Daily Archives: 17 Oct 2023

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17 Oct 2023

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Planning applications validated in EDDC for week beginning 2 October

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17 Oct 2023

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Exeter council owed £10m by its property developer

Exeter City Council has found itself at the centre of huge scrutiny and facing financial losses of more than £10 million due to the significant delivery failings of its subsidiary property development company Exeter City Living (ECL). The profit-for-purpose limited company was set up in June 2018 to ‘transform the lives of others through innovative and sustainable building and development’.

Anita Merritt www.devonlive.com

An independent review of its operation was commissioned by the council in April following the failure of ECL to secure a contract for the development of the Clifton Mews site – formerly Clifton Hill leisure centre – and the continued uncertainty around the development said to be due to the ‘difficult current economic climate’. It was also initiated due to concerns relating to the financial position of ECL and its continued ability to repay its loans to the council.

It owes the council more than £10 million against loans intended to deliver hundreds of new homes on sites in Exeter. ECL is said to have made cumulative losses of more than £4.5 million and without intervention from the council, it would be insolvent.

The council’s finances are already under strain having had to cut another £5 million from its latest budget. At an executive meeting of the council earlier this month, it was agreed to recommend to wind down the operations of ECL. The matter will now go before the full council tomorrow, October 17.

It means the council will acquire all of ECL’s assets – with the exception of the six leasehold flats in the Guildhall Shopping Centre – and any work in progress by releasing the company from its loan obligations, leaving it to settle the company’s loan liabilities when its creditors are repaid.

A spokesperson for Exeter City Council said: “The report will now go before council tomorrow night [October 17], where councillors will have an opportunity to decide whether to back the recommendations. We would not therefore want to comment before that decision is made.”

The council has approved loans with a value of nearly £25 million to ECL and, to date, ECL has borrowed nearly £11 million from the council. It has around £10 million in debts outstanding. Based on the company’s latest accounts, it has work in progress totalling £4 million cash in the bank stands at around £1.8 million which could be subject to change.

If councillors agree to a managed reduction in the size and type of activity of ECL as recommended, then the council will be required to write off any remaining outstanding element of the loan.

Regarding the impact of this, the report, written by the council’s new chief executive, Bindu Arjoon, states: “In respect of any write off in respect of the loan, there will be no immediate impact on the council taxpayer, other than for the council to make repayments in lieu of the loan repayments from the company. However, as there is no longer an asset associated with this debt, the council will need to make arrangements to repay the debt as soon as is practicable.

“The options for this are to sell assets to generate capital receipts or to set aside revenue resources. Depending on the value of debt outstanding, it is likely that the sale of an asset (or assets) will be required.”

The council’s controversial decisions are said to have included a loan to the company of up to £44 million to finance construction and also spend £46.3 million buying the resulting housing, underwriting the company at both ends after failing to change course when new local government borrowing rules rendered the company redundant just 10 weeks after it was set up.

The report to the council’s executive, debated on October 3, states within its recommendations: “In the likely event that the value of the assets to be acquired from ECL is insufficient to repay the loan to the council, then delegated authority be granted to the chief executive, in consultation with the leader and section 151 officer, to write off any shortfall. Thereafter, ECL, in a much-reduced capacity shall continue for the purpose of holding and managing property and in particular the six Guildhall flats.”

It added it was too early to know what impact it will have on the staff at ECL, and that work will be done to identify if those staff can be redeployed elsewhere in the council.

Giving further insight into the financial impact on the council, the section 151 officer said: “The objectives and intentions of ECL were ambitious and in line with aspirations. The challenging environment caused by external factors has meant that a reduction in the capacity of the company is financially prudent at this time.

“It is important that the council has regard to the future management of the flats located within the Guildhall Shopping Centre. At this stage, it is not envisaged that the debt will require the sale of any assets that were not already earmarked for redevelopment.”

The monitoring officer added: “ECL was set up with the very best of intentions but as a commercial venture, it was susceptible to market forces which have had a significant, negative impact on its viability for the reasons set out in this report.”

The reasons stated include the global pandemic, the invasion of Ukraine, significant rises in interest rates, and prolonged uncertainty surrounding Brexit.

ECL is described as a housing delivery vehicle that was set up five years ago as a wholly-owned subsidiary of Exeter City Group (ECG). Its aim was to provide much-needed housing in the city to help tackle the housing crisis.

The idea was the company would also generate an income stream for the council at the same time as unlocking sites that other developers were unable to. Since it was founded, ECL has so far completed three sites – Anthony Road, Thornpark Rise (Hockings Green) and Bovemoors Lane – providing 22 homes.

It has two developments under construction. A scheme of 21 new Passivhaus apartments at Hamlin Gardens is due for completion in March 2024. The second is 35 new Passivhaus affordable apartments at The Gardens Whipton, Vaughan Road, which is the first phase of 91 new homes due for completion in December 2024.

A further site to provide 41 homes at Clifton Hill is cleared and ready to start construction when ‘economic conditions improve’.

ECL has been approached for a comment.

Projects taken on by ECL as reported in the independent review issued in August 2023:

Vaughan Road

Former tower block site (now cleared) held within the HRA located within a wider estate regeneration area. Being delivered in three phases to enable mid-sized contractors to tender for the phase scheme. Considering densification of site via later phase development which would replace older bungalows. Looking to bid into BRLF. Will deliver 80-120 houses on vacant site.

Contractor secured for first phase and development is progressing. ECL plans to include phases 2 and 3 within the current work package, which is subject to full council approval. All phases are due to complete by December 2024.

Clifton Hill

Site of former leisure centre with planning permission for 42 units. It has been described as a ‘challenging site’ with level changes impacting on development costs. Following a failed procurement and contractor supply chain issues, the site has been put to a separate contractor to examine alternative design/ engineering solutions and identify associated cost savings, including simplified unit types.

The council’s report says it is a ‘stalled site’ and delivering a viable scheme may remain a challenge in the absence of gap funding.

Mary Arches Car Park

This site is allocated in LocalPlan. BLRF bid is submitted and proposals are currently at RIBA Stage 1/feasibility stage. Development would contribute to Liveable Exeter ambitions. There are two halves to the scheme proposals. Phase 1 relates the MSCP site with a concept plan for 100 build to rent homes to be held by either ECL or PropCo.

The scheme requires the securing of vacant possession of two ground floor units, however, in relation to one unit, there is the potential need to affect powers which, if required, will impact on the timing of delivery and will incur additional costs. BLRF has been secured for the demolition works and in line with funding conditions the development will need to start/or land transferred by March 31, 2024.

Archaeological digs will be required which is a potential risk to this subsequent phase of development in terms of delays and costs. ECL propose they negotiate disposal with the city surveyor and then pay Best Consideration when the option is exercised. (determined via an independent valuation). This is to preserve BLRF funding.

Exeter Canal Basin

Exeter Canal Basin is held within the General Fund. ECL is in the process of assembling scheme proposals with a view to submit for planning in June 2023. Capacity for 37 units including four duplexes and apartments (3 and 4 storey). ECL is to provide the results of their options analysis to inform ECC decision-making. Aspirations are for the scheme to retain the Exeter Watersports centre and contribute towards net-zero targets.

Viability is a potential risk and is to be determined in conjunction with the options analysis and a land value/ land receipt confirmed. There are issues related to securing vacant possession of existing buildings.

Bonhay Meadow

Bonhay Meadow is held in the General Fund. This is an area of open space which is owned. Set in Liveable Exeter Strategy this area is seen as a significant regeneration area.

Proposals are paused. We are advised that this is a sensitive site, due to some resistance development from planning and political sensitivities regarding building on open space.

There are also some concerns which have been flagged from the Environment Agency .BLRF has been secured but is at risk with transfer of land or start on site by March 31, 2024 a funding requirement. ECL proposing land be transferred to ECL and leased back to ECC to protect the BLRF. However, this is a risky strategy as it is possible that the site remains undeliverable in view of the issues highlighted.

Cathedral & Quay Car Park

The site is held in the General Fund. Council car park with structural issues. Need to look at the options for delivering this site. Workstage 2 end of this month. Capacity for 31 units. Potential for off-site affordable housing and 100% market sale onsite.

Project has been paused. Key risks associated with development include: £2m BRLF which is at risk. Need to transfer land or start on site by March 31.

Belle Isle Depot

Site in council ownership (still operational depot). Site has capacity for 32 units, and is intended to deliver family homes/apartments for sale, to a Passivhaus or Net Zero standard, and improve the national cycle route experience.

Alternative premises for the depot, and vacant possession of the existing depot which remains operational, and development viability. Significant contamination is likely.

Glasshouse Lane

This site is in third-party ownership. Open space/park situated within a council estate area. Restrictive covenant associated with use as Church. Review of open space – planners indicate this is not needed. Capacity for 24 affordable units.

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Map shows Devon’s rising Covid cases

Daniel Clark www.devonlive.com 

The number of Covid cases in England and Wales has started to fall after an initial rise at the start of Autumn – but numbers are still rising in Devon.

[The Zoe study that continues to track symptoms, and which has proved reliable throughout the pandemic, is not yet showing a downturn – Owl]

There were a total of 15,797 new cases of the disease in England in the week leading up to October 7, according to the latest government figures. It’s the equivalent of 27.9 new cases for every 100,000 people in the country. That’s down from 16,186 cases, or 28.6 for every 100,000 at the same point a week earlier, on September 30.

In Devon the latest Covid rates are at 32.3 per 100,000, which is up four per cent week on week. In Torbay they are at 40.4 per 100,000, which is just outside the top 10 nationwide for upper tier authority areas, but that is down 16 per cent week on week.

Babbacombe & Plainmoor is the area of Devon with the highest Covid rates of 107.4 per 100,000. That equates to six positive cases in the seven day period ending October 7. Tavistock, with ten, was the only area of Devon to record double figure number of cases.

Below is the list of latest Covid rates and cases for East Devon and Exeter (full list in devonlive article). If the area is not mentioned, it recorded fewer than three cases.

(Covid rates shown in last two columns are: rolling rate of cases per 100,000 and cases in the last seven days)

East DevonSeaton79.36
East DevonAxminster63.16
East DevonHoniton North & East66.44
East DevonClyst, Exton & Lympstone584
East DevonExmouth Withycombe Raleigh54.24
East DevonExmouth Halsdon42.93
East DevonExmouth Littleham39.43
East DevonOttery St Mary & West Hill32.83
ExeterHeavitree East & Whipton South79.66
ExeterPinhoe & Whipton North52.15
ExeterCentral Exeter39.55
ExeterWonford & St Loye’s47.84
ExeterSt Thomas West41.63
ExeterHeavitree West & Polsloe34.73
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Another one bites the dust -Owl

Tory MP Peter Bone ‘exposed himself to staff member and trapped him in hotel bathroom’

Tory MP Peter Bone could be banned from parliament for six weeks after he was found to have indecently exposed himself to a staff member and trapped him in the bathroom of a hotel room.

Archie Mitchell www.independent.co.uk 

The parliamentary commissioner for standards upheld five allegations of bullying and one of sexual misconduct against the Wellingborough and Rushden MP. The recommended six-week suspension for Mr Bone would trigger a recall petition if approved by parliament, creating a fresh by-election headache for Rishi Sunak.

Mr Bone was found by parliament’s Independent Expert Panel (IEP), which rules on complaints against MPs, to have “committed many varied acts of bullying and one act of sexual misconduct” against a member of his staff in 2012 and 2013.

The MP, elected in 2005, was found to have engaged in “violence, shouting and swearing, mocking, belittling and humiliating behaviour, and ostracism”.

In its report, the standards commissioner found Mr Bone had:

  • Indecently exposed himself to the complainant on an overseas trip, initially in the bathroom of the hotel room they were sharing and then in the bedroom
  • “Verbally belittled, ridiculed, abused and humiliated” the complainant
  • “Repeatedly physically struck and threw things at” the complainant
  • “Imposed an unwanted and humiliating ritual on” the complainant, including instructing, or physically forcing, the complainant to put his hands in his lap when Mr Bone was unhappy with him or his work
  • “Repeatedly pressurised [the complainant] to give him a massage in the office” 

The “willful pattern of bullying also included an unwanted incident of sexual misconduct”, in which Mr Bone indecently exposed himself to a staff member in a hotel in Madrid.

The report detailed how Mr Bone booked a single hotel room for himself and the complainant during a work trip in Spain, which one staffer told The Independent is extremely unusual.

Mr Bone then became angry when the complainant separated the two single beds in the room before engineering a situation in which the complainant was “confronted by his penis at very close quarters”, the report said.

In a statement posted on Twitter/X, Mr Bone said the allegations were “false” and “without foundation”, adding: “None of the misconduct allegations against me ever took place.”

Mr Bone indicated he would fight the suspension, saying it has been “an honour” to represent his constituents and “I will continue to represent them to the best of my ability.”

He accused the parliamentary watchdog’s investigation of being “flawed and procedurally unfair”. “I am currently in discussion with lawyers what action could and should be taken,” he added.

Mr Bone’s complainant first complained about the MP’s behaviour to the Conservative Party in 2017, but it was unresolved and parliament’s watchdog began investigating five years later.

The complainant felt that he had to leave his job as “a broken shell” and give up a career in politics entirely. The report said there had been a “long-lasting negative impact on his life”, adding that he has suffered continuing anxiety and required treatment for his health.

The Liberal Democrats called for Mr Sunak to withdraw the Conservative whip from Mr Bone.

Lib Dem chief whip Wendy Chamberlain said Britain deserves better than “endless Conservative Party sleaze and scandal”.

She added: “Rishi Sunak needs to remove the whip from Peter Bone and call on him to resign. There is no place anywhere in our society for this kind of sexual harassment and bullying.”

The recommended six-week suspension for Mr Bone would trigger a recall petition if approved by parliament.

It would set up the latest in a series of testing by-elections for Mr Sunak in safe Conservative seats, with the party lagging Labour in the polls.

Mr Bone has an 18,540 majority in the seat, smaller than that overturned by Labour MP Keir Mather in Selby and Ainsty in July.

His recommended suspension comes days before Mr Sunak faces key by-elections in Mid Bedfordshire and Tamworth – with voters able to give their verdict on the government’s performance.

Mid-Bedfordshire is Nadine Dorries’s former seat, which she quit in protest at being left off of Boris Johnson’s resignation honours list.

Tamworth’s by-election was forced by the suspension of Chris Pincher, who was found to have drunkenly groped two men at a private members’ club last year.

Labour is the second biggest party in Mr Bone’s Wellingborough seat and, with an 18-point lead in the polls, could threaten to turn the constituency red for the first time since Tony Blair’s 1997 landslide.

In July, Labour celebrated its largest-ever by-election win in Selby and Ainsty, with a 23-point swing away from the Tories. On the same day, the Liberal Democrats won a huge victory in Somerset, toppling the Tory safe seat of Somerton and Frome.