Agenda and minutes

The Chairman welcomed everyone to the meeting.

He reminded the Panel that their remit today was to consider the following two bullet points of the call-in notice;

• the decision to dispose of the asset at nearly half a million pounds below market value, and on a non-competitive basis, is contrary to the interests of Council Taxpayers in B&NES
• the case has not been made to justify the below market value disposal and so the asset should be listed on the open market, where it will fetch greater returns for the Council

He explained that any other aspects of Council company governance were not within the scope of the meeting.  The Chair further reminded the meeting that, whilst there were two decisions on the Council’s Forward Plan relating to 117 Newbridge Hill, only the one made by the Cabinet Member, Cllr Samuel, is to be scrutinised today.  The other decision taken by the Leader as Shareholder of a Council owned company, is outside the jurisdiction of this Panel. Michael Hewitt (Head of Legal & Democratic Services & Acting Monitoring Officer) confirmed this position.

At this point in the meeting declarations of interest are received from Members in any of the agenda items under consideration at the meeting. Members are asked to indicate:

(a) The agenda item number in which they have an interest to declare.

(b) The nature of their interest.

(c) Whether their interest is a disclosable pecuniary interest or an other interest,  (as defined in Part 2, A and B of the Code of Conduct and Rules for Registration of Interests)

Any Member who needs to clarify any matters relating to the declaration of interests is recommended to seek advice from the Council’s Monitoring Officeror a member of his staff before the meeting to expedite dealing with the item during the meeting.

The following statements were made by members of the public and Councillors.

Councillor Colin Blackburn addressed the Panel.  He made reference to the fact that, although this was a Conservative led call-in, it had support from across the groups.  This challenge expressed a fear that residents were being short changed.  He explained his concern that the valuation figure was too low and reported a much higher offer he was aware of from a local developer.  At a time when finances were so constrained, he considered this was unfair to residents and better value could be obtained. 

Councillor Andy Furse asked if the offer Councillor Blackburn had received had been in writing and including the conditions regarding HMOs and holiday lets, to which Councillor Blackburn responded that it had been.

Councillor Winston Duguid followed this up to check that the valuation had been on a 5-bedroom detached house rather than the market which might serve the RUH.  Councillor Blackburn replied that it was to re-develop into 6 apartments with a restriction against HMO or AirBnB type properties.

Bob Goodman addressed the Panel describing the concern, in his view, of commercial property irregularity.  He explained that Aequus has been set up to ensure empty properties went back into residential use, but now activity was going way beyond that.  He ran through some financial details which called this decision into question and proposed that this was only proceeding in this way to keep a failing development company going, at the expense of residents.  He asked this be referred to Council to look into his concerns, including the company arrangements, with independent advice to hand.

Councillor Karen Warrington asked Bob for his view on the return if sold for student and holiday lets, to which Bob responded that he had not addressed that in his statement.  It may well be the case that that would bring a higher return, but he recognised the social need and so had not made reference to that aspect.

Councillor Winston Duguid asked Bob is he was calling into question the competence of Knight Frank.  Bob responded that, if that was the valuation they had produced, then he did consider it should be independently reviewed.

Councillor Mark Elliott asked Bob if he believed Cabinet Members should follow advice given to them, such as from professional valuers.  Bob replied that the Cabinet Member should look at all the information available and if the Cabinet Member believes any advice is wrong, he should seek further advice.

David Stubbs addressed the Panel.  He explained his background as a retired Chartered Valuation surveyor.  He posited that the rationale behind the decision was flawed, as being justified by the imposition of voluntary conditions.  He explained that, in his experience, any developer would be prepared to pay at or close to the unconditional value reported by Knight Frank.  This transaction is predicated on the hope for future return, which is not enough, due to the element of risk.  He suggested this was taking place as  ...  view the full minutes text for item 68.

Councillor Vic Pritchard, as lead call-in Councillor, addressed the Panel.  He explained his view that there was no justification for this property to be sold at half a million pounds below the market value and it was irresponsible to do so.  His objection could be summarised in 3 areas;

·  The Council is only a temporary custodian of this public money and this asset belongs to the people so better value should be sought;

·  This was setting a dangerous precedent to forego the financial benefit now for the uncertainty of a gamble on future income;

·  Administrative mismanagement of the Council’s property company to justify this decision.

Councillor Pritchard concluded by asking the Panel to take this opportunity to reconsider this decision before it is too late.

Councillor Richard Samuel then addressed the Panel as decision maker and Cabinet Member for Resources.  He explained the recent history of this property and the decisions made by the previous Administration of the Council leading to their decision for its disposal to ADL at reduced value and creating a dividend.  On becoming involved as Cabinet Member, he sought a business case and the required independent valuation as the Council was seeking to impose voluntary conditions.  As Cabinet Member, Councillor Samuel explained that he could not ignore the independent professional advice received.  He added that this valuation process was as set out in the procedures established by the previous Administration.  Councillor Samuel concluded by rejecting the basis of the call-in and supported this decision which generated a dividend, rather than it being lost to the private sector.

Councillor Shaun Hughes made reference to the voluntary conditions and restrictive covenants and asked how watertight they were, with regard to future landlords and their ability to change them.  Councillor Samuel replied that they will be completely watertight, as they will be built into the covenants of sale.  He added, with regard to comments about the valuation, that he was not an expert and so must rely on qualified advice from experienced professionals, endorsed by statutory officers of the Council.  We should not be selective about only taking on board parts of advice that we like and ignore those parts we do not.

Councillor Winston Duguid made reference to the actual return to the Council being more than just the sale and asked Councillor Samuel to comment on that.  Councillor Samuel agreed that the figures in the round needed to be looked at including Council tax receipts over the next 20 years.  He explained there was also provision that ADL can retain an element of the profit so it can function as a company with working capital.  The total gains are in excess of the open market value of simple disposal as it is recycling funds into the Council’s finances to benefit residents.

Councillor Paul Myers asked if Councillor Samuel considered he had a right to question a valuation.  Councillor Samuel responded that he did query the figures on 2 occasions and, as a result of that query, more  ...  view the full minutes text for item 69.