28 May 2001


Sell out


Over the years Old Grumpy has had occasion to draw attention to the dubious methods employed by the County Council when disposing of land - most famously Yorke Street school in Milford Haven and the proposed sale of Scotchwell car park to McDonald's.

The law governing the sale of council-owned land is to be found in S 123(2) of the Local Government Act 1972 which imposes a duty on local authorities to sell for the "best consideration reasonably obtainable", though councils are allowed to accept a lower bid provided the Welsh Assembly gives its consent.

It has always been my view that "best consideration" means best price and that "reasonably obtainable" requires the local authority to bring the property to the attention of potential purchasers by advertising, or other marketing methods, before initiating a tender process to find the highest bidder.

But local authorities are not content to just to dispose of the land and let the new owner get on with it, they try to control matters from beyond the grave by restricting the use of the site to some particular purpose that they consider beneficial

That is what happened in the case of Scotchwell car park where the County Council rejected a £1 million bid from the supermarket chain Lidl in favour of an offer of £330,000 from McDonald's on the grounds that a drive-in restaurant would be better for jobs and the economy generally

It should be said that the council did resolve to refer this decision to the Welsh Office, but only after its heavy-handed attempts to pressurise Lidl into withdrawing from the bidding process had failed and Lidl had made it plain that it would be seeking legal redress if the council accepted McDonald's bid without reference to the Welsh Office.

In the event the Welsh Office Highways Directorate blocked the development of the site on road safety grounds, so the matter was never put to the test.

A recent judgment in the Administrative Court in the case of Lemon Land v Hackney London Borough Council has made the position absolutely clear.

In that case Hackney LBC sold land to the London Development Agency for commercial development despite a higher bid from Lemon Land who wished to develop the site for housing.

Hackney argued that the LDA's proposals were more beneficial economically and that this economic benefit could be taken into account when calculating "consideration".

Mr Justice Lightman was having no truck with that line of reasoning, stating quite clearly that: "The elements of consideration had to have a commercial or monetary value to the council",(my emphasis) and that any sale at a discount without the Secretary of State's approval was nothing more than "a disguised grant" to the purchaser.

But what happens if the council decides to negotiate with a favoured bidder to the exclusion of other interested parties?

Then, of course, there is no higher bid and no need to refer the matter.

That seems to have been the game plan with the sale of the Bath House in Neyland, though negotiations subsequently broke down and the property is now out to tender.

At this point I should declare an interest because I was one of the potential bidders for the Bath House.

This followed my attendance at a meeting of the Property Services committee on June 8 1999 when members decided to declare the Bath House surplus to requirements and to offer it for sale by "private treaty" . That same afternoon I rang the council and asked them to send me the details.

Someone must have made a note of this conversation because last Friday, two years, give or take a couple of weeks, after my initial enquiry, a large brown envelope containing the particulars and tender documents appeared on the doormat.

Not that the council have been inactive in the meantime. My moles tell me that the council had taken the property off the market and were negotiating with a preferred bidder with a view to it being developed for the purposes of job creation, though I can find no record of the committee approving this change of policy.

A few weeks ago, I read in the Western Telegraph that talks with this unnamed job-creator had broken down and the site was being put back on the market - hence the large brown envelope.

But what if the negotiations had reached a successful conclusion?

Well, by now the committee would have received a report telling them that agreement had been reached "to sell the site to XYZ for a sum of money[unspecified]which the officers consider to be full market value", or some such form of words, followed by a recommendation to sell, which the members would have waved through despite the fact that, unless they are telepathic, they could have no idea what I or any other interested party was prepared to offer for the site.

It is time our elected representatives took a grip and made sure that all sales of taxpayers' property are subject to an open, competitive tendering process.

Not that there's much hope of that because the officers run the council as their own private fiefdom with the councillors, who cost us £500,000 a year in expenses and allowances, nothing more than an expensive method of giving a democratic gloss to the proceedings.

The sleuths

Last week I spotted an advert in the local press for a firm of private detectives/bailiffs- EMF Services Ltd - in Pembroke Dock.

Having some prior intelligence on the matter, I decided to check with Companies' House where, sure enough, I discovered that the directors of the company are none other that my old chum Cllr Brian Hall and his side-kick Malcolm Calver.

My moles tell me that there are strong rumours doing the rounds in the south of the county that Mr Calver is about to throw his hat in the ring for the bye-election for the vacant seat at East Williamston.

Should he be sucessful, anybody in County Hall considering a bit of hanky-panky would be well advised to be discreet because I notice that among the services offered by these two budding Clouseaus is Private Investigators - Matrimonial.

On a more serious note, Old Grumpy sees the possibility of a serious conflict of interest between the role of private detective and councillor.

After all, councillors have access to a large amount of private and personal information in their role of elected representative.

Whether they should be exposed to the temptation to use that information for their own purposes is a moot point

Hard pounding

The Euro debate is hotting up with Tony Blair telling the Financial Times that he is confident of persuading the British people to vote in favour in a referendum once he and Gordon Brown decide that the five economic tests have been met.

That sounds like hubris to me.

Once the referendum campaign is underway some awkward issues will emerge which the pro-euro camp will find hard to deal with.

Already in this election, when the euro has been something of a side issue, supporters of the single currency have been reduced to incoherent spluttering when their case has closely examined.

That case, in short, is that the strong pound/weak euro is hurting exporters and costing jobs and our failure to join up to the single currency is deterring inward investors.

But when confronted by the facts these arguments are exposed as pure propaganda.

Fact 1.Average unemployment in euroland is close to 9% compared to the UK's 5%. Indeed Mr Brown is constantly telling us that unemployment in the UK is at its lowest for 30 years.

Fact 2. Despite being outside the eurozone, inward investment into Britain is at an all-time high with more overseas money being invested here than any other two European countries put together.

Fact 3. If we went into the euro tomorrow we would be locked into the strong pound/weak euro straitjacket forever. So, some way has to be found to engineer a 10-20% devaluation in the pound before entry if we are not to be at a permanent competetive disadvantage. Nobody has yet told us how this is to be achieved. Indeed it is hard to see how such a devaluation is possible given that one of the conditions we would have to fulfill before being allowed to join is a stable pound/euro exchange rate for the two years leading up to entry.

Even the silver-tongued Mr Blair will be hard pressed to convince us that the exchange rate is both falling and stable at one and the same time.


Back to home page