Doncaster Sheffield Airport: Council liable for rent underpayment penalties under ‘any time’ audit agreement with landowner Peel

The council signed a 125-year lease for the site in March 2024 with Peel, following the company closing the airport in November 2022 after years of financial losses.

The council had hoped to secure a private operator to reopen the airport but was unable to find one – in part due to the “complex lease structure”. It is now progressing £193m plans to reopen the airport via a council-owned company called FlyDoncaster.

The lease document was leaked to The Yorkshire Post last week, with the lease revealing it contains an agreement that 20 per cent of turnover from DSA is due to be paid to Peel – including any government grants.

Efforts are currently taking place to renegotiate some terms of the lease before the reopening project moves forward.

The current wording stipulates that the council records need to be made available for inspection “upon reasonable advance written request at any time by the landlord, its accountants or authorised agents”.

It said Peel can arrange for the records to be audited by a professionally-qualified independent auditor or accountant of its choosing and that if an underpayment is revealed, the council will have 30 days to make payment.

The figure will include not only the underpayment but also interest and the full cost of the audit commissioned by the landlord.

The arrangement appears to contrast with previous discussions about public sector officials seeing the accounts of Peel when it was seeking taxpayer support towards its running of Doncaster Sheffield Airport.

It was reported in July 2022 that talks around a £20m loan of taxpayers’ money to Peel prior to the closure had stalled because the company was unwilling to show its accounts to public sector officials.

South Yorkshire’s Mayoral Combined Authority (SYMCA) had already made loans of £3.5m and £5m to the airport and had been working on an agreement for a further £20m loan in early 2022.

However, the deal did not happen. After Peel announced in summer 2022 it was considering closing the airport, an unnamed public sector source told The Yorkshire Post said the loan deal had stalled because “they didn’t want to show us their accounts”.

Peel did not wish to comment. Doncaster Council did not respond to request for comment.

In a wider statement about the lease agreement last week, Mayor of Doncaster Ros Jones said an offer to buy the airport freehold had been refused by Peel and the company’s offer of a lease “effectively killed off” the chance of a successful compulsory purchase of the site.

She said: “In March 2024, after over a year of detailed and complex negotiations, we signed the lease for Doncaster Sheffield Airport. The reality is that when you negotiate a commercial deal, not everyone gets what they want, and this deal is no different.

“We were faced with a stark decision, to accept the negotiated lease that had gone through all the necessary legal and financial checks or to see the airspace dismantled, demolition of assets on the site and accept that the airport would never reopen.

“My priority is to deliver an airport that delivers the jobs, growth, investment and opportunities that we all know DSA can provide.”