010/2012: Approval to occupy the whole of Athena House, and take on the additional costs in respect of rates and utilities following CPS withdrawal from the facility – 19 December 2012

Executive Summary and recommendation:

Since 2005 Athena House has been jointly occupied by both the Crown Prosecution Service (CPS)and North Yorkshire Police (NYP). As part of the CPS’s plans to make efficiency savings and consolidate their Estate, it is their intention to move their staff out of Athena House with effect from early 2013.

CPS have indicated that they are content to continue to pay their share of the rental agreement, and allow NYP to occupy their lease accommodation. However, they wish that NYP pays for all of the other services charges associated with their occupation of the building as a whole.

The additional annual cost to NYP in respect of occupation of the whole of the building (once CPS have withdrawn) is estimated to be £134,621, and an estimated cost of up to £80,000 for provision of telephony.

Approved subject to:

1. Further information being submitted to the Commissioner detailing the exact plans for occupancy of the building including the use of the accommodation;
2. Further information being submitted the Commissioner detailing the IT requirements (including the required telephone equipment) and costs that may be incurred.

To be determined 19 December

Introduction and background

1. Athena House is a leased premises that is jointly occupied with the Crown Prosecution Service (CPS) located at Clifton Moor, York. The leased premises was acquired with Home Office funding and occupation commenced in 2005 on the basis of a 15 year lease with a break clause after 10 years (i.e. 2015). North Yorkshire Police (NYP) and CPS hold separate leases, but jointly occupy the property.
2. CPS have previously announced their intention not to renew any leases once they have reached a break clause. More recently they announced their intention to withdraw from their lease in Athena House.
3. The withdrawal of CPS from Athena House meant that NYP would be forced into taking action due to the fact that:
   1. Neither party wholly occupies the part of the building their lease referred to in their lease agreement
   2. The first floor premises (which form the NYP lease) are not currently separately secure and this is requirement for NYP facilities
   3. The technology provision is all currently located on the ground floor, which forms part of the CPS lease
4. CPS have indicated that they are content to continue to pay their share of the rental agreement based on a previously agreed ratio. They have also indicated that they would be happy for NYP to occupy the whole of the building, up to November 2014 when they would be seeking to have back the first floor in order to undertake the necessary dilapidations and ensure a clean break from the lease at the break point.
5. CPS have asked that in exchange for them continuing to pay their share of the rent, and allowing NYP to occupy the whole space up to November 2014 that NYP pay for all service charges and utilities that are incurred as part of their occupation of the whole of the building.

Matters for consideration

It is considered that this is a fair and equitable arrangement and provides NYP with Best Value moving forward, as estimates indicate that it would cost more to make the necessary adjustments to secure and occupy the ground floor than to occupy the building as a whole and pay all of the service charges and utility bills associated with an NYP sole occupation. A report progressed to North Yorkshire Police Authority on 24th September 2012 provided detailed costings in this respect.

There is also potential for additional costs for the provision of telephony, as the current telephony system is provided by the CPS, who have indicated that they will be removing it. Initial estimates indicate that the cost of telephony provision could be as high as £80,000.

Other options considered, if any

There are two other potential options, neither of which would provide the best use of resource and finances. These are:

• Undertake works to consolidate NYP occupation into the first floor. This would require moving the technology provision from its current ground floor location, re-wiring of the first floor to support a server room, provision of access security as a minimum. The costs of the works is in excess of the cost of the proposed option above, and it would highly disruptive to the workforce in this facility.
• Move the NYP occupant to alternative office accommodation. There is no accommodation within the current NYP estate that could house the team. This means that there would be a requirement to lease a facility, and incur significant costs in respect of connectivity and accommodation moves. Additionally NYP would be liable for a substantial penalty payment should it with to withdraw from the property/lease in advance of the break clause.

Background information is available demonstrating the prohibitive cost of either option above (NYPA paper of 24th September 2012 refers).

Contribution to Police and Crime Plan outcomes

This proposal ensures the organisation effectively manages resources and assets and achieves Best Value as a result of the enforced change following CPS withdrawal from Athena House.

Consultations carried out

Public consultation has not been carried out by NYP in respect of the proposed continued occupation of Athena House.

Financial Implications/Value for money

The additional annual cost to NYP in respect of occupation of the whole of the building (once CPS have withdrawn) is estimated to be £134,621. This will be for a two year period up to the break clause point.

The funding for this expenditure can be met from £600k Capital identified for works to secure Athena House, that has now been removed from the Capital Programme.

Legal Implications

The head lease between the landlord and CPS is likely to be similar to the separate head lease with NYP which includes an alienation clause giving conditions for any sub letting which will have to be complied with before any agreement can be made. Relevant permissions from the landlord will have to be sought and recorded in an appropriate written agreement.

Equality Implications

There are no equality or diversity implications resulting from the disposal of this property asset.