Agenda item

This report seeks approval for the use of up to £50,000 from the Investment Advisory Board Reserve to commission the Council’s external property advisors, Montagu Evans, to undertake a detailed options appraisal of the Broadwater Golf Course site.  A draw down of the reserve is also sought to cover legal fees which were incurred in obtaining the site back for the Council of some £20,000.        

Recommendation

It is recommended that the Executive approves the use of the Investment Advisory Board Reserve to fund the options appraisal on the site at a cost of £50,000 and the legal fees incurred of £20,000.

10.1     Cllr Mark Merryweather briefly introduced the report which requested a budget of £50,000 to commission and detailed options appraisal from the Council’s external advisors for the Broadwater Park golf course, and £20,000 for legal fees to obtain the site back from the lessee. The site had not been operational as a golf course for over 18 months. There were constraints on what could be said publicly about the detailed outcome of the lease renewal process that had led to the current position, although local Members had been briefed as far as was possible. The land use designations had been referred to in the response to the public questions, and the council had a duty to seek value for money from this public asset.

Six Members had registered to speak on this item:

10.2     Cllr Julia Potts advised that her concerns were about the process by which the Executive had come to the decision before it this evening. The previous administration had agreed on 4 December 2018, subject to the usual legal caveats to grant a new lease to Broadwater Park Golf Course. Cllr Potts asked why that decision of the Executive, which had been noted by Full Council later in December 2018, had not been implemented; when the current administration decided to overturn that decision; and at what public meeting of the Executive had it been made? There was no evidence of a public decision, no scrutiny by councillors or the public, and no record of the decision. The fact that an Executive decision of 18 months ago could be overturned seemingly behind closed doors raised very serious concerns around transparency in governance, and she looked forward to being provided with some answers.

10.3     Cllr Steve Cosser echoed the concerns raised by Cllr Potts regarding transparency around dealings on the site, but in addition he did not believe that the agenda report made a clear and credible case for approval of up to £70,000. It appeared that the council had already spent £20,000 on legal advice to assist in securing the site and was now seeking approval retrospectively, so again there was a very unclear process. There was also a suggestion of the need for further legal advice, and apparently no certainty about securing the site. Against that background and taking account of the unspecified amount paid for the initial assessment, how could the Executive justify the risk of further possible abortive expenditure of up to £50,000 for yet more work on options? Given the council’s current financial position, wouldn’t this expenditure be better deferred? Cllr Cosser went on to ask when the public might be given a say on the future of this site; and whether Cllr Merryweather could clarify his earlier comments that no change of land use was proposed, yet it was still intended to spend £50,000 to look at options.

10.4     Cllr John Gray referred to the apparent retrospective approval sought for £20,000 of legal fees and the process being followed, which was contrary to paragraphs 4.27 to 4.30 of the Finance Regulations on Supplementary Estimates. These regulations were introduced to improve transparency and to give justification to supplementary estimates on the basis of value for money, including noting and considering other options available to the council including that of taking no action. There was a responsibility on the Section 151 Officer to produce this information either in a separate paper or as part of the report, and this information had not been provided. The Financial Regulations had been updated in March 2019 when Cllr Gray was chairman of the Audit Committee, and the provisions were drawn up by the Section 151 Officer and the Monitoring Officer to address the transparency issue on Supplementary Estimates, and Cllr Gray asked why the process had not been followed before spending the £20,000; and if that money had not yet been spent why the process was not being followed now?

10.5     Cllr Jenny Else reported that she had received a number of communications from residents asking what had happened to the decision taken by the previous Executive which now appeared to have been rescinded. She was particularly concerned at an email from a resident who felt that the directors of Broadwater Golf Club had been treated disgracefully and dishonourably, and that reflected on the ethics of all Members of the council; and another who felt that the directors had been misled into spending on planning and consultants fees to redesign and recap the course. She asked what the reason was for the change in direction, after there had been no objection to the planning application to Surrey County Council from Waverley’s Parks and Countryside Team, and County Councillor Penny Rivers had commented on the golf course being a much loved community space.

10.6     Cllr Jerry Hyman noted that this recommendation was for £50,000 and the breakdown of this sum was shown in the Exempt report. He was not against exploring options, but was not impressed by the quality of the consultants’ work based on the reports provided.

10.7     Cllr Robert Knowles agreed with Cllr Hyman that the quality of the reports was poor and did not acknowledge the change in circumstances caused by the coronavirus pandemic, and were out of date in their analysis of the economic prospects. He was concerned that decisions were being taken on incomplete information, and it was a reckless use of public funds. He was also unhappy to hear the comments relayed by Cllr Else, and that councillors’ ethics were being questioned when they had had no knowledge of what was happening.

10.8     Cllr Ward noted that the decision was clearly not popular with Opposition Members, but the underlying objection seemed to relate to process: the decision taken by the Executive in December 2018 had a number of caveats on it and these had not been fulfilled, therefore the decision had fallen away. There had now been time to look at it properly and make a different decision. He did not accept that an Executive could not change a previous decision.

10.9     Cllr Follows noted that the Leader of the Opposition Group had stated that the decision was subject to the usual legal caveats, and that highlighted the real lack of a process issue; yet there was still a focus on process over substance. There was a responsibility on councillors to ensure residents were told as much as possible while maintaining a legal duty on confidentiality, and responsible councillors had been clear on social media about what could and couldn’t be said. And, far from speaking for residents en masse, it appeared that Cllr Else had lifted her comments from social media.

10.10   In summing up, Cllr Merryweather referred to the notes from the Executive of 4 December 2018, and noted that the original decision had been “to authorise officers to proceed with due legal process to grant a new lease”, so the decision was start a process, not to sign a lease under any circumstances. The current situation was the outcome of the due legal process during which the assumptions and claims of that time had been tested. It was a shame that the anticipated outcome had not been achieved, not least for the company which took the risk knowingly to pursue the negotiations and the entirely separate planning process.

10.11   Cllr Merryweather also noted that the only reason the matter had come to the Executive in December 2018 was because the grant of a lease over 25 years was outside the Scheme of Delegation to Officers. Following the Executive’s decision Officers had proceeded with the due legal process as authorised, which included detailed negotiations and due diligence. That process did not produce an outcome that was acceptable to the Council and was discontinued by the Head of Finance and Property in consultation with the Portfolio Holder, thereby triggering the termination of the tenancy. Whilst not strictly required, Members of the Executive had been briefed and they concurred with the action taken. There was no reversal of a decision; there had been a conclusion of a process authorised in 2018.

10.12   Cllr Merryweather agreed with the points made by Cllr Cosser and Cllr Hyman regarding a duty of care in respect of public money; but the council also had a duty of care in respect of public assets, and it was the council’s policy to consult external advisors to get appropriate and relevant advice when needed.

10.13   Finally, Cllr Merryweather apologised and corrected the report, in that the £20,000 requested for legal fees had not been spent and was a contingency in the event that court action was required to terminate the lease.

10.14   The Executive RESOLVED the use of the Investment Advisory Board Reserve to fund the options appraisal on the Broadwater Golf Club site of £50,000 and the legal fees incurred of £20,000.

Reason: The council’s Property Investment Strategy recorded the Council’s proposals in relation to Value for Money, the need for the Council to maximise the financial benefit from its assets, and to consider the development opportunities for those assets where appropriate. In furtherance of this the Council had written to Broadwater Golf Club Ltd to inform the company of the Council’s decision not to renew its lease. In order to demonstrate the Council was actively pursuing the development opportunity of the site, work needed to continue to the next phase of the options appraisal.