£9 million payment for former district council HQ finalised

East Devon District Council is expecting a cheque for £9 million to arrive in their bank account on Tuesday.

The £9,019,605 would be from Lifestory Group Limited (formerly known as Pegasus Life Ltd), for their purchase of the former council HQ at the Knowle in Sidmouth

Planning permission has been granted to convert the former council HQ into a 113-apartment assisted living community, and an initial deadline for the sale to be completed was Wednesday, December 18.

That date was missed and East Devon District Council started legal proceedings to secure the agreed and contracted £9m payment, together with damages and any additional costs.

Speaking at Wednesday night's cabinet meeting, Simon Davey, Strategic Lead for Finance, told councillors that Pegasus Life have told the council the completion and payment will take place on January 14.

He said: "We are still maintaining our legal position but have been told that the balance and payment will come into the account on January 14."

His comments during a discussion on the draft revenue and capital budgets for 2020/21, which were adopted by the cabinet. It will now be discussed by a joint meeting of the Overview and Scrutiny Committees and the Housing Review Board.

Recommendations from these meetings will be presented back to the Cabinet on February 5, 2020 when members will finalise budget proposals to be recommended to Council for adoption.

The draft budget includes a proposed £5 rise in council tax for Band D payers, and Mr Davey said the proposed budget would not see any reduction in front line services.

He added: "The draft budget has been worked to leave £448k available to allow members to consider key areas for inclusion in the budget and some additional requests from service areas."

Suggested additions for the budget include £16,000 towards the creation of an East Devon Poverty Strategy, a sum of £323,000 to be set aside and ring fenced for tackling climate change, £19,000 to fund additional use of the Business Information point, and £90,000 to help support Cranbrook town council deliver services in the town as the council tax base hasn't quite reached the sustainable level yet.

Councillor Ian Thomas, portfolio holder for finance, said that while changes to both the local government funding formula and the business rate retention scheme had been delayed for a year, it meant that the challenges of the financial cliff edge outlined of a £2.7 million funding gap over the next four years had just been delayed by a year.

He also added that there was a worrying tendency for slippage and that significant items of savings originally planned to meet what was the financial cliff edge have not been delivered, including the delay on a decision on car parking charges increases, or initiatives not delivering at the targeted level of income or the timing envisaged.

The meeting also heard that they have yet to make a purchase from a £20m fund that was set up to invest in property to help ensure it can balance its budget.

Richard Cohen, deputy chief executive, said: "It is frustrating that we haven't nailed down the first purchase, but it is not for want of trying and we have looked at around 20 options. Brexit has got in the way, but hopefully should see a surge and we are making advances."