To consider approval to increase the pitch fee and determine early/late/other fees at Kingfisher Caravan Park from 1 January 2023.

That the following be approved:

1.       To increase rents (and use and occupation damages) at Kingfisher Caravan Park by 5.8% for the period 1 January 2023 to 31 December 2023.  5.8% represents 50% of latest RPI monthly figure published by the Office for National Statistics at the juncture this paper was published (May 2021 – May 2022).

2.       Where a licensee has no other outstanding debit on their account, the application of an early payment discount of £150 in respect of all pitch fees billed to licensees in January 2023 if paid in full by 31 January 2023,

3.       The application of a £150 late payment fee in respect of all pitch fees billed to licensees in January 2023 but not paid in full by 1 March 2023,

4.       Where a licensee has no other outstanding debit on their account, direct debit options will be offered but with no discount to the annual charge, and,

5.       Where the Council levies ‘use and occupation damages’ against an occupier (ie where no formal licence has been entered into), no discounts will be available, direct debit payment options will not be offered, but the late payment fee will apply.

A report was presented to enable consideration of the approval of an annual pitch fee increase and determination of early/late/other fees at Kingfisher Caravan Park from 1 January 2023.

It was noted that the licence agreements in place at Kingfisher Caravan Park provided for an annual review of pitch fees by giving one months’ notice of a change in advance of the annual review date of 1 October each year.  Notice to change the pitch fee for the period 1 January 2023 to 31 December 2023 must be sent to existing licensees by no later than 23 August 2022.

It was recommended that 50% of latest figure for the Retail Prices All Items Index available at the time of publication of this report, 5.8% (rounded), be applied to current licence fees in accordance with these requirements as well as being applied to use and occupation damages.  The latest figure of the Index, published on 22 June 2022 for May 2022 marked an 11.66% increase above the index since May 2021.

In addition, it was recommended that the early payment discount introduced by the Council in 2019 be continued and set at £150 for pitch fees to licensees invoiced for 2023 and paid in full before 31 January 2023; and that a late payment fee of £150 be applied to any invoice issued in January 2023 and not paid in full by 1 March 2023. Early payment discounts would not apply to use and occupation damages.

The Portfolio Holder for Planning supported the recommendations but asked if consideration could be given to the way such operational decisions were taken in future.  The Portfolio Holder for Finance advised he was happy have an informal discussion at an appropriate Executive Board Briefing meeting.

During further discussion it was queried if the recommendation to increase rents by 5.8% for the period 1 January 2023 to 31 December 2023 effectively meant a reduction in net income based on the current Retail Price Index.  The Assistant Director, General Fund Assets explained that the pitch fees covered a set of costs for the Local Authority, licensees were billed separately for electricity and water supplies. Therefore, the expectation was that the council’s costs would be contained within the 5.8% increase.

RESOLVED

That the following be approved:

1.         To increase rents (and use and occupation damages) at Kingfisher Caravan Park by 5.8% for the period 1 January 2023 to 31 December 2023.  5.8% represented 50% of latest RPI monthly figure published by the Office for National Statistics at the juncture this paper was published (May 2021 – May 2022).

2.         Where a licensee has no other outstanding debit on their account, the application of an early payment discount of £150 in respect of all pitch fees billed to licensees in January 2023 if paid in full by 31 January 2023,

3.         The application of a £150 late payment fee in respect of all pitch fees billed to licensees in January 2023 but not paid in full by 1 March 2023,

4.         Where a licensee has no other outstanding debit on their account, direct debit options will be offered but with no discount to the annual charge, and,

5.         Where the Council levies ‘use and occupation damages’ against an occupier (ie where no formal licence has been entered into), no discounts will be available, direct debit payment options will not be offered, but the late payment fee will apply.

Reasons:

As a key measure of consumer inflation, using the All Items Retail Prices Index as a basis for uplift is reasonable and proportionate as RPI increases are often the minimum increases applied to the Council’s own costs. 

An early payment discount model was agreed by the Executive in 2019, continuing such an offer, and not applying the full RPI increase demonstrates how much the Council values its loyal licensee customers.

Other options:

1 – Apply the full RPI increase of 11.66% - not recommended as an 11.66% uplift could really affect how affordable and viable it remains for some of the Council’s loyal customers to stay on Park.

2 - Use another consumer based index as the basis for increase – not recommended as Council cost increases are often based on RPI and RPI has been the base of previous increases.

3 – Do not apply an increase – not recommended as Council costs will increase.

4 – Do not offer an early payment discount against invoices raised in January 2023 and paid in full by 31 January 2022 – not recommended as withdrawing such an offer will affect the goodwill enjoyed with our licensees.

5 – Do not apply a late payment fee – not recommended, such penalties are commonplace within the industry.