Last Friday Liverpool City Council’s Cabinet received a report so breathtakingly awful that I found it difficult to believe that it had been issued.
As soon as I could I called it in for scrutiny (more about that below)
Without going into detail which I will leave to the except from the Liverpool Daily Post which is appended below I could not believe that a report that had the intention of ‘investing’ £25 million of council tax payers money could be:
1. Dealt with as a ‘ward matter’. This affected our ability to call in the item for scrutiny. To be fair to the Chief Executive he quickly realised this was untenable and changed the designation.
2. Be just 4 pages long
3. Have no details of the intended private sector partner except their name and some (wrong) information that they were connected with the management of a prestigious development in Liverpool.
4. Have no recommendation that a further report be returned to Cabinet and Council when a full due diligence and risk assessment exercise had been completed.
5. Be dealt with in the confidential part of the meeting when there is £25 million at stake.
You have to question the judgement of the council:
1. Did they really think that the loathsome reptiles of the Post and Echo (it’s OK – Marc Waddington will get Brownie points for that description!) would not find out in minutes all about the scheme? They had the name of the building in question and the name of the developer from the planning application which they had reported on in May. I reckon it took them 90 minutes of sleuthing in Liverpool to find out far more facts than were in the report!
2. Did they really think it appropriate to gamble £25 million of tax payers’ money in secret?
3. Did they really not think it appropriate for a report to come back to the Council?
4. Did they really not do anything to check out the funding streams available to the potential developers so that they could be included in a report of this nature?
So where does Shelob & Co fit in? Well I am great fan of Lord of the Rings. I recently got a letter from a chum who addressed me as Strider and went on to claim that I am taking on the Orcs and the fighting Urukhai! What a lovely description but I don’t think I am either Strider, Lord Aragorn of=r for that matter Frodo or Sam. Perhaps my role is to be the phial of light given by the Lady Galadriel and used by Frodo and Sam in Shelob’s Lair. I am there to be wafted around to shine a light on the murky darkness’s of Liverpool City Council.
But then who is Shelob? Who is Gollum? Who is the Leader of the fighting Urukhai? Answers on a postcard or comment on this blog please. The best answer which is not libellous will get a portion of way bread cooked by the fair hand of the Elf Queen Erica herself!
Read the article and judge for yourself?
Opposition bid to block £25m ‘property gamble’
Liverpool opposition leaders were last night attempting to block council plans to “gamble” £25m of taxpayers’ cash by lending it to a private property firm that wants to develop an apartment complex.
A confidential report that went before the cabinet on Friday stated that the council plans to give the cash to Glenbrook Property Ltd to buy up the now empty Customs and Excise building on Queens Dock.
It would be bought from investment firm Mapeley STEPS – an off-shore firm once partly owned by controversial financier George Soros – and redeveloped into apartments.
City leaders insisted they would ensure they would be guaranteed their return and a surplus after the developer made its profits and that the plan would have to be signed off by the District Auditor.
But the Liberal Democrat opposition said it was outrageous that decisions involving such a large sum of taxpayer cash should in the first place be taken in private by the cabinet.
They questioned whether it was wise to consider lending the money to a firm only established in the last two years with no apparent development track record.
Last night, after The Post put its questions to the council about the secret report, city leaders rushed out a press release promoting the scheme, but made no mention of the sum they proposed to lend.
The council has not responded to The Post’s questions about the risks of the scheme or who is actually involved in it.
Other potential partners have already walked away because the plan was considered too risky and investigations by The Post have prompted concern about the accuracy of the report considered by the cabinet.
The document, seen by The Post, states that “units are to be let at private market rents and managed by the developer’s management company. This company currently operates the One Park West development in Liverpool One.”
But The Post has spoken to the current management company at One Park West, Braemar Estates, who “categorically” said they had no involvement with Glenbrook Properties.
The previous firm involved in One Park West, Rendall and Rittner, also had no knowledge of the Queens Dock proposals for 240 apartments.
And it is understood Grosvenor, which owns One Park West, is not involved in the plans.
Lib Dem leader Cllr Richard Kemp said: “We have serious concerns about the financial viability and want to call this in for further scrutiny by the finance select committee.
“This company (Glenbrook) has no assets and the question must be asked about the wisdom of investing £25m in such a company.
“It’s always going to be a gamble unless we have a partner with a clear financial capacity of their own their own to share the risk. This is clearly a speculative development and you have to ask whether it is right to use taxpayers’ money on a speculative development.”
Insiders questioned where the finance for the actual refurbishment of the building – which is thought to need around £6m spending on its ventilation systems – would be coming from.
Companies House documents show Altrincham-based Glenbrook Properties QD – whose owner is former UK Land and Properties development director Ian Sherry – was set up last year and so has not yet filed any accounts.
Another person connected to the firm with half of the ordinary shares, who asked not to be named, said he would get Mr Sherry to contact The Post, but he has so far failed to do so.
When asked why the company had gone to the council rather than the banks for the loan to buy the property, the source said city leaders must see it as a good investment and that “we’ve had to jump through lots of hoops”.
Merseyside social housing giant Plus Dane, of which Cllr Kemp was chairman until September last year, said there were too many risks for it to be part of the scheme.
Plus Dane was recently downgraded by the Homes and Communities Agency for failings of its board of governors and been warned it needs to better consider its exposure to financial risk.
But a spokesman told The Post it had decided not to get involved early on, adding: “We reviewed the risks earlier this year and they did not meet our requirements so we have had no further involvement.”
Mayor Joe Anderson said: “At a time of inertia in the economy, it’s vital that we work creatively with the private sector.
“These proposals are the latest example of how we are seeking to use our borrowing power and target our resources effectively to help kick-start development and invest in assets that bring in new income streams for the council. We will be making sure we receive all the appropriate legal and financial advice to commence the deal so we are satisfied that we are getting value for money and the proposals will also be scrutinised by a council select committee.”