This document has been prepared in response to a document published by the Parish Council and which contains a significant number of false statements and inaccuracies. Although we are in difficult times, we feel the need to put on record the true position to avoid raising unnecessary concerns with our shareholders.
We apologise for the length of the document but a certain level of detail is required to present the full facts.
- Introduction (Parish Council point 1)
The Shop Committee have been working on this project since 2016 and the Parish Council became involved in mid-2018. However, we do agree that the Parish Council is the legal owner of the building and therefore the body responsible for the management of the construction of the building. However, the project is to deliver a community hub for the village and requires us all working together.
- Lease for the building (Parish Council points 2, 7, 13)
As you will be aware the proposed terms of the lease were agreed with the Parish Council in October 2018. The main terms of the lease were included in a “heads of terms” document which is normal business practice prior to a full lease document being produced. This four-paged document was put together with considerable effort and research by the Shop Committee and was agreed with the Parish Council and signed in November 2018. The document was then used to:
- Obtain grants
- Obtain the Post Office contract
- Raise monies from shareholders
Whilst accepting that this does not replace a formal lease it is nevertheless a legal document. For the Chairman of the Parish Council to state “ the Heads of Terms were not fit for purpose and were hurriedly drawn up” is unbelievable given that they were circulated to the Parish Council, signed by the Chairman, minuted as such. They were subsequently used by the Parish Council in obtaining their grants many months later.
In Autumn 2019 the Parish Council without any prior discussion with the Shop Committee and apparently without sending the heads of terms document to their solicitor amended the proposed terms of the lease from those agreed in the heads of terms to increase the rent for the first three years from £1 per annum to £3,600 per annum, change the property that the lease covered and increase costs for the shop.
It would be normal good business practice if one party wishes to change the agreed terms that discussions are held before a formal lease is drafted. This avoids incurring unnecessary legal costs. The failure of the Parish Council to do this has resulted in significant additional legal costs for, in effect, a complete redraft of the lease.
As you would have expected, the Shop Committee rejected the lease at which point on 16 November 2019 the Parish Council requested the Shop Committee return the keys meaning that we have since then been unable to do any work on the shop.
We have since then had a number of meetings with respect to the lease and following a meeting on 18 January 2020 we provided on 19 January the Parish Council with a document setting out the revised terms that had been agreed at the meeting. We have to date not been provided with any sight of a revised draft lease and do not therefore know whether it agrees with the outcome of our 18 January meeting. We do not see why completing works and obtaining building regulations means that we cannot be provided with sight of a draft lease for approval.
The Chairman of the Parish Council state, “Under the original Head of Terms, the Shop Committee was to pay half of the legal costs – this the Parish Council have not as yet asked them to do”. We are concerned with the “not as yet asked them to do”. We should point out that it was the Parish Council who changed the original agreed terms and therefore incurred the extra costs.
The comment regarding the café is minor; this would simply require a slight amendment to the “permitted use” clause in the lease
- Grant monies (Parish Council points 6)
The Shop Committee in order to assist with the cost of the building obtained a grant from Rural Four amounting to £24,994. At a meeting in the summer of 2019 between the chairman and clerk of the council and Vernon Hockley and Paul Rossington it was agreed in principle that £10,000 of the Rural Four grant would be passed through to the Parish Council to contribute to the costs of plumbing, electrical and climate control works that were to be incurred and paid for by the Parish Council. These costs were included in the Parish Council’s total building cost shown on the spreadsheet presented at that meeting.
In order to assist the Parish Council with their tax status it was agreed that these monies would be passed through as a “lease premium” on signature of the lease.
Subsequently and to assist with Parish Council cash flow and to expedite the completion of the shop the following monies were paid directly to suppliers for work that was included in the total building cost budgeted by the Parish Council. This was agreed with the Chairman of the Parish Council
|MJ Lighting||Building and car park lighting||2,491|
|Effective Air Solutions||Air conditioning||4,509|
|Topp Tiles||Tiles for toilets||160|
|By choice||Hot water cylinder||327|
|City Electrical||Cabling and emergency LED’s||219|
|Ainsley’s Industrial Flooring||Aborted concrete flooring||1,600|
We would also note that none of these costs appear in the Parish Council records meaning they could not have paid these costs.
The cost in relation to the aborted concrete flooring is a cost that was incurred as a result of the council’s mismanagement of its contractor and their access to the site. Although having no legal obligation to do so the Shop Committee having some monies remaining from the grant agreed to contribute £1,600 to the cost.
As part of the lease negotiations and to assist the Parish Council it was agreed to pay a lease premium of £5,000. This would bring the total contributed to the Parish Council to £14,306; significantly in excess of the £10,000 originally agreed.
This information was communicated to the Parish Council in an email dated 27 March. Despite this we received on 3 April an email from the Parish Council stating that “there are some inaccuracies in statement that have been made with regards to funding that the Shop Committee have paid out”. We replied on 3 April asking for clarification as to what these inaccuracies relate to but we have not received a response.
For the Chairman of the Parish Council to state that “this has not happened due to an overspend by the Shop Committee” is simply not true.
Of the remaining £10,688 of grant monies an amount of £3,849 has been paid to Openreach in July/October 2019.for the installation of telephony and IT connections to the building. This included the cost of ducting etc for the installation.
Equally for the Chairman of the Parish Council to state “the Parish Council have spent considerable amount of money on installing ducting from the new building to the road…..” is again untruthful. The Parish Council records do not show any payments to Openreach or any other costs identified as relating to this matter.
The remaining balance of the Rural Four grant is for the installation of solar panels for the building.
As can be seen and as has been explained to the Parish Council on a number of occasions this will have utilised the full grant and no other grants have been received.
In multiple communications to the Parish Council we have asked for confirmation that the Rural Four monies of £5,000 is spent solely on the shop and not used for any other purpose which is a Rural Four requirement. We have not received confirmation from the Parish Council that this is the case. We have this money available to pay on signature of the lease and once the relevant works are complete and certificates obtained.
- Outstanding works (Parish Council points 5 and 8)
In February 2020 we provided the Parish Council a bullet point list of what we believe to be the outstanding works. Despite asking for a response to this list on a number of occasions we have not had any response. We note that the Chairman of the Parish Council states that this work, where possible has now been completed. However, it is clear from an external inspection that there are still a number of areas still outstanding and we have simply asked for a reply which states which works have been completed, which will be completed by the Parish Council and which they do not intend to complete. We cannot understand why this simple informative task cannot be quickly achieved.
We are clearly concerned that there may be works that the Parish Council expect us to bear the cost of, which will not have been budgeted for
We note that the Chairman states that they “do have funds to complete the outstanding building works on the outside of the building”. We do not know what outstanding works this relates to but note that a budget of £5,800 has been included in the 2020/21 Parish Council precept resulting in a 26% increase of that precept to the residents.
- Parish Council overspend (Parish Council points 6 and 8)
We do not believe that the Shop Committee is responsible for any of the Parish Council overspend. The Parish Council is responsible for the management of the project and has the contractual relationship with the building, electrical and plumbing suppliers.
The budgeted costs for the project were as follows:
Building (excluding Phase 2 solar panels) £93,226
Car park and paths £47,962
The total cost was therefore budgeted to be £141,118.
Grants were obtained by the Parish Council amounting to £119,882, the shop would contribute £10,000 of the Rural Four grant and the Parish Council would contribute up to £10,980 meaning that the project was fully funded.
We understand that the shell of the building was completed within the original budget. However during late 2019 we were provided by the Parish Council a document which showed that the total net cost of the building and car park (excluding other professional fees) had risen to approximately £154,000 (excluding the future cost of solar panels) which together with the £9,306 paid directly by the shop gives an estimated spend at that time of £163,000, an increase of £22,000. This excludes the Openreach cost paid for by the shop of £3,849.
We do not know whether the above costs will have increased with any work subsequently undertaken or with any work that still needs to be completed.
We note the Chairman states “there have also been considerable funds spent on behalf of the shop facility to provide extra security in the form of alarms and security cameras”. We note from the Parish Council records that the total spend on security systems was £6,310 compared to a budget of £4,950, the amount included in the total budgeted building cost noted above. We are not aware of the reason for the increase of £1,360.
- Post Office (Parish Council point 13)
As communicated at the shareholders meeting in December 2019 we have a contract with the Post Office but as agreed with shareholders we are deferring implementing the Post Office until such time as the shop is up and running with its other activities. We have communicated this to the Post Office who understand our position. The Post Office contract provides for them to pay for their equipment not for general costs for the construction of the building so we do not see what relevance the comments made by the Chairman to the Parish Council other than to try and discredit the Shop Committee.
- Security (Parish Council 9 and 10)
As part of the security installation noted above the Parish Council have ordered and paid for an electronic access control system to be installed with wiring for each internal and external entrance door. This was to facilitate the secure and controlled access by 30+ volunteers as each would have their own access card the use of which would be recorded for their own protection.
Although we raised this issue at a meeting with the Parish Council on 18 January and documented that this area needed further discussion in our reply on 19 January the Parish Council have decided they will not use this system for the community room and use a simple keysafe instead. We believe that this is not acceptable for the following reasons which were set out in our 6 March communication.
- The use of a key-safe and key-safe codes has already been proven to be insecure for the Village Hall and the Pavilion where the codes are generally common knowledge, known by a large number of people and used to gain access when not appropriate.
- The loss of the key would result in potentially unauthorised access to the building and/or the need to frequently replace locks. It would also mean that access may be compromised in an emergency situation when urgent access is required but the key is not in the key-safe.
- Unauthorised access to the Community Room compromises the security of the building and the electrical and water supply to the shop given the intake for these utilities are accessed via the Community Room. This could result in serious damage and loss to the shop.
- The operation of and access to the shop was designed with entrance through the Community Room to provide the appropriate level of security (double door entry) for the volunteers. Any changes to this will compromise this security and the safety of the volunteers.
- The design of security for the shop has already been communicated to both the Post Office and our insurers.
- The use of a simple key mechanism for the front door to the shop does not provide an adequate level of security for the shop and its volunteers. For example, departure and closing of the building at the end of the day will be visible from a wide outside area. Any changes required to the front door and/or opening procedures will result in unacceptable cost and risk to the business and its 30+ volunteers.
We have not been given any logical reason why the available electronic access control system is not to be used.
- Warranties (Parish Council point 12)
We would respond that although the Parish Council have purchased the fridges and freezers, it is the shop who will utilise them and presumably bear the cost of any breakdowns which will not be covered by a warranty due to the length of time since purchase. We are not sure whether the comment means that the Parish Council will pay these costs.
- Meeting with the Parish Council (Parish Council point 4)
We requested a meeting with Parish Council in our 6 March communication. We were then informed by e-mail on 11 March that we would be invited to the next Parish Council meeting and then on 25 March informed that ”The Parish Council discussed your request for a meeting and would prefer these meetings to be held within the public element of the Parish Council Meeting therefore you were invited to the next Parish Council meeting”. Previous meetings with the Parish Council have resulted in the discussion being curtailed after three minutes.
We have not received an invite to a “Special meeting.”
- Size of building (Parish Council) point 11
We do not have any issue with the size of the building. We are concerned that the separation of the management and security of community room from the rest of the property will give rise to additional costs and problems and does not comply with the original heads of terms and grant applications.
The Parish Council statement is clearly not correct in many areas. It makes false claims and statements which are designed to blame the Shop Committee for the costs and delays. We feel we have acted with integrity and have compromised in a number of areas already.
Although incredibly frustrating we will however continue our efforts to make progress on the shop so that when we move out of these difficult times we are in a position to get the community hub up and running and provide the entire village with the benefits they deserve.