211
Councillor Bentley (by reason of being Essex County Council Cabinet member for Infrastructure) and Councillor King (by reason of being a Director of North Essex Garden Communities Ltd) declared a non-pecuniary interest in the following item pursuant to the provisions of Meetings General Procedure Rule 7 (5).
Mr Coode-Adams addressed the Panel pursuant to the provisions of Meetings General Procedure Rule 5(1) to raise concern at the risks that this project would represent for the public and local authorities, at the potential need for large-scale borrowing to fund it and about matters raised by the redacted Price Waterhouse Coopers (PwC) report on the project. Mr Coode-Adams recommended that the Panel request unredacted copies of this report. He expressed fears that there is and would be a lack of control over the project by elected members and that the development corporation would not be subject to oversight by local authorities and scrutiny by the public. Mr Coode-Adams encouraged elected members to insist upon receiving a full business plan and financial appraisals for the project.
Mr Sunnucks addressed the Panel pursuant to the provisions of Meetings General Procedure Rule 5(1) to request an explanation as to why no additional financial data had been provided, following his request made at the Panel meeting on 19 March 2019. He further requested confirmation that the money due from central government and the local authorities involved in the project been received for 2018/19 and detail as to who authorised the payment from Colchester Borough Council. He recommended a 50-year financial appraisal and model and called for evidence giving assurance that spending is economically efficient. Concern was raised that either infrastructure promises would not be met, or the scale of the project would need to reduce, based on similar projects attempted elsewhere. Full release of financial information to councillors would be vital for proper scrutiny before decisions are made on the project.
Councillor Luxford Vaughan attended and with the consent of the Chairman addressed the Panel to express her concerns regarding accountability. A response was requested to questions she had previously raised directly with North Essex Garden Communities (NEGC) Ltd. Concern was voiced that spending was going ahead without a confirmed business plan in place and that the setting up of a locally-led development corporation (LLDC) would leave local authorities with no planning or financial control. Councillor Luxford-Vaughan requested a clear explanation of what powers councillors will have over this, what spending is involved and who makes decisions, as well as details of plans to potentially use compulsory purchase orders for land. She requested the unredacted 2016 PwC report, NEGC Ltd’s current strategic risk register and plain-English, past and present financial reports. Councillor Luxford Vaughan also sought assurances regarding the information that Cabinet received before deciding upon a dedicated delivery structure and raised the statutory requirements for setting up an LLDC and local authority oversight.
Councillor Luxford Vaughan asked why Essex University appeared to garner greater consideration than other stakeholders which could be affected by the development of garden communities.
Councillor King, Portfolio Holder for Business and Resources, Ian Vipond, Strategic Director for Policy and Place, and Richard Bayley, Group Manager of NEGC Ltd attended to present the report.
Councillor King described the work being done by the NEGC Ltd Board to ensure that infrastructure and community facilities are provided within the Project. He agreed with the importance of providing as much transparency as possible (excluding commercially-sensitive matters), informing the Panel that he wished to hold regular all-member briefings, to cover the work and financial information of the publicly-owned NEGC Ltd. Assurances had been sought and provided on the value-for-money of NEGC Ltd’s spending, and the Section 151 Officers of each shareholding local authority have scrutinized the company’s accounts.
Councillor King explained that long-term planning and evaluation of sustainability would be conducted over the coming year and would be informed by future input from the Planning Inspector considering the Local Plan.
Councillor King agreed to provide a report to all councillors following each meeting of the NEGC Ltd Board and explained that he planned to circulate weekly updates to councillors, covering NEGC issues and progress on the Local Plan.
Addressing accountability concerns, Ian Vipond highlighted that there is almost no councillor involvement and oversight of private developments once they are approved, in contrast to the oversight and leadership roles that the local authorities will have in relation to NEGC Ltd. Transparency is an integral part of the planning process, with all information and documents used within it to be made public. Mr Vipond offered to meet again with Councillor Luxford Vaughan to address her questions. He agreed that jargon should be avoided in documents for scrutiny by councillors and the public.
An ‘in principle’ decision has been made by Cabinet to consider different types of development vehicles and mechanisms, but a final decision was yet to be made regarding the use of a delivery vehicle. Each local authority would need to approve the method for proceeding with this.
Richard Bayley agreed with the need for inclusivity regarding the work of NEGC Ltd. and expressed readiness to work with local authorities and councillors on communications and dialogue. All-member briefings had been used successfully as part of other development processes. Mr Bayley recommended that these be held prior to key decisions, to provide councillors with information and assurances. Efforts would be made to ensure briefings are written in an accessible fashion, and jargon minimised. Certain decisions would however need to remain confidential, especially where these involved third parties.
Richard Bayley discussed the risk inherent in any development venture and gave assurance that this would be assessed as part of the options appraisal within the decision-making process regarding development vehicles. This would comply with duties relating to risk assessment and expectations laid out within the Treasury’s Green Book.
Addressing a concern raised by Mr Coode-Adams regarding the format of the 2018 NEGC Ltd AGM, Mr Bayley explained that this had been a specific procedural meeting for shareholders, but that it had been followed by a public meeting open to all.
In response to Mr Sunnucks’ request that a 50-year financial appraisal be carried out, Richard Bayley gave assurance that this was already underway and would assess the venture’s long-term viability. This would form part of the options appraisal and decision-making by the councils in the coming months. In reply to Mr Sunnucks’ concerns stemming from specific previous projects, Mr Bayley clarified that they were not comparable as those had involved land already owned by the local authorities involved.
Mr Bayley gave clarification that an interim business plan was currently in use by NEGC Ltd as the company was not yet in a position to draft a five-year business plan. Finances went through the budget procedures of the shareholding local authorities. All funds due from authorities and central government had been received for 2018/19 and year-end finance data had been made available. The Panel was given assurance that NEGC Ltd would work with local authorities to ensure all councillors were provided with regular ‘Plain English’ briefings on the company’s work and finances. Richard Bayley promised to provide a response to the questions from Councillor Luxford Vaughan which had yet to be addressed.
Richard Bayley informed the Panel that it would be possible for NEGC Ltd. to provide a ‘Plain English’ version of the interim business plan within the next month, alongside the documentation and data which could be provided to the Panel.
Public and stakeholder engagement was explained and included work carried out with the University, local businesses/employers, the Haven Gateway Partnership, Homes England, Stansted Airport and local port authorities. Future public engagement would be more interactive and would be run as a three-sequence process over 18 months after the local authorities had gone through the sustainability and options assessments.
Regarding the 2016 PwC report, Mr Bayley and Councillor King informed the Panel that advice would be sought as to whether councillors could be provided with an unredacted copy, and it would be done if possible. A Panel member posited that councillors were entitled to see full copies of such reports, even if this required them to sign confidentiality agreements. The Panel also requested that full financial reports should be sent to all councillors. Richard Bayley confirmed he would work to provide the financial data they require but that each share-holding local authority would need to agree to the terms of what data is made available. A request was made by the Panel for updated financial modelling to be provided. Ian Vipond agreed to make this available and explained that it would be done as part of the viability assessments. There will be briefings held for councillors prior to this, covering a range of issues including the viability assessments.
Richard Bayley outlined the oversight and control arrangements over LLDCs. The three-level structure consists of local authority oversight and control, oversight by the development corporation board (independent and local authority-appointed directors) and lastly oversight within the development vehicle/s. Oversight of stewardship and legacy issues were explained and identified (e.g. affordable housing, community facilities, energy supply). This would give local authorities certain greater control over decision making. A member of the Panel requested that a full explanation of this structure, and the powers held by councillors, be circulated to all councillors prior to a decision being made as to whether this approach should be agreed to.
Richard Bayley informed the Panel that there were alternative options to the model he had described, and that these would be examined within the options appraisal process. This would be conducted later this year. Councillors would receive details on this in preparation for this. It was confirmed that the Scrutiny Panel would be able to scrutinise the options appraisal process, should it wish to. Panel members discussed the importance of ensuring Scrutiny Panel conducted regular effective scrutiny of the NEGC Project, and the need for training to be given to allow members to conduct this.
The Panel discussed spatial planning and infrastructure provision within the Project and its crucial nature. A member of the Panel highlighted the Essex County Council report which predicted that in 20 years’ time there would be an infrastructure deficit of £553m within Colchester Borough. Richard Bayley agreed that provision of infrastructure and employment opportunities are a key part of the NEGC Project and explained the work being carried out on these. Costings of planned work have been confirmed and are ready for appraisal by the Planning Inspector. A Panel member asked when councillors would be informed of the infrastructure being proposed for delivery within the NEGC Project. Richard Bayley explained that NEGC Ltd will respond within the Local Plan process, which requires the local authorities to assess the sustainability appraisals for the Project. The infrastructure plan and financial details will be published when the revised Local Plan viability evidence is submitted to the enquiry. Delivery options will then be appraised.
Richard Bayley informed the Panel that the objective was to produce well-connected, walkable communities, with good connections to other areas and infrastructure that included healthcare and educational facilities. Clinical commissioning groups have been met with to discuss facilities for health.
Questions were raised by the Panel relating to the number of additional jobs expected to be created and employers attracted to the area, the work being done by NEGC Ltd to achieve this and the amount of land being set aside for employment-creation. Richard Bayley explained that there were a range of options being discussed and confirmed discussions were ongoing with employers. He explained that this would be addressed within the master planning to be conducted over the next 18 months. This would cover employment creation and land for employment. Sectors approached by the Project so far include technology (with opportunities around the University), energy providers (especially ‘green’ energy) and sectors which would benefit from easy links to Stansted and/or Cambridge. This would lead to an improvement in economic performance across North Essex. It was important that the master-planning process be inclusive of the public and potential employers so that appropriate layout options are included to allow employment opportunities. Current targets for employment land in the developments would be flexible to allow for increases, should there be greater-than-expected interest from potential employers.
The Panel noted NEGC Ltd’s position as both having development and planning responsibilities and queried this. Richard Bayley confirmed that he understood the position of NEGC Ltd, and that the company’s aim is to build communities rather than just houses.
In response to questions on the three possible delivery options and their respective risk profiles, Richard Bayley explained that risk and benefits analysis would be conducted by the NEGC Ltd Board when it considered the delivery options appraisals. He described the three vehicles and the different risk profiles. A Panel member asked questions relating to potential financial risks which may emerge from land purchases being land-banked until later stages of the Project. Richard Bayley explained the phased approach which had been used in an earlier project he had been involved with in Basingstoke, where long leases had been granted by the land owner to the local council, and the council then took a phased tranches approach to development. Mr Bayley answered questions relating to phased purchases of land, and whether this would increase the value of land in later sales. Options available to address this include compulsory purchase orders and/or private agreements with landowners.
Councillor King was questioned as to alternatives, should the Planning Inspector reject the approach proposed. He explained that the Cabinet would need to immediately discuss options to put forward, should this occur.
Changes in the administration of partner councils were raised by the Panel, their potential effects on the investments due to be made by them to NEGC Ltd, and the risk management implications. Richard Bayley, Councillor King and Ian Vipond answered points raised. They highlighted that income from government and local authorities in 2018/19 had been received, gave assurance that local authorities have affirmed support for the NEGC Project, and confirmed that the Project was not dependent on funding from any single one of the individual councils involved in the Project. Ian Vipond expanded on this to explain that Uttlesford District Council were understood to be proceeding to examination with the Local Plan which include the NEGC Project.
A Panel Member queried differences between the original 2018/19 financial information and the year-end figures circulated to the Panel prior to the meeting. Richard Bayley explained that changes occurred due to the agreed slowing of work following Christmas, a vacancy factor from one seconded officer leaving and others reallocated to work on the Local Plan. Further savings had also been made relating to indirect costs incurred.
The Panel requested that copies of each of the development sites’ financial viability appraisals be made available to the Panel for scrutiny, especially those within Colchester Borough. Richard Bayley confirmed that the Panel would be taken through the appraisals and would provide scrutiny at the appropriate juncture, and that he would liaise with Council officers to confirm the correct process and protocols.
The Panel discussed the need for better public presentation of the Garden Community Project, to reduce negative perceptions and emphasise the improvements which are being sought. Members of the Panel requested that the expected formal business plan provides better content on why this Project is being proposed, and the current problems it aims to mitigate. This, alongside user-friendly documents, will assist councillors to understand the Project and explain it to their constituents. Councillor King agreed that it was vital to agree and show the narrative for this project, and that Cabinet would work to improve clarity, information-sharing with councillors and ensure that public scrutiny would be effective and an important part of the oversight process. He further pledged to provide a clear calendar of future key moments and events in the Project’s future.
Panel members highlighted uncertainty regarding planned upgrades to the A12 and A120 which may affect the proposed garden communities. Richard Bayley confirmed that this was not in NEGC Ltd’s power to control, but that its input would be given to consultation by Highways England later in 2019. Mr Bayley stressed the importance of the link road proposed between the A120 and A133. Ian Vipond expanded on this to explain that the local authorities involved and the Local Plan all stress the need for upgrades to these main road links. This would be raised with the Planning Inspector once the Garden Communities plans reach the next phase of examination.
Regarding ‘Legacy and Stewardship’, a Panel Member requested that NEGC Ltd. encourage community investment companies and co-operatives to participate from the outset. Richard Bayley agreed the importance of this and set out a three-stage public/community engagement process for the future.
RESOLVED that:-
(a) The Panel noted the report and expressed its thanks to Richard Bayley, Ian Vipond and Councillor King
(b) The Scrutiny Panel to scrutinise the delivery options appraisal and process, prior to its consideration by Cabinet and for NEGC Ltd to appear before the Panel on at least an annual basis.
(c) Training to be provided to the Panel to help their scrutiny of NEGC Ltd.
RECOMMENDED to Councillor King, Portfolio Holder for Business and Resources that:-
(a) The unredacted 2016 PwC report be provided to the Panel within a month of the meeting;
(b) A report to be provided to all councillors following each meeting of the NEGC Board;
(c) The financial viability appraisals for the development sites to be provided to the Panel;
(d) A ‘Plain English’ summary of the Government guidance relating to setting up development corporations and oversight/decision-making powers of elected members be provided to all councillors within a month of the meeting;
(e) Quarterly briefings on the NEGC Project to be provided for all councillors;
(f) To consider the need for better public presentation of the Garden Community Project, to reduce negative perceptions and emphasise the improvements which are being sought and to ensure that the NEGC Business Plan reflected this by including information on why this Project was being proposed, and the current problems it aimed to mitigate.