To ask the Secretary of State for Housing, Communities and Local Government, what estimate he has made of the difference for his Department's rental projections for the Burlington House Societies (a) as forecast in 2005 and (b) latest figures available; and if he will make a statement.
18 March 2021
Five Learned Societies are tenants of New Burlington House, owned by the Department. Following a High Court settlement, all parties agreed in 2005 that rent would increase to market levels over a period of 80 years. The rent is at a limited rate to reflect the fact that the land is being used for cultural and educational purposes. The Department and the Learned Societies agreed in 2019 that the market rental value of the land was £50 per square foot but the Learned Societies are currently paying only £15.35 per square foot.
The rents charged are in accordance with the Learned Societies’ leases. The rents are calculated annually by way of a valuation that is based on evidenced market transactions and have followed growth of market rent since 2005. Rents can therefore rise and fall. The Department does not currently hold a forecast of rental projections from 2005. Rents based on the current lease are updated each year following valuation.
The Department is sympathetic to the Societies’ position and is exploring whether there is a solution that can deliver value for taxpayers and help the Learned Societies to remain at New Burlington House and an assessment of value will be made as part of an agreement. The Department has been discussing options with the Learned Societies and DCMS given their responsibility for policy in regards to culture, museums and heritage.