From: Anthony Pick
Sent: 28 January 2019 09:06
To: Jason Braidwood
Cc: Mike Johnston <Mike.Johnston@westberks.gov.uk>
Subject: LRIE
Dear Jason.
Thank you for your email, which I will respond to by briefly laying out the facts of the case.
The redevelopment of the London Road Industrial Estate (LRIE) is one of the strategic objectives of West Berkshire Council’s Newbury Vision 2026 document http://info.westberks.gov.uk/CHttpHandler.ashx?id=38360 , originally prepared in 2003 and subsequently updated. Its purpose is to rejuvenate the LRIE with a comprehensive plan for new commercial premises and residential developments. It will add to the area’s commercial value by many tens of millions of pounds and will provide an attractive new gateway to Newbury. The Newbury Vision 2026 has been the framework document for other major developments, such as Park Way, the Vue Cinema, the Museum refurbishment, and the Market Street development. The Council owns most of the freehold of the LRIE estate.
For such an ambitious objective, West Berkshire Council needs a development partner, and in 2015 selected St Modwen. The tendering process under which it did so was one which the Council’s legal officers believed at the time to be legally correct. The recommendation in favour of the deal with St Modwen was made by a cross-party group and had the support of the Council’s Liberal Democrat Group.
This development agreement was, however, challenged legally by one of the leaseholders of the LRIE, Faraday Developments Ltd (FDL). The High Court found for the Council, but on appeal the Appeal Court ruled in favour of FDL. The reason for the judgement was a new principle of tendering law which was not apparent until the Appeal Court ruling was given, and which changes the procurement rules for all Councils. The Appeal Court confirmed that the Council had not been at fault and had acted in good faith. However, the contract with St Modwen was declared void and the Council was instructed to re-tender for the partnership agreement. FDL claimed damages and was awarded £1. The full legal decision can be found at http://www.bailii.org/ew/cases/EWCA/Civ/2018/2532.html and a legal analysis by a Trowers and Hamlins partner can be found at http://www.room151.co.uk/blogs/west-berkshire-ruling-complicates-development-schemes/
The Council saw no advantage in appealing further to the Supreme Court, as that might have incurred substantial additional costs and delayed the LRIE project by at least a further 18 months. However, given the importance and value of the LRIE development, the Council had been absolutely correct in defending its position, which it had thought was lawful, until a legal decision had been taken.
The Council has competent legal officers who are studying the Appeal Court decision carefully. Future tenders for the development partnership for the LRIE will be invited in accordance with that decision. Given the fullness of the ruling by the Appeal Court, and its exoneration of the Council of any wrongdoing, the demand for an independent review of the St Modwen agreement would serve no useful purpose. It would cost further sums of public money without adding any additional information, and delay the LRIE redevelopment still further.
I hope that this summary addresses your concerns.
Yours sincerely,
Cllr Anthony Pick
Ward Councillor, St John’s
