Purpose

The SMD report sets out the rationale to grant
2 new AP school leases at Abbot Alphege on terms at less than best
consideration.

Decision

To delegate authority to the Head of Corporate
Estates to grant two leases at less than best consideration, with a
combined undervalue not exceeding £112,600 per
year, based on the outlined terms. This includes a new
three-year lease to Midsomer Norton Schools Partnership (MNSP) for
the ground floor at Abbot Alphege School at nil rent, where tenants
will cover service charges and utilities up to a capped amount, and
a new three-year lease with annual break clauses to The Partnership
Trust (TPT) for the first floor, also at nil rent, with service
charges and utilities paid by the tenant but similarly capped.

Reasons for the decision

The proposed lease arrangements aim to ensure
affordability for both MNSP and TPT during a transition period, as
charging rent, service charges, and VAT make the building otherwise
unaffordable. By offering leases at nil rent but with capped
service charge and utility costs, the Council enables essential
education services to continue without jeopardising statutory
provision or placing unsustainable pressure on budgets. This
approach balances the running costs with the wider community
benefit, maintains momentum for future development at Culverhay, and addresses the inability of schools
to reclaim VAT. The overall impact is managed by limiting the
Council’s financial deficit while supporting long-term
educational goals.

Alternative options considered

Although alternative sites such as Dartmouth
Avenue were considered and ultimately discounted due to high
conversion costs, the charging model for the property could involve
adjusted rent payments instead of service and utility charges;
however, affordable rental rates would fall significantly below
market value.