Decision

Exemption from publication: There are confidential appendices to this report, which are exempt by virtue of paragraph 3 of Schedule 12A of Part 1 of Schedule 12a of the Local Government Act 1972 because they contain information relating to the financial or business affairs of any particular person (including the authority holding that information).

To agree the proposed terms for new Agreement under the Telecoms Code and instruct in-house Legal Services to complete the Lease

Reasons for the decision

It is proposed to re-let the land to EE & H3G (the current Tenant). The agreed rent is consistent with the valuation principles set out in the Electronic Communications Code (ECC), and reflects the precedent established in the Vache Farm case, which classified the site as an “unexceptional rural site.” Furthermore, the existing agreement is excluded from the Landlord & Tenant Act 1954, confirming that the ECC governs the terms of occupation.

The reduction in rent and the shift toward more tenant-friendly terms are largely attributable to the new Electronic Communications Code (“the New Code”), introduced under the Digital Economy Act 2017 and effective from 28th December 2017. The New Code implemented a "no scheme" valuation method for assessing consideration for mast and telecommunications sites, alongside less restrictive provisions for assignment and site sharing. This revised valuation approach has led telecom operators to seek substantial rent reductions across their site portfolios, often ranging from 40% to 90%.

The Operator could also begin proceedings under ECC for a new Agreement to be determined by the Lands Tribunal on terms that are less beneficial to the Council than proposed and the Council would be liable for significantly higher professional fees.

Alternative options considered

As the agreement has expired, failure by the Council to take timely action may increase the risk of unlawful occupation of the land.

An alternative option would be to not renew agreements with existing occupiers and consider using the land for an alternative use. Whilst achieving a rent in excess of the agreed terms is possible, this would be significantly outweighed by the professional costs in obtaining vacant possession of the mast site from the Operator.