Council forced to sell off land (From Swindon Advertiser)

Council forced to sell off land

9:00am Monday 18th March 2013 in News

Council leader Rod Bluh

THE site of the Old Town Co-Op store is being auctioned off by the council to raise money to pay off more than £3m of equal pay claims.

The sale, which is for the freehold of the site, will take place tomorrow and it is hoped it will bring in around £3.5m. The majority of this will be used to settle the claims, mainly brought by current and former female staff.

The property comprises part of the supermarket – the main entrance from the car park and the Co-Op travel store – together with part of the parking provision at the rear of the property.

It is let to Midcounties Co-operative Estates Ltd for a term of 125 years from 1984, bringing in £56,750 per annum, exclusive of rates.

Following a number of test cases, councils nationwide must provide back payments to compensate for discriminatory salaries.

Up until the end of 2012/13, councils have been able to meet this liability from borrowing as the Government previously issued a capitalisation directive, meaning the cost could be spread over a number of years.

But the Government has recently changed this, so equal pay costs would fall on the revenue budget, which pays for everyday services, in 2013/4, or could be met through capital receipts gained from the sale of council assets.

Council leader Rod Bluh, said the equality payments totalled about £3.3m.

“We’ve done that to raise the capital receipt basically. We have got a problem that we have got an equality pay liability which normally we would have capitalised and paid off over a number of years, and the Government has said we cannot do that any more.

“We can only do it by capital receipts and revenue. Because our revenue position is so tight, we have to sell an asset to pay for it.

“I don’t think the Government’s idea is good, personally. I think it was introduced with virtually no notice. It means we now have to sell an asset that can provide future income to pay for it. This is not something we would have chosen to do unless we had been forced.”

Des Moffatt, Labour’s finance lead, said: “There were test cases.

“When these test cases had been settled, these ones that have been piled up in the local authorities over the years are required to be settled and the Government decreed that that settlement must only be from sale of assets, therefore local government is required to sell under pressure some of their assets.”

Coun Moffatt said the Co-op might buy it or it might be bought by a pension fund, for example, but it would make no difference to the store, except that it would potentially pay the rent to someone else.

He added: ”I accept it has to be sold. I believe it will generate enough money on its own in order to satisfy the needs.

“I don’t expect that to have a serious impact on Swindon society or the Co-op.”