 50 years to acquire an interest in The Plough Inn for the benefit of the community as agreed between the Council and Longparish Community Pub Limited (a Community Benefit Society). The annual loan repayments will come to around £11,000. It is NOT intended to increase the council tax precept for the purpose of the loan repayments.
  1. The Council confirms the authority of the Proper Officer and Responsible Financial Officer to continue to seek and receive specialist advice on the project, including legal advice.
  1. The Proper Officer and Responsible Financial Officer be authorised to instruct lawyers and sign any required documentation to implement this decision.
  1. The Parish Council submit an application to become a shareholder in LCPL at the minimum level.

Figures correct at 15 June 2020

 

Appendix 3

LONGPARISH PARISH COUNCIL

Financial Report June 2020

The Parish Council operates two bank accounts with Lloyds Bank. One is our current account to cover day to day transactions and the other is to hold our specific and general reserves.

The Reserves Account holds surplus funds as well as previously agreed budgets for various projects and contingencies. The balances as at 18th June 2020 is as follows,

Current Account, £8,469.24

Reserves Account, £78,006.91

Our internal auditor has previously commented that the reserves held by the Parish Council, have been too high and that we should look to reduce these either by spending on various capital projects or by using to top up our income to fund day to day expenditure. As noted in last year’s Financial Report, the Parish Council has agreed to match expenditure to income as closely as possible by increasing the Precept in line with inflation each year and so we have agreed to hold our reserves in a separate account so that we are able to closely manage the reserves position and reduce these over a period of time. This Reserves Account was opened in February 2020.

In addition, we have agreed a one off increase to the precept so that it matches our expenditure as the effects of inflation over the last few years has led to a mismatch between our income and expenditure.  The intention of these actions is that we are now able to manage our day to day expenditure more closely and to earmark our reserves for specific projects throughout the year.

The Parish Council has begun to prepare a number of projects to reduce the amount of reserves held and has allocated various amounts for specific purposes. These figures have been transferred to the Reserves Account and a Reserves Policy (see below) was created and agreed in March 2020. The Reserves Account currently holds £78,006.91 (see Reserves Policy for allocation of these funds). 

The Plough

The Parish Council is currently considering applying for a PWLB loan of £300,000 with a term of 50 years to assist Longparish Community Pub Limited (LCPL) to purchase The Plough Inn (Asset of Community Value). LCPL is a Community Based Society that was established with the sole aim or purchasing and running The Plough as a pub business. The annual repayments for this loan will be approximately £10,884 based upon figures quoted on 15th June 2020.

Full ownership of The Plough site, will be granted to the Parish Council who in turn, will grant a long lease to LCPL. The rental payments, under the terms of this lease, will cover the loan repayments and associated costs incurred by the Parish Council so that the loan should be cost neutral to the Parish Council.

LCPL will therefore make payments of £12,000 per year to the Parish Council (the first to be paid on the signing of the lease). In addition to this, LCPL will hold the same figure in a contingency fund to cover a further 18 months’ rent if this cannot be funded from income from the pub business. The Parish Council has also set aside £11,000 as a contingency fund for the loan repayments to cover a further year if required. The legal agreement between the Parish Council and LCPL will also ensure that in the event that the pub business fails, that the Parish Council has full rights to sell the property if they wish so that the sale proceeds may be used to fully repay the outstanding loan at that time. An Extraordinary meeting of the Parish Council to confirm this arrangement is scheduled for 22 June 2020 and the results of the resolution will be recorded in the minutes, shortly thereafter.

The Parish Council is also in the early planning stages of the following projects:

  • Purchase of new notice boards for the village (to be costed)
  • Faggoting of the stream bank (to be costed, but most likely to be paid for from grants obtained)
  • Drainage solution for the village hall car park (to be costed)
  • Replacement fencing for the playground (quotes being obtained)

General expenditure for 2020/21 is estimated to be approximately £19.5k and the precept request was submitted to TVBC to reflect this. 

The PC does receive some income from the hire of the football pitch, and through cemetery fees, but this is variable and therefore unreliable.

Historic Precept Figures

2019/20 Precept = £17920

2020/21 Precept requested £19558

2021/22 Precept estimate £21641 (N.B Estimate at the moment and usual increase is assessed in December)

Band D Equivalent Dwellings = 343

 

 

Longparish Parish Council

Financial Reserves Policy

Policy Statement

Longparish Parish Council is required to maintain adequate Financial Reserves to meet the needs of the Parish Council. The purpose of this policy is to set out how the Council will determine and review the level of Reserves. Sections 32 and 43 of the Local Government Finance Act 1992 require local authorities to have regard to the level of Reserves needed for meeting estimated future expenditure when calculating the budget requirement.

The Council will hold reserves for three main purposes:

  • • A working balance to help cushion the impact of uneven cash flows and avoid unnecessary temporary borrowing
  • • A contingency to cushion the impact of unexpected events or emergencies
  • • A means of building up funds, to meet known or predicted requirements

There is no specified minimum level of Reserves that an authority should hold, and it is the responsibility of the Clerk/Responsible Finance Officer to advise the Council about the level of Reserves and to ensure that there are procedures for their establishment and use.

 

Scope

Types of reserve - Reserves may be categorised as General or Specific.

 

GENERAL RESERVES are funds that do not have restrictions as to their use. These Reserves can be used to smooth the impact of uneven cash flows or can be held in case of unexpected events or emergencies. The level of the General Reserve for the forthcoming year will be based upon the budget approved by the Parish Council and should be equivalent to no less than six months’ expected expenditure for the financial year.  This amount will be adjusted annually in line with the approved budget (agreed in January annually).

Where the Reserve amount has arisen because of excess funds through cancelled or obsolete activities, the Council may elect to use these funds for another purpose for which no other budget is available.

 

GENERAL RESERVE 2020/21

AMOUNT

PURPOSE

£11,000.00

EQUIVALENT OF PC EXPENDITURE FOR SIX MONTHS AS PER 2020/21 BUDGET

APPROVED 13 JANUARY 2020

SPECIFIC RESERVES can be held for several reasons and shall be used only for the purpose for which they are created.

  • • Renewals – to enable services to plan and finance an effective programme of equipment replacement and planned property maintenance. Since a modest change in the budget in any one year may have a disproportionate effect on the precept, these reserves are a mechanism to smooth expenditure so that a sensible replacement programme can be achieved without the need to vary budgets dramatically from year to year.
  • • Carry forward of underspend - expenditure committed to a project but not spent in the budget year. Reserves can be used as a mechanism to carry forward this resource.
  • • Developers Contributions – proceeds from developers that can only be used for specified purposes.
  • • Other Specific Reserves may be set up from time to time to meet known or predicted liabilities.

Where the purpose of a Specific Reserve becomes obsolete, or where there is an over-provision of funds, the excess may, on the approval of the Council, be transferred to other budget headings within the revenue budget or to General Reserves or to one or more other Specific Reserves.

SPECIFIC RESERVE 2020/21

AMOUNT

PURPOSE

£5000.00

FOR PLAYGROUND REPAIRS/REFURBISHMENT

Procedure for adding to the Reserve during the Financial Year

  1. The Parish Council may decide to set aside further Reserve amounts for specific purposes
  2. All decisions to create a new Reserve will be voted upon at a full council meeting, and this will be Minuted by the Clerk
  3. The agreed amount will be transferred to the Parish Council Reserve account by the Clerk, and detailed in the accounts
  4. Details of new Reserves will be listed in this Policy
  5. All Reserve amounts will be reviewed annually

Procedure for removing funds from the Reserve

  1. The Parish Council may decide to withdraw Reserve amounts for specific purposes
  2. All decisions to withdraw Reserve funds will be voted upon at a full council meeting, and this will be Minuted by the Clerk
  3. The agreed amount will be transferred to the Parish Council current account by the Clerk, and detailed in the accounts
  4. Amended amounts of Reserves will be listed in this Policy

Details of Reserves held:

DATE

AMOUNT

PURPOSE/DESCRIPTION

BALANCE OF RESERVE ACCOUNT

28 FEB 2020

£1.00

TO OPEN RESERVE ACCOUNT

£1.00

12 MAR 2020

£11,000.00

General Reserve

£11,001.00

12 MAR 2020

£5,000.00

Playground Reserve

£16,001.00

30 MAR 2020

£40,000.00

Playground Reserve (CIL Funding)

£56,001.00

18 June 2020

£11,000.00

PWLB Contingency

£67,001.00

18 June 2020

£500.00

Annual contribution to playground reserve

£67,501.00

18 June 2020

£10,000.00

Village Hall car park drainage repairs

£77,501.00

18 June 2020

£500.00

Contribution to Village Design Statement

£78,001.00

N.B £5.91 has also been added to the account as bank interest

Appendix 4

Longparish Parish Council - 2021/22 Budget DRAFT

Period to

 

Year to 31 March 21

Year to 31/3/14

Year to 31/3/15

Year to 31/3/16

Year to 31/3/17

Year to 31/3/18

Year to 31/3/19

Budget 2019/20

Budget 2020/21

Budget

Income

 

 

 

 

 

 

Precept

          17,500

  17,500

  17,500

  17,500

  17,500

  17,500

  17,920

  19,558

  21,641

Cemetery fees

               157

       331

       289

       651

       280

    1,406

       300

       300

              300

Income from football pitch hire

       340

       300

       300

              300

Handbook sales

                 -  

         10

          -  

                -  

Grants

          11,948

          -  

    5,255

          -  

                -  

Donations

          24,909

          -  

          -  

          -  

                -  

PROPOSED RENT FROM LCPL FOR THE PLOUGH INN

         12,000

Allotment rents

                 36

         36

         36

         36

         41

       139

         36

         64

                64

VAT refund

            5,946

    1,008

       944

       412

    2,000

       481

       100

    1,200

              250

Other

            1,440

       210

          -  

       171

           5

                -  

TOTAL

          37,027

  19,095

  18,769

  18,599

  25,247

  19,871

  18,656

  21,422

         34,555

 

Expenditure

Clerk's pay and expenses

            2,303

    3,392

    3,230

    3,622

    3,774

    4,592

    4,000

    4,000

           4,595

General administration

            2,952

    2,135

    1,169

    1,901

    1,671

    1,429

    1,972

    2,034

           2,178

Elections

                 -  

         24

          -  

          -  

          -  

         50

          -  

                -  

Open spaces

            7,165

    8,480

    6,067

    9,374

    5,705

  13,675

    8,560

    9,200

           9,210

Communications

               535

       750

          -  

          -  

       685

       500

       500

              500

Footpaths

          14,799

          -  

          -  

          -  

       500

       500

              500

Playground reserve

       500

       500

       500

              500

Village Hall

          15,152

       193

    6,128

    6,128

          -  

          -  

                -  

Community Association

               690

       554

       397

       804

          -  

       350

       600

       600

              600

Village Plan (implementation)

                 -  

          -  

          -  

          -  

       300

       300

              300

Village Design Statement Review project

       500

       500

                -  

PWLB Loan repayment (VILLAGE HALL) *

            2,188

    2,188

    2,188

    2,188

    2,188

    2,188

    2,188

    2,188

           2,188

PWLB Loan repayment (PLOUGH INN)

         10,884

ANICLLARY EXPENSES RELATING TO PLOUGH INN

           1,000

Peripherals/Gen Expenses

                 -  

         63

          -  

          -  

                -  

GRANTS

    1,239

    1,000

    1,000

           1,000

Chairman's Fund

            2,085

       378

          -  

           1,000

VAT

            6,591

       944

       412

       354

       481

    1,428

       100

       100

              100

TOTAL

          54,460

  18,821

  13,743

  24,371

  19,947

  25,586

  20,770

  21,422

         34,555

 

Closing Bank Balance

          45,312

  45,586

  50,613

  44,832

  50,132

  44,417

  23,311

  23,311

         10,311

* This loan will be fully repaid in September 2022

GENERAL ADMIN =

Insurance

£600.00

ICO

£35.00

Hill & Valley

£375.00

HALC

£328.00

Internal audit

£320.00

External audit

£320.00

Training/meeting expenses (Members)

£200.00

£2,178.00

OPEN SPACES=

Grass-cutting

£3,840.00

Subscriptions

£40.00

North Acre lighting

£60.00

Vhall car park lighting

£160.00

Clean-up Day lunches

£400.00

Clean-Up Day expenses

£300.00

Memorial cleaning

£200.00

Rent - football pitch

£50.00

Rent- playground

£10.00

TVBC Grounds maintenance

£900.00

RoSPA inspection

£150.00

Allotment

£100.00

Parish Lengthsman overspend

£500.00

Southside Common

£1,500.00

Contingency

£1,000.00

£9,210.00

RESERVE ACCOUNT

General Reserve

£11,006.91

Playground Reserve

£45,500.00

PWLB Contingency 12 mths *

£11,000.00

Village Hall car park drainage

£10,000.00

Village Design Statement

£500.00

Total

£78,006.91

* To be agreed at PC EGM 22/06/20

 

End of Report

[1] http://www.longparish.org.uk/parish-council/the-plough-inn.html

[2] http://www.longparish.org.uk/parish-council/the-plough-inn/1597-faqs-on-the-plough-loan.html

[3] http://www.longparish.org.uk/parish-council/the-plough-inn/1607-further-faqs-on-plough-loan.html

[4] Appeal Decision

[5] http://www.longparish.org.uk/parish-council/the-plough-inn.html

[6] https://www.ploughahead.co.uk/