Agenda item

Councillors Adrian Abbs and Tony Vickers declared a personal interest in Agenda Item 6 by virtue of the fact that York House was within their ward. As their interest was personal and not prejudicial or a disclosable pecuniary interest, they determined to remain to take part in the debate and vote on the matter.

The Commission accepted a call-in request submitted on 10 November to review the Executive’s decision (EX4279) of 3 November 2022 concerning the freehold disposal of York House (Agenda Item 6). The call-in request had been submitted in accordance with Sections 5.3 and 6.4 of the Council’s Constitution.

It was noted that provision had been made for a Part II discussion, but since the information was already in the public domain, this was considered unnecessary.

Joseph Holmes was invited to provide an overview of the proposed course of action in relation to the disposal of the freehold of York House:

·         The report identified alternative uses for York House that had been considered and rejected by a range of service areas over an extended period of time.

·         It was noted that any proposal would be require an appropriate business case.

·         Given the lack of any firm proposals, the Executive had agreed to proceed with the disposal of the property.

Members who had submitted the call-in were invited to present their reasons and proposed alternative course of action. The following points were made:

·         Members of Executive and OSMC had not undertaken a site visit to see the property – as a result, everything in the report had to be taken at face value.

·         The property could potentially be used as accommodation for young care leavers and a local charity was looking for a property for this purpose. Members asked if this use had been considered.

·         There was insufficient evidence in the report to provide assurance that all possible uses had been considered. Members had hoped this information would be provided in response to the call-in. It was assumed that the Executive would have seen this information, but if not, they would have had to make the decision on the basis of insufficient information.

·         Both Members and the public needed to understand how the Executive came to the decision, and if all options had been considered. It was suggested that the report should have included a table of pros and cons for each option.

·         The Education Service had expressed interest in using the property for a SEND Unit, but a business case had not yet been drafted. It was suggested that the disposal be paused to allow the business case to be developed and considered.

·         Members challenged whether this was the right time to sell the property, since the property market was falling and there was a reduced chance of a quick sale at a high value.

·         It was asked whether additional investment could be made to improve the value of the property. Also, Members wanted to know why the property had been allowed to deteriorate.

·         It was noted that the property valuation of £700,000 was less than the much smaller property next-door.

OSMC Members were invited to comment and made the following points:

·         It was noted that various options had been considered 4-5 years ago, but the market had since changed.

·         The £700,000 valuation was as a development plot, and although the joint venture company had considered the site to be too small, Members thought it likely that the site would be bought and redeveloped to create a much higher value property.

·         It was suggested that OSMC should consider the property in its current state and the issue of whether maintenance should be carried out should not be a matter for consideration.

Officers responded to the points raised as follows:

·         The building had been empty for a long period of time and the Council faced significant financial challenges.

·         It was not known whether Executive Members had visited the site. However, two Executive Members were on the Asset Management Group, which had considered alternative uses for the site.

·         Various alternative uses had been considered and rejected.

·         Officers were aware of the proposal to use it for young care leavers’ accommodation, but no business case had been presented.

·         It had been used briefly during the Covid pandemic by the Housing Team as an interim touchpoint for the Homelessness Service, and had been considered and rejected for use as a homelessness hub.

·         Both the Joint Venture Company and Adult Social Care had rejected the site on the grounds of size.

·         A tender had been put out for registered providers to utilise the site within the last year, but no interest was received.

·         There had been interest in the site from the SEND Team, but no business case had been produced.

·         There had been external interest from the Clinical Commissioning Group, which had subsequently been withdrawn.

·         It was important to get best value from Council assets - having explored alternative options, selling the property was considered the best option.

·         Increased borrowing costs meant that the value of a capital receipt to the Council had gone up by 50% in the last year.

·         It was accepted that the residential housing market was cooling, but the benefit to the Council of selling now would outweigh any potential reduction in the sale price.

·         It was accepted that the property may not have been maintained to the same standard as when last in permanent use in 2017.

·         It was not considered worth investing in the asset, since the end use of the property was unknown.

·         £700,000 was considered to be the minimum price set at auction and the market would determine the ultimate sale price.

During the debate, the following points were discussed:

·         A question was asked as to whether formal reports were available that documented: discussions with potential end users, the extent to which options were explored, and the reasons as to why the site was considered unsuitable for the proposed uses.

·         It was acknowledged that refurbishment of the property would require additional borrowing and the value of capital receipts was recognised, given the Council’s current financial position, particularly if interest rates continued to rise.

·         Since the property was not ready to live in, there was no point in refurbishing / decorating it.

·         It was difficult to judge the right time to proceed with a sale.

·         Putting the property on the market may force proposals that were on the back-burner to be brought forward.

·         The call-in appeared to hinge around the assertion that the Executive had been given insufficient information to be able to make a proper decision. Summaries of previous proposals were provided in the report, but detail was absent, so key questions were around: how much trust the Executive put in the Property Team, and whether the Executive asked sufficient questions at the meeting.

·         Officers could not recall if there was much debate on the item. However, it was noted that most of the work was done in advance, which meant that there were few questions at meetings.

·         It was queried whether it could be considered ‘best value’ to work with a charitable partner who could make use of the property and lever in additional funding to deliver Council objectives rather than receive the best price at auction. Officers highlighted the Council’s Social Value Policy, which was considered in procurement decisions in reaching a decision about which proposal offered best value.

·         Members asked if putting the property on the market would preclude services from coming forward with new proposals. Officers confirmed that putting the property on the market would allow other organisations to engage with the Council and bid for the property who may not currently be aware of it. Council services would not be precluded from coming forward with suggestions, but the point was reiterated that the property had been available for some time, with no suitable business case identified.

·         Officers were asked why the property had not been maintained to the extent that it was no longer habitable and refurbishment costs were now excessive. The Chairman stressed that this was not relevant to OSMC’s decision and Members needed to consider the property in its current state. If Members wished to look at whether the Council was adequately maintaining its assets, that would have to be considered separately.

·         It was suggested that there were other ways in which the Council could have asked the market to identify alternative uses for the site.

·         Members noted that if the sale was to be conducted by auction, which would limit the time available for proposals to come forward. However, officers stressed that the decision about the disposal mechanism had not yet been taken.

·         It was highlighted that all of the Council’s temporary accommodation was full and a large number of families and individuals were being put up in hotels. It was suggested that savings could be delivered in excess of the £10,000 annual maintenance costs if York House was to be used for this purpose.

·         The point was repeated about the lack of supporting information in the Executive report and it was suggested that information previously considered by the Asset Management Group should have been provided to OSMC in a Part II paper.

·         Officers were challenged about the time required to produce a business case for the SEND proposal and Members asked if services had been given clear timescales for developing proposals. Officers noted that there had previously been multiple deadlines given, and each time, proposals were submitted at the last minute, which subsequently came to nothing.

·         It was suggested that the report should be referred back to Executive for them to confirm why they considered the decision to be sound. Members recalled that there had been no questions at Executive around process, and so Executive had not demonstrated to the rest of the Council that the correct decision had been taken.

·         It was highlighted that rigorous interrogation was not undertaken at Executive, but instead this was done at Asset Management Board and in discussions with the relevant Portfolio Holder. Therefore the call-in could be considered to be challenging the basis of how the Executive worked.

·         Members who submitted the call-in felt that evidence missing from the Executive report should have been provided to OSMC so it could be reviewed this in public. However, it was highlighted that the matter was the subject of a call-in rather than scrutiny, and that commercial information would have to be considered in a Part II debate, which would not put the information in the public domain.

·         It was suggested that additional information should be provided within all reports to Executive to show that issues had been fully considered rather than relying on the opinion of officers.

The motion to refer the matter back to Executive for further consideration was proposed by Councillor Jeff Brooks and seconded by Councillor Tony Vickers.

An indicative vote was taken, including Members attending remotely. This showed that the majority of Members supported the motion.

At the formal vote, the motion was rejected. 

RESOLVED that the disposal of the freehold for York House would be implemented as set out in the report to Executive on 3 November 2022.