Doncaster Sheffield Airport: £160m funding won't be released until controversial lease is changed
The release of £160m of taxpayer funding to reopen Doncaster Sheffield Airport will not happen unless the terms of a controversial lease for the site are changed – with a deal yet to be agreed, The Yorkshire Post can reveal.
Talks have been taking place about renegotiating key elements of a 125-year lease for use of the site between City of Doncaster Council (CDC) and land owner Peel as a condition of the office of South Yorkshire mayor Oliver Coppard releasing the funding.
A leak of the existing lease to this newspaper reveals that the current agreement, signed by CDC and Peel in March 2024, includes 20 per cent of the airport’s future annual turnover - including taxpayer-funded grants - being paid to Peel.
It also shows that break clauses could be triggered unless passenger numbers well above even the most optimistic forecasts for what the reopened site will achieve are delivered.
In September, Mr Coppard’s South Yorkshire Mayoral Combined Authority (SYMCA) agreed to provide £159.5m worth of funding to CDC to allow it to reopen the airport via a council-owned company called FlyDoncaster. Most of the money is Doncaster’s share of Government devolution funding to 2050.
The planned release of the funding included a condition that a number of clauses within the lease were changed, with a SYMCA board paper at the time stating an “in-principle agreement” had been reached with Peel.
However, The Yorkshire Post now understands that the “in-principle agreement” related to which areas of the lease could be subject to renegotiation rather than any confirmed changes to the current terms. Talks on potential changes are now ongoing, with no deal currently in place.
A SYMCA spokesman said there has been “positive progress” but confirmed funding will not be released until lease changes are made. A CDC spokesperson said “conversations with Peel are ongoing”. Peel did not wish to comment.
Details of the precise terms of the lease have been kept confidential before the document was leaked to The Yorkshire Post this week.
But SYMCA said in September that it had asked the council to renegotiate the lease because of concerns about the break clauses “in the favour of the landowner” on passenger numbers and freight traffic, while in November a council report revealed that other lease changes under discussion included “clarifying points in relation to turnover rent”.
A SYMCA spokesperson said today: “SYMCA has worked with City of Doncaster Council (CDC) since the closure of DSA to bring an airport back to South Yorkshire to deliver jobs and opportunities to our communities.
“In September last year conditional approval of £159.52m was given to support the reopening of the airport. As was made clear in reports that went to September’s SYMCA board, the release of this funding is subject to meeting conditions designed to mitigate the risks highlighted in those board reports, including those related to the superior headlease.
“Work to meet these conditions has continued since, with positive progress made. Satisfactory completion of them remains a condition of funding being released.
“We continue to work with CDC to deliver the benefits a re‑opened DSA can deliver for communities across South Yorkshire.”
A CDC spokesperson said: “Whilst we are not going to debate the contents of a confidential lease in the public domain as these matters are commercially confidential, we do need to point out that negotiating a lease is not restricted to a single point in time. Leases are subject to changes over time whilst negotiations take place and therefore do change. Our conversations with Peel are ongoing.
“The comprehensive report to the South Yorkshire Mayoral Combined Authority in September last year, which approved financial support for the airport, underlined the span of significant due diligence that was undertaken on a range of areas including review of the lease and statistical elements of an airport operation such as passenger numbers and freight volumes accordingly.
“CDC’s work continues to successfully reopen the airport and our focus is on making sure we have all the essential elements in place as quickly as possible.”