Agenda item

The Corporate and Commercial Projects Officer presented an update to the Group about Management of Open Spaces on New Developments

 

The Corporate and Commercial Projects Officer said that prior to 2000 the Council had adopted all open spaces with no cost to developers, that between 2000 to 2011 the Council had adopted open spaces with a commuted sum from developers and, that from 2011 it no longer adopted open spaces, with developers being required to submit an open spaces management scheme as part of their planning application. She said the Council’s current approach was the one most commonly taken by local authorities.

 

The Corporate and Commercial Projects Officer highlighted some of the main concerns raised by residents about management company practices, including in relation to transparency and fairness with a lack of awareness of fees and billing; quality of maintenance work and; poor customer service with no right to challenge or hold the management company to account. She said that some management companies included clauses that allowed residents to take over management of their open spaces.

 

In relation to national activity, the Corporate and Commercial Projects Officer referred to the Leasehold and Freehold Reform Bill which was introduced to Parliament in November 2023 and on which it was due to report by 1 February 2024. She explained that key aspects of the Bill were that it would likely grant leaseholders the same rights as freeholders and would also create a New Homes Quality Board and Code, which would require developers to provide clear and accurate information about management services and charges and ensure that buyers knew that they should appoint an independent legal adviser.

 

The Corporate and Commercial Projects Officer explained that while the Council had limited powers, it could act as a facilitator and encourage good practice and build closer relationships with developers at an earlier stage in the process, inviting them to attend the Council’s Growth Boards (for example Fairham and Bingham) and support residents’ groups in making contact with management companies. The Council would also explore development of a Good Practice Code.

 

Mr Wadell from Greenbelt presented an update to the Group about Greenbelt Management Company. He said that the company had been operating for 25 years in the UK and originated from Strathclyde Council in the mid-1990s, ultimately becoming fully autonomous. The company had evolved over time to take on new work and bring in new specialists as open spaces became more complex, including amenity spaces, sustainable urban drainage features and biodiversity net gain commitments. He said that the company initially funded adopting sites through commuted sums from developers but due to the increased complexity of spaces it had moved to requiring residents to pay management fees.

 

Mr Wadell explained that Greenbelt had a standard form of agreement with developers that could be flexed to suit particular sites and that the company predominantly took ownership, or a long lease, for sites. He said that the company looked to implement long term plans, including ecological plans, for sites allowing it opportunity to get to know residents. He said that Greenbelt had built in the right for residents to end their arrangement with the company and take control of management, through ‘consumer options’ if they wished and that this would be built in as a legal right in the future.

 

The Chair asked for more information about residents opting out of management service contracts. Mr Wadell explained that developers went out to tender and appointed the company to manage the open spaces on a site and that once all houses had been sold, ownership for that site was transferred to that company. Greenbelt were able to start engaging with residents and managing open spaces on a site earlier through a lease agreement with the developer.

 

Mr Wadell said that Greenbelt give residents on their sites the option to self-manage their open spaces, as long as certain criteria were met, for example that they had a 51% majority and that the local planning authority had given consent and that outstanding debt had been recovered.

 

Councillor Way asked a number of questions, including about the definition of open spaces and transparency about services and fees. She said that many residents were unaware of much of what was covered, including that they could receive charges for future matters such as fly-tipping, and as such it was having a financial and emotion toll on them. Mr Wadell said that Greenbelt had a 97% payment rate but was aware that some residents were struggling to pay. He said that Greenbelt had a duty to maintain the open spaces and as it needed residents to make payments to do this, it tried to keep charges reasonable. He said that there would be some non-routine costs, such as for storm damage and vandalism, which could not be predicted for which it tried to spread the costs to soften payments.

 

Mr Wadell said that the company wanted to work with residents and maintain a good relationship with them and would work with residents to find solutions where possible.

 

Councillor Way referred to responsibility for ensuring that residents understood about fees and services and Mr Ralph said that a management company could not control what information was provided to residents at the point of sale, but that Greenbelt tried to ensure that developer sales teams provided as much information as possible. He thought that buyers taking independent legal advice would help provide this scrutiny. The Director of Development and Economic Growth said that the Council was looking at engaging with developers regarding the sharing of information with prospective buyers to ensure that it was communicated prominently to allow buyers to make informed decisions.

 

Councillor Butler referred to additional levies for one-off occurrences such as storm damage, in addition to Council Tax, and fees for facilities used by people not on the estate and noted how this could been seen as unfair by residents. The Director of Development and Economic Growth said that Government led changes in requirements for open spaces on housing estates had increased over the years, from being small parcels of land to becoming more complex spaces, and as such the Council could no longer afford to maintain them. She understood the perception of unfairness across older and newer estates and said that finding an equitable solution was challenging.

 

In relation to unexpected charges, Mr Ralph said that there was the option of creating a sink fund to cover such expenses but this came with difficulties, for example if not spent how would residents selling their property be reimbursed.

 

Councillor Grocock asked about the relationship between the Council and management companies, having greater transparency and governance, the possibility of the Council having a preferred management company and whether other bodies such as town and parish councils could adopt open spaces.

 

The Corporate and Commercial Projects Officer referred to appendix B of the report which set out the Council’s proposals for how it could take a more active role and develop relationships. She confirmed that the Council did not have a role in appointing a management company and so could not determine who would be appointed but that developing a good practice code could set out the Council’s expectations. She said that the Council could only require that the developer appoint an appropriate body to carry out management, not which body, but that this could be a town or parish council if they had the skills and expertise and the developer chose to appoint them.

 

Councillor Chewings asked why the Council had moved away from managing open spaces in 2011 and whether the Council could return to doing so if it were to receive SUDS monies. He wondered what other local authorities did.

 

The Director of Development and Economic Growth said that a reason for the change in practice was due to developers not wanting to pay large, commuted, sums upfront to the to cover the next 15 years, but rather were choosing to spread it annually per dwelling. She said that it was for the developer to choose how they funded the work. She said that the Council would also need to consider how the maintenance would be funded after the 15 years.

 

The Director of Development and Economic Growth said that if a developer did not wish to pay S106 monies then it may withhold transferring ownership of an open space to the Council. She said the Council could investigate whether it could enforce a developer to pay a commuted sum. She said that the Council had looked at how other local authorities approached this matter and it was not aware of any who had taken management in-house. The Corporate and Commercial Projects Officer referred to the only related practice the Council was aware of being by Stratford on Avon Council developing a policy around them exploring taking over management if their town and parish councils were unable to do so.

 

Councillor Matthews asked how many management companies there were in Rushcliffe, whether the Council was mandating the creation of these open spaces through its planning process and whether it would be possible to change the Council Tax banding for the estate housing to increase income.

 

The Director of Development and Economic Growth said that the Council only retained 7% of the Council Tax levy and so to raise sufficient funds would require a significant increase, above that allowed by Government. She said that the Council did not control Council Tax banding levels for houses which was carried out by the valuation office. She said that the Council was currently compiling a list of all management companies within the Borough.

 

The Chair referred the Group to actions in Appendix B of the report. In relation to the SPD, the Planning Policy Manager said that it would cover a wide range of matters including open spaces and whilst the Council may not be able to mandate what developers did, it would set out best practice and the expectations of the Council.

 

Councillor Way referred to a proposal before Cabinet in 2021 to create an SPD. She asked whether the Council could give consideration to suggestions from this Group, including the possibility of estates sharing facilities, for example adjoining estates sharing a play area rather than having one each, encouraging cooperation and a more holistic approach. The Planning Policy Manager said that in the sequence of developing planning documentations that SPD hadn’t taken place as yet and said that only matters covered by the Local Plan could be included in the SPD but that aspects outside of it could be included in other guidance.

 

Councillor Grocock suggested that the Council use robust and specific language in its documentation and use its influence to encourage best practice. The Director of Development and Economic Growth said that that was what the Council wanted to achieve through a Good Practice Guide.

 

The Chair referred to section 4.11 of the NPPF regarding use of conditions and suggested that the Council seek external advice about how it could be most robust.

 

The Chair referred to the Good Practice Guide development and noted that it was developers and not management companies who signed up to NHQC. The Director of Development and Economic Growth said that the Leasehold and Freehold Reform Bill would give leaseholders the same rights as freeholders, giving them a right to redress. She said that the Council could include reference to management companies’ complaints procedures in the Good Practice Guide and confirmed that the Council would seek to use strong and clear language. She proposed that once created, the Guide be taken to the Local Development Framework Group for scrutiny as per other planning policy documentation 

 

Mr Ralph said that a stewardship framework was being developed by Building with Nature, which while voluntary was envisioned that quality, open space green infrastructure management companies would sign up to. He said that Greenbelt had been heavily involved in contributing to the framework. Mr Wardell added that Scotland had introduced a Property Factors Act for open spaces management which set out a suite of standards and which required management companies to create a written statement of service for their residents. He said that Greenbelt had applied their written statement of service to all of their sites across the UK even though it was not required to do so in England and Wales.

 

The Chair referred to the proposed advocacy role by the Council. The Director of Development and Economic Growth said that the Council recognised that there were pockets of residents on some estates who were dissatisfied with the services and that the Council would focus attention there initially, in making introductions between residents and management companies where these weren’t taking place.

 

Councillor Way suggested inviting residents to attend the Growth Board meetings and the Director of Development and Economic Growth noted that the Growth Boards covered a wide remit of matters and suggested that a forum outside of those constraints would be more beneficial to bring related parties together.

 

The Chair asked for clarification on the role of the Council. The Director of Development and Economic Growth said initial work would be to set out terms of reference in relation to the role of the Council, with the Council looking to facilitate initial introductions between residents and management companies and encourage management companies to sign up to the Code and encourage best practice. She said that the Council would not act as an arbitrator between parties.

 

Councillor Chewings proposed that recommendations a, c, d, and e be retained and that recommendation b be removed, due to further financial scope work being required. He proposed that three additional recommendations be added, as set out below:

f)              Investigate the legal position on whether a commuted sum to cover maintenance for 15 years could be legally enforced by Rushcliffe Borough Council

g)             Investigate the work carried out by Stratford on Avon District Council and invite a guest speaker from the District Council to attend a Growth and Development Scrutiny Group meeting

h)             Provide a detailed forecast for revenues received by Rushcliffe Borough Council from an example development (for example Fairham) over the 15 year period.

 

The proposals were seconded by Councillor Grocock.

 

Councillor Grocock said that he would wish to have more information relating to the gap between the Council’s income of £77k and estimated costs of £11m.

 

The Director of Development and Economic Growth explained that revenues received by the Council from Council Tax from a new development site would already be accounted for to pay for provision of existing and statutory services, such as refuse collections. She explained that additional services such as management of open spaces would require new funding stream/s.

 

It was RESOLVED that the Growth and Development Scrutiny Group:

 

a)             Acknowledges the complexities of the management of open spaces and the multiple factors at play leading to no simple solution;

b)             Accepts the conclusions arrived at in section 5 regarding the financial risks to the Council in pursing the adoption of open spaces or acting as the management company and supports the conclusion arrived at;

c)             Supports the proposal for the Council to take a more active role working with developers at the Planning stage to establish the Council’s expectations regarding the service expected for its residents;

d)             Supports officers continuing to work through the emerging issues with developers, management companies and residents, with the aim of providing greater transparency and governance for future homeowners of new estates, whilst recognising the Council has no authority over the operation of management companies;

e)             Seeks to raise the general issues and concerns raised by residents on new housing estates with developers and management companies to raise the profile of the issues being experienced

f)              Investigate the legal position on whether a commuted sum to cover maintenance for 15 years could be legally enforced by Rushcliffe Borough Council

g)             Investigate the work carried out by Stratford on Avon District Council and invite a guest speaker from the District Council to attend a Growth and Development Scrutiny Group meeting

h)             Provide a detailed forecast for revenues received by Rushcliffe Borough Council from an example development (for example Fairham) over the 15 year period.