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May 2020

Last Updated: 27/05/2020

Harrogate

Council's decision to give tenants rent-free period cost £200,000

by Calvin Robinson

| 28 May, 2020

One council tenant, who did not wish to be named, said he couldn't believe it when he received the e-mail informing them of the decision. Some of the council's tenants have also had government grants.

Harrogate Borough Council's decision to give its commercial tenants three months rent free is set to land local taxpayers with a £200,000 bill.

A report to council leader, Richard Cooper, and Cllr Graham Swift, executive member for economy, at the authority's urgent cabinet meeting in March detailed the cost of the decision before it was approved by senior councillors.

Since then, the authority has seen its debt from the coronavirus outbreak spiral from an estimated £10 million to £15 million and is now considering furloughing staff to address the shortfall.

While most local authorities decided to defer rents for local companies, the borough council opted to wave them completely for its tenants.

Unlike other businesses, council tenants have had a double dose of public money with many applying for emergency government grants on top of a rent free period. It leaves the authority facing questions over whether the decision was a good use of taxpayer money or not when the cost of the pandemic is revealed.

One council tenant, who did not wish to be named, said that they knew of at least one fellow council tenant which was still operating and that most of the smaller businesses will have applied for the government's £10,000 grant.

They said they were given no advanced notice of the decision until they received an e-mail to inform them of the rent free period.

They said: "I was shocked and could not believe it, nobody asked for it.

"Obviously I am pleased, but I wonder if it might have been better if they found out those businesses who cannot get the grant and supported them."

At the time of the decision, a joint statement from Cllr Cooper and chief executive Wallace Sampson said the authority wanted to encourage others to offer support.

It said: “Our commercial tenants will be offered three months’ rent free and we’ll be doing all that we can to encourage other landlords in the district to consider what support they can offer their tenants.”

Earlier this month, some landlords described the decision as “unnecessary” at a time when the council is considering furloughing some of its staff in the future to help make ends meet.

Meanwhile, Pat Marsh, leader of the Liberal Democrats group on the council, said she felt the decision was rushed.

“I think in hindsight it was maybe a decision which should have been tempered,” she said.

“For me, I think it was a bit of a rushed decision that I wish I had given more thought.”

Harrogate Borough Council has been asked whether it intends to extend the rent free period, but had not responded at the time of publication.