Doncaster Sheffield Airport: Council failed to budget for £60m due to Peel under 'punitive' clause
Council officials attempting to reopen Doncaster Sheffield Airport failed to budget for at least £60m of costs being owed to landowner Peel under a ‘punitive’ lease clause they had signed up to, it has been revealed.
Details have come to light after it was announced this week that South Yorkshire Mayoral Combined Authority (SYMCA), headed by Mayor Oliver Coppard, is to purchase the DSA site from Peel – superseding the previous reopening plan which involved City of Doncaster Council (CDC) leasing the airport from the company.
SYMCA had agreed in September 2025 to release £160m towards the original plan, but with the caveat that a series of changes were made to the lease.
A leak of the lease earlier this year revealed it included a ‘turnover rent’ clause entitling Peel to 20 per cent of future airport revenues above annual base rent payments, including taxpayer-funded grants. The clause also applied to other income streams such as car parking revenue, landing fees and money from airport operators.
However, financial modelling for the council’s business case had assumed no turnover rent would be paid and CDC chief executive Damian Allen told The Yorkshire Post in March that “the reality is the practicalities of that turnover rent clause aren’t going to happen”.
But new SYMCA board papers confirm the new purchase plan follows the failure of talks designed to exempt its money from being affected by the clause – and also set out that it had been set to result in around £60m of unbudgeted costs, even after proposed restucturing of how it worked and delays to implementation.
The report states: “Turnover rent clauses were also considered to be punitive, with the costs that would be expected to be incurred not included within the business case received by the MCA.”
It added that it had not been possible to agree to changes to the turnover rent clause with Peel, despite the company being willing to make some changes.
It said: “Whilst Peel agreed to change the structure of the clause and defer its implementation, it would still have led to a c.£60m cost that had not been reflected in the financial model over the 30-year appraisal period and whilst this was forecast to be affordable for the first 10 years, the cost would continue to escalate over the remaining term of the lease.
"As such, this proposed structure did not satisfy the conditions the MCA had set and accordingly funding could not be released.”
The board paper also reveals that SYMCA is to take greater control of the reopening project in a variety of ways, including taking a controlling interest in FlyDoncaster, the council-owned company which has been established to run the airport.
Speaking on Monday at a press conference to announce the purchase plan that took place shortly before the board papers were released, Mr Coppard made an unprompted defence of the lease deal which was signed by CDC in March 2024.
He said: “The lease deal was a good deal at the time. Doncaster Council, Ros Jones, did a brilliant job of getting to that point so swiftly. But things have changed and now this opportunity has arisen and we have grabbed that with both hands. This is the best deal we could have hoped for and I’m really pleased to be able to take this next step.”
Mayor of Doncaster Ros Jones added: “Let’s be honest, had we not got that lease deal, we wouldn’t be all sat here now actually going forward seeking to purchase the whole of the land to drive all the economies of South Yorkshire forward.”
When asked about Mr Allen’s past comments and if the council now accepted the turnover rent clause was going to result in additional costs, a CDC spokesperson said: “City of Doncaster Council’s Cabinet will meet next week to discuss the airport proposals, which will address the change in approach and how it relates to the council.
"It should be pointed out that securing the lease was the only option at the time to save Doncaster Sheffield Airport and any comments were made contemporarily, reflecting the operating forecasts and the situation. This new position of buying the freehold is a huge positive and only available due to the existence of the original lease.”
A SYMCA spokesperson said: “The proposal to purchase the freehold of the airport and surrounding Innovation Quarter employment land will deliver material value to the public purse and put a key growth opportunity site into public ownership.
“As would be expected in any legally complex project there have been different interpretations over time on the turnover rent clause, its applicability, and associated implications for the financial model. Independent professional advice was taken on the lease, and an agreement was reached on the need for its removal at the SYMCA meeting in September 2025.
“Given the scale and significance of the project, a South Yorkshire-wide commitment through the MCA is now being made to ensure its success. SYMCA and the City of Doncaster Council will work together through Fly Doncaster to reopen the airport and maximise the economic potential to communities across South Yorkshire.”