Agenda item

To receive information report on the Council’s industrial units, as requested by the Committee at its January 2022 meeting.

The Committee received an update from the Strategic Asset Management and Property Services Manager on the current position in respect of the Council’s commercial and industrial property portfolio and the suggested proposals for their improvement and future management.

The officer explained that Selby District Council (SDC) owned a 50 percent stake in 40 industrial units across four sites within the Selby District; two situated in Sherburn in Elmet and two in Selby.  All of the sites were subject to a 50 percent claim of beneficial interest by North Yorkshire County Council (NYCC), and NYCC received 50 percent of the rental earned from the sites.

Members heard that the Council’s Asset Management Strategy 2015 – 2018 (AMS) incorporated a strategic action plan which required the Council to undertake a full review of the tenure arrangements pertaining to the industrial units in 2017, it was confirmed that this process was ongoing on a three yearly review basis. The AMS further identified that at the time of its drafting, all units had been assessed for energy performance and issued with an Energy Performance Certificate (EPC). 

The Committee were informed that one of the key things to affect the industrial units was the legislation around energy performance and the minimum energy efficiency standards.  The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, colloquially referred to as the Minimum Energy Efficiency Standards or “MEES Regs” imposed legislative minimum energy efficiency requirements for all private rented sector domestic and private rented non-domestic properties.

Members noted that since April 2018 the granting of new tenancies for properties which fell below the prescribed minimum levels of efficiency ‘E’, which were termed sub-standard property in the Regulations, was prohibited. However, the Council had been able to continue with existing tenancy arrangements as the legislation which required all existing tenancies of ‘sub-standard property’ to cease would not take effect until April 2023.  It was further noted that that there were substantial financial penalties which ranged from £5k to £150k for failure to adhere to the requirements of the legislation.

In addition, in March 2021, the Committee heard that the government had launched a consultation seeking views on proposals to amend the MEES 2015 regulations to mandate even greater levels of energy efficiency in non-domestic rented property in April 2027 and again in April 2030. 

Although still to be formally confirmed in revised legislation, the government had made clear its intention to require all non-domestic rented property to obtain a minimum ‘B’ energy efficiency rating by 1 April 2030, with a proposed interim step of ‘C’ by 1 April 2027.

It was highlighted that these increases in mandated energy efficiency requirements presented significant challenges for the Council, particularly in relation to the two Selby sites at The Vivars Centre and The Prospect Centre which were constructed approximately 30 years ago and thus would struggle to achieve the minimum ‘B’ rating due to their inherent construction limitations.

Members were advised that the Council had commissioned full energy audits of the two Selby sites earlier in 2022, which confirmed that both sites could be made to achieve the minimum ‘E’ rating required under MEES 2015 but delivering a ‘C’ and subsequently a ‘B’ EPC rating may not be feasible even with substantial investment.

The Officer confirmed that work was ongoing with the auditor to determine specifically what works would have the greatest impact on the current EPC ratings while exploring what improvements could be realistically implemented to achieve a minimum ‘C’ EPC rating so the sites could remain in operation until at least 2030; funding to undertake these works had been secured in the 2022-23 budget.

It was further confirmed that officers were actively working on proposals to improve one of the two sites at the Prospect Centre to achieve at least MEES 2015 requirements before 31 March 2023 to ensure the Council was not required to serve notice on its current tenants.  In parallel, discussions with tenants in the Vivars Centre were underway to facilitate a transfer of their businesses to the newly upgraded Prospect Centre once completed.

A Member praised the officer for producing a very comprehensive report.

Members debated the report and asked the officer several questions in relation to whether NYCC would be making a contribution to the cost of the works required, alternative site options for businesses, the involvement of NYCC in terms of LGR and ensuring that NYCC had no plans of their own for the sites and therefore agreed with the work to be undertaken: and electric vehicle charging points.

The officer confirmed that NYCC would be making a contribution towards the works involved at the sites, and that the Economic Development team had assisted businesses with other sites in the district, and indeed some had viewed the Prospect Centre, but the building had not been suitable for their business requirements.  It was further confirmed that the provision of electric vehicle charging points was not included as part of the EPC as it was to do with the energy efficiency of the building itself.  

In terms of what improvements could be implemented at the Prospect Centre to achieve a minimum ‘C’ EPC rating, Members heard that officers were investigating a number of improvements to include the installation of low power light emitting diode (LED) lighting, new heating provision, double or triple glazing; and a suspended ceiling system with 300mm insulation above.

Members queried if the EPC auditors were a private company and if their EPC conclusion decision could be appealed, the officer confirmed that the audit company were independent, but they had to follow the legislation.  

Members were in agreement that this approach was correct for the future improvement and management of the industrial unit but queried how confident officers were that the work required to upgrade the sites could be concluded by March 2023.  It was confirmed that officers were confident, and the intention was, to reach a level “C” EPC rating for the sites.    

Members supported the suggested Improvement Plans and asked that the plans and recommendations be forwarded to Councillor David Buckle as Lead Member for Communities and Economic Development, and also strongly advocated that a level “C” EPC rating was achieved by March 2023.

RESOLVED:

To note the content of the report and,

·         support the proposed approach to future improvement and management of the portfolio, and

·         strongly advocate that level “C” EPC rating was achieved by March 2023.