Following the Scrutiny Committee meeting on 8 February the senior officers have backed down on keeping the initial list of assets for disposal a secret from the public. In my submission to the meeting I argued the importance of openness if residents are to believe the promises and the Council can have the support of residents over the next three years. Congratulations to those Councillors arguing for open and transparency as at the Scrutiny Committee. Let’s hope that this increased openness is an early sign of the much needed cultural change that the Labour leadership recognises needs to take place.
Having been reviewed by Scrutiny the Asset Disposal Strategy is being considered by the Cabinet on 18 February. It seems to me that the officers’ report is flawed in relation to how the disposal strategy could help achieve aspects of Council policy rather than simply a quick fire sale, which may have economic and social ill-effects.
It is not too late to agree amendments based on a different way on looking at the legal requirements on disposal.
Para 5.1 of the report states: ‘The disposal of any Council owned asset is subject to achieving “Best Consideration” either in line with s123 of the Local Government Act 1972 or s233 of the Town and Country Planning Act 1990 where land has previously been appropriated for planning purposes. There are exceptions where a disposal at less than best consideration can be permitted, where the variance does not exceed £2m if there are clear economic, social or environmental benefit in line with the terms of the General Disposal Consent (England) 2003 or otherwise where the Secretary of State has provided a specific consent on the basis of a Council request.’
This seems to suggest that Council assets fall into two categories
- Sites purchased for development which would require planning permission.
- Existing buildings.
If this is the case then undeveloped Brick By Brick sites may need to be treated in a different way than existing buildings. A tool kit on disposals in relation to community housing states:
- ‘Where any part of the land is held for planning purposes then the disposal regime is set out in the Town and Country Planning Act 1998 and the General Consent would not apply’
Judicial review decisions clarify some of the issues that need to be considered before the strategy is finalised.
Here is an extract from a Local Government Lawyer discussion on navigating section 123 and land disposal duties:
- ‘On a separate point, a council is able to sell a site for less than its market value, but it must seek statutory consent to do so. Specific consent is not needed where a council can demonstrate the land sale will help to secure the improvement of the economic, social or environmental wellbeing of the local area, and the undervalue is only up to £2m less than market value. These are the circumstances where socio and economic benefits can be relevant. The undervalue itself still needs to comply with “normal and prudent commercial practices, including obtaining the view of a professionally qualified valuer”.
‘In conclusion, through case law a couple of key points become clear regarding a council’s obligation to section 123 compliance. Firstly, the most important thing is the outcome, rather than the process. Secondly, monetary value is the best consideration in whatever the form, whether overage, upfront or deferred. However, social and economic benefits can justify a disposal at an undervalue, but only in certain circumstances.’
The Asset Disposal report does not discuss the possible application of the principles of Social Value.
‘The Public Services (Social Value Act) came into force on 31 January 2013. It requires people who commission public services to think about how they can also secure wider social, economic and environmental benefits.’
While this applies to Council’s procuring services, it may have relevance to ‘best consideration’ in helping to calculate the wider benefits from selling an asset to a community benefit or social enterprise organisation at less than full market price because it may secure economic and social benefits for the area, based on the principles of the Act as ‘a tool to help commissioners get more value for money out of procurement…. design better services, … (and find) new and innovative solutions to difficult problems.’
Community Asset Transfers
The report does not discuss the possible application of the Council’s policy on community asset transfers, the best known example of which has been Stanley Halls.
A toolkit explanation in relation to housing can be seen at:
Ideally if open market tendering is agreed as the way forward then no bids should be accepted from developers landowners and companies which:
(a) do not pay all their employees at least the minimum wage
(b) discourage trade unionism
(c) have been involved in schemes that have cladding and fire and safety problems
(d) have undertaken developments of former office and other buildings exempt from planning approval to conversion to flats where the floor spaces are below the minimum standards required if planning permission had been granted
(e) have land banks with planning approvals which have not been acted upon with the approved time period
(f) will not commit to giving money to resident controlled community organisations in the area in which the asset being sold is based.
While the Council lawyers will probably argue that this cannot be done, the justification would be to ensure best consideration and social value benefits from the sales.
Alternatively, where assets are sold at open market value the Council should allocate 10% of the proceeds to local organisations as a way of supporting community, economic and social benefit. This should be possible as it is simply a matter of budget decision making.
Croydon Park Hotel
The officers’ paper to Cabinet on the options for sale of Croydon Park Hotel is loaded in favour of private speculators. They rule out other options on what appear to be reasonable grounds: hotel, student accommodation, housing for asylum seekers and temporary housing for the homeless, and short term speculative hostel/budget hotel accommodation. The validity of the rejections of these options can only be assessed if the full detail of the evaluations were made public, enabling those residents with property and development expertise to analyse them.
‘The two specialist consultancy firms approach have both reported that they consider that despite the current economic situation, the asset should attract interest from a broad range of capital sources including hoteliers, residential developers, High Net Worth individuals (both from the UK and abroad), private equity and institutional investors. These buyers will be motivated by the scale of the asset, the fact it is to be sold with Vacant Possession and the residential development factor that is rare in this area of Croydon. The recovery of demand (occupancy) and room rates will take a number of years to recover to pre-pandemic levels. While the cashflows that can be derived from hotels are going to be supressed for a prolonged period, it is an attractive time to consider alternative uses. Given the location of the hotel, it clearly presents a significant opportunity for intensification of the large 1.54 acre site. Immediately surrounding schemes such as Altitude 25 and Pocket Living’s Addiscombe Road scheme are developed to in excess of 20 storeys.’
This clearly shows how the senior officers are obsessed with intensification despite the fact that this has economic and social consequences which may not be to the benefit of Croydonians. Such intensification may result in further demands for insfrastructure resources which are already underfunded.
Brick by Brick Sites
The following sites will no longer be developed by Brick by Brick.
Garages/Car Park: Tedder Road
Garages: Thorpe Close; (south) Redstart Close; (north) Comport Green; Calley Down Crescent; King Henry’s Drive/Gascoigne Road Flats; 9 & 18 Bramley Duppas Hill Terrace; Broom Gardens; Erica Gardens; Border Gardens ; Bramble Close; Fir Tree Gardens; Laurel Crescent; Kennelwood Crescent; Arkell Grove
Former Social Club: Tamworth Road
Infill: King Henry’s Drive; Bracken Avenue Land
Land: adjacent to Brickfields Meadow; Freelands Avenue; Heather Way; near Tudor Academy, Frimley Cresent; Bedwardine Road
Before disposal decisions are taken, there should be consultation with all the residents as to their views on which should happen to these sites. They may want to see:
- garages returned to (i) garage use, (ii) workspace for residents activities and businesses, or (iii) other community uses;
- garages redeveloped into housing that for example meets the re-housing needs of local residents such as smaller homes for the elderly releasing their larger homes for families;
- land and infill sites left as open space or developed as under(a)(ii) and (iii) or (b);
- Tamworth Rd returned to social club use or for (a)(ii) or (iii).
All of these options have positive community, economic and social benefits. Residents may want to support the creation of relevant community controlled community benefit or social enterprise organisations, or welcome the involvement of existing opens operating in Croydon.
Note: I am Chair of Norbury Community Land Trust
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