Agenda item

Attached for consideration as part of the Call-in on this item, is the Part 2 Portfolio report considered as part of the decision made on the 5 February 2019.

The report should be read in conjunction with the Portfolio report attached at appendix 1 to the Call-in report on the Part 1 agenda.

(This document contains exempt information as defined in Paragraph 3 (information relating to the financial or business affairs of any particular person (including the authority holding that information) of Schedule 12A to the Local Government Act 1972 as amended).

Response to the reasons for Call-in.

Please see the Part 1 agenda.

The Committee received the information provided on the call-in report: Meridian Works Site One: Authority to sign key agreements to enable project delivery.

NOTED

1.    The information was considered in conjunction with the report on the part 1 agenda.

2.    Councillor Smith set out the reasons for calling in the decision:

•  The principle of why Building BloQs was selected for this project was questioned, and that there had not been a proper marketing process.

•  The proposal to charge the company a lower than market rent did not comply with the Council’s Property Procedure Rules. The report was not clear enough about the difference between market rent and the subsidised rent proposed; about mitigation of financial risk; or proposals regarding potential for recoup of funds.

•  There was insufficient information regarding the involvement of the Greater London Authority (GLA).

3.    The response of Councillor Caliskan, Leader of the Council. She highlighted the following:

•  The Meridian Water project was about jobs and industries as well as housing. The Meridian Works One project would nurture business in that area. Working with Building BloQs would bring in makers and creative entrepreneurs.

•  The partnership terms with the GLA were agreed, and this solid relationship should give confidence to the Council.

4.    Other issues highlighted by officers in support of the decision included:

•  This project was prompted by the opportunity to receive a GLA grant to boost the local economy and provide jobs.

•  As explained in the response, this was not a procurement, but was a property transaction.

•  It had been appropriate to work with Building BloQs when bidding for the funding so as to meet the grant deadline and to put forward a compelling bid.

•  The Council was supporting a local SME business by enabling its expansion at Meridian Water, and had been prudent in the structuring of the deal.

•  The company had been diligent in their approach, and the Council was reassured by the information provided by them.

•  Information was provided in respect of proposed rent to be charged as opposed to market rent.

•  Clarification was provided regarding the agreement with ACAVA. It was confirmed they were artist studio providers

5.    Members’ questions responded to by officers, including:

•  Confirmation of legal advice, and the financial monitoring requirements throughout the process.

•  Clarification of the terms and flexibility of the proposed lease.

•  Confirmation that the capital costs for Building BloQs were largely for machinery.

6.    The summing up by Councillor Smith that:

•  Concerns remained in respect of this proposal with regard to financial risk to the Council, and with the proposal to charge the company a lower than market rent.

•  Officers had advised that arrangements with ACAVA were not integral to entering the agreement with the GLA: this information had not been set out in the report.

•  A stage had been reached where there were no further options, and the trajectory of this project was not a wise one to enter into.

7.    The Leader, Councillor Caliskan advised that there was still an option to stop these agreements, and she would not want members to be under the impression they had no choice.

8.    Overview and Scrutiny Committee considered the reasons provided for the call-in and responses provided. Having considered the information provided, the Committee AGREED to confirm the original Portfolio decision.

Councillors Akpinar, Aramaz, Susan Erbil, and Needs voted in favour of the above decision. Councillors Laban and David-Sanders abstained. The original Portfolio decision was therefore agreed.

9.    The comment of Councillor Tolga Aramaz that most call-ins had not resulted in decisions being referred back to the decision-maker, often with unanimous or semi-unanimous agreement of Overview and Scrutiny Committee. He was concerned that the Opposition were reducing the Committee to a method of criticising Cabinet decisions rather than a neutral body to hold decision-makers to account.