This weeks conundrum

With the local elections looming I have to confess I don't think I've voted for 15 years. Why? Well I was brought up in a small mining town that was actually the home town of Keir Hardie so about as left as left gets. I was a card carrying member for a whole but when Labour came to power and brought in IR35 in 2000 I swore I'd tear up my card and never ever vote for them again (and oh how the reasons behind that decision have proved correct - but that's another story).

So...to my conundrum... And it applies to all members of the golf club at which I am currently Captain. The council have decided out sell off the operation of their leisure facilities (of which the golf complex is the jewel in the crown. The club is effectively the main user of the complex and their is a reasonable relationship between club and complex. Nothing wrong with the principle of a private operator running it instead of the council, indeed we'd expect it to be run better by a specialist operator.
The process is ongoing and the prospective bidders have been whittled down to 2. Final selection however has been put back until after the election. Now for the political bit...the ruling Conservative group have inserted a 3 year change of use clause into the contract. In other words the successful bidder in 3 years time could start applying for planning permission to tear up the golf course and build houses on it.
Some extensive lobbying has been going on and the responses are along the lines of...
Labour
Of course we oppose this. This land is green belt land set aside for leisure use by the people of the town.
Conservative
It's a standard clause to make the offering more attractive, it would get invoked and if it did any change would be subject to planning permission approval.
Besides when the Labour group were running this council, leisure services ran at a loss to the taxpayers of this town.
I think I might be casting my first vote in 15 years tomorrow for a party that I said I'd never vote for again.

Has anyone else had any experience of a muni being farmed out to the private sector?
Is a change of use clause standard in these kind of offerings?
Do conservative councillors stand to make a backhanded mint when £280m worth of prime land gets sold to a Barratt/Wimpey??

Vote Labour.
No chance of the Golf Club buying the property I suppose?
It sounds as if you have a special place there, JAS, something important enough to be worth preserving. I wouldn't trust anyone with a 3-year clause as you describe.

The 3-year clause stinks to high heaven.  All I can say is, that the leisure facilities had better start turning a profit if you want to hang onto the land. Best defence you've got as I see it ... other of course than buying it as suggested by kwini.

Subcontracting the maintenance to a third party does generally make sense. These companies have access to equipment and expertise which your average council doesn't.

Make sure that you get performance standards clearly documented and detailed though, which is harder than it seems. Just saying "the course isn't as good as it was, or it should be" doesn't get you very far in a legal punch up.

As far as the change of use clause is concerned, I'd resist that. It's not the threat of losing the whole course because (unless the course is losing money on an epic scale) green space and recreational land is pretty much sacrosanct, it's more the threat of losing bits here and there for houses. If the sale will benefit the club in some way (like investment in better facilities) then that's ok, but if it just gets swallowed by the council then not good.

Jas

I am not familiar with the IR35 rules, what is it and why are you so against it?

Wikipedia is a wonderful thing...

http://en.wikipedia.org/wiki/IR35

ben

I read that and do not really understand the issue. It seems like a way to close a tax dodge, but given Jas said he was a labour supporter from a mining town I doubt he would have stopped supporting them if they had stopped people tax dodging

Back to that old legitimate tax avoidance vs illegal tax evasion argument. What many small businesses did pre iR35 was legitimate tax avoidance...e.g i engage with a client through my limited company, I invoice the client for the service I provide. My limited company then pays me a salary. I have to pay Tax and NI on that salary, my limited company also pays employers NI. My limited company also has to pay for any training to keep my skills up to date etc. anything left over can be paid as dividends once provision has been made for Corporation Tax which my limited company also has to pay on profits. The dividends paid are also taxable. What IR35 did was move the goalposts and insist that at least 95% of company income had to be paid as salary thus making it impossible to trade solvently and indeed moving the goalpoststo the point where legitimate tax avoidance became illegal tax evasion. Because the legislation was not properly thought through it was clear that it was going to cause severe structural problems in the IT industry job market. Various experts tried to tell them this at the time but they were hell bent on implementing something about which they had no clue.

Over the years the net loss to the exchequer because of IR35 has been huge. Britains reputation as a flexible IT centre of excellence has been severely damaged. Howcome??....

The use of individual Freelancers helped IT managers to cover the peaks of work so that they didn't have to make redundancies during troughs.Right from the early days of IR35 large clients became reluctant to keep using individual freelancers, and instead preferred to outsource en-bloc to large multinational consultancies (e.g. IBM, Fujitsu, Andersen Consulting - how coincidental that a director of one of these beneficiaries was also Trade and industry Secretary at the time the legislation was drafted!!!!) Nowadays the likes of Infosys and Tata (TCS)....have moved in - as an aside go check how virtuous those 2 are at paying corporation tax on the profits they leech out of UK companies and large government organisations. Not only that, the Infosys's TCS's and IBMs have either taken the work to India or brought Indian workers over here on Poopie salaries. The next effect is a LOT less spending money on our high streets as most of those employees send large proportions of their income back to the subcontinent. So effectively for the UK taxpayer its a lose lose lose situation.


Also ask yourself this.

Our local muni is now due to be closed down by the council early next year - apparently "A golf course is a discretionary service, there's no law that says you have to consult with people if you want to get rid of it."

It was previously farmed out to Jack Barker , who basically ran it as a dump -
"Under the environmental waste legislation, the Jack Barker Company has dumped hundreds of tons of waste-fill rubbish on to the driving range site and 18th hole, completely destroying copses of trees and bushes, leaving a 20ft high mound of earth in their place"
.. as well as "landscaping" half of the back nine with huge banks of said rubbish.

Council were not interested in hearing any offers from any other parties - except the builders.
So we are soon to have 1000's of new homes instead of a lovely green golf course.

Tory councillor has been ousted, but unfortunately the council as a whole remains under Tory control and the plans will continue.

Its a scandal - the land was given to the borough for the use of the people, but its now to be sold down the river.

JAS wrote:...Has anyone else had any experience of a muni being farmed out to the private sector?...

Yes. Nottingham Council have done it twice and, as far as I understand, both concerns have been royally shafted. If the Tories get that clause in, forget it. If a politician, these days, promised me the sun was coming up tomorrow, I'd want it in black and white and legally watertight.

busted wrote:Our local muni is now due to be closed down by the council early next year - apparently "A golf course is a discretionary service, there's no law that says you have to consult with people if you want to get rid of it."

It was previously farmed out to Jack Barker , who basically ran it as a dump -
"Under the environmental waste legislation, the Jack Barker Company has dumped hundreds of tons of waste-fill rubbish on to the driving range site and 18th hole, completely destroying copses of trees and bushes, leaving a 20ft high mound of earth in their place"
.. as well as "landscaping" half of the back nine with huge banks of said rubbish.

Council were not interested in hearing any offers from any other parties - except the builders.
So we are soon to have 1000's of new homes instead of a lovely green golf course.

Tory councillor has been ousted, but unfortunately the council as a whole remains under Tory control and the plans will continue.

Its a scandal - the land was given to the borough for the use of the people, but its now to be sold down the river.

Where are you referring to?

The area where I grew up is all 1930s houses, built on top of several golf courses. Sometimes supply / demand means this has to happen, I guess you need to think whether the environmental / social benefits of the golf course make it worth retaining.

Let's be honest, most of the UK is flooded with golf courses, it sounds like this course has no architectural merit and the land could be put to better use.