Government approval needed for university lease

A seven-year lease on the Guildhall in Frankwell ends in June 2022, and a new lease extending to 2030 is now being considered.

The council is legally required to achieve the best value for any property sales or leases longer than seven years, unless permission is granted from the secretary of state for local government to accept “less than best consideration”.

This will normally be allowed in cases where it will contribute to the “economic, social and environmental wellbeing” of residents, and where the value is under £2 million.

At a meeting of the full council next Thursday, members will be asked to authorise the request to the secretary of state.

A report by Mark Barrow, director of place, says the current lease did not require government approval as it was for a period of just under seven years.

To date, £2.52 million in rent has been deferred. The agreement is that the university will not pay rent as long as the project does not make a surplus, which it is forecast to do for the first time in the 2023/24 academic year.

All other running costs related to the building are met by the university.

Mr Barrow’s report says: “The need for a well educated, qualified and skilled workforce for Shropshire businesses remains strong and particularly when the economy recovers from the restrictions imposed by Covid.

“The opportunity to grow and supply highly qualified students from undergraduate, post graduate and apprenticeship programmes remains strong.

“There is a risk that the Secretary of State may not provide consent for a property lease at the Guildhall which is less than best consideration in terms of rent.

“Officers believe that the education, economic, social and community factors which underpin the rationale for a university centre in Shrewsbury remain strong and are in fact strengthened by the impact of the Covid pandemic.

“The future growth of UCS is strongly linked with the future investment and regeneration plans for Shrewsbury and Shropshire as a whole.

“The planned increase in inward investment and growth in employment and the visitor economy, which form part of the Shrewsbury Big Town Plan, will also lead to growth in the further and higher education sectors including increases in the recruitment and enrolment of international students.”

The report also says the council has invested £12.12 million in providing student accommodation at Mardol House and the Tannery but these are not generating the income that had been envisaged.

It adds: “The original income projections for the two venues assumed 95 per cent occupancy of UCS students.

“The actual number of UCS students requiring living accommodation has been lower than forecast in the original business case.

“The University of Chester is working on a new business case to increase student enrolment and retention, but given the difficulties for universities over the last 12 months due to Covid, it is unlikely that the council will benefit financially from the arrangement in the short term.”