Pete’s pool in Exeter, Paul’s folly in Honiton?

Exeter City Council Leader Pete Edwards is known for having a dream of what has been dubbed “Pete’s Pool” on the site of the current Exeter Bus Station, despite warnings that Brexit could send it pear-shaped. And now, indeed, the pear has been shaped as both the Princesshay extension AND the pool plans have, at least for now, bitten the dust, with Brexit price rises cited as part of the problem.

Is there a lesson here for “Paul’s Folly” – the new EDDC HQ which could cost us anything from £3 million – £10 million (depending on whether EDDC can sell its current HQ to luxury-retirement home developer PegasusLife?

Exeter’s hoped-for city centre development has been hit by a “double whammy” after a deal to build the new leisure centre and bus station collapsed, the city council leader has revealed.

It emerged on Monday morning that the Crown Estate had cancelled its plans to extend Princesshay shopping centre, citing “market conditions”.

This consigned to the rubbish bin an ambitious plan for a huge public space and amphitheatre across Paris Street into the old bus station and up to the back of Sidwell Street.

Following this, Exeter City Council revealed that a contract with the firm lined up to build the state-of-the-art swimming pool and bus station, believed to be Sir Robert McAlpine, had not been signed.

The authority has now walked away from the deal and plans to re-tender for both projects, adding a year to the completion date, now set at 2020.

Asked if the two were connected, council leader Pete Edwards said the building firm may have been banking on securing the contract to construct the Princesshay extension. …

… Economic uncertainty around Brexit has been blamed for rising prices and the falling value of the pound may have made the leisure centre even more expensive.

Cllr Edwards believes the exchange rate is making material from mainland Europe more expensive but has vowed to complete the project, dubbed by critics “Pete’s Pool”, “before he dies”.

“It is a double whammy and a disaster for the city,” he added. …”

http://www.devonlive.com/news/devon-news/exeters-double-whammy-leisure-centre-529532

EDDC lays foundations for new HQ in Honiton – but who is paying?

EDDC must be feeling VERY positive about the outcome of the PegasusLife Planning appeal as the sale of Knowle land, at around £7.1 million, is meant to contribute to the £10,361,000 cost (at last years costing – who knows what it is this year).

And does it include the £1m plus cost of Exmouth town hall?

Next year’s council tax deliberations will be interesting!

http://www.midweekherald.co.uk/news/building-work-begins-on-new-district-council-hq-in-honiton-1-5206184

“Knowle plans would create ‘elderly ghetto’ “

<em“Appeal documents published this week reveal the continued strength of feeling against redevelopment plans for Knowle – with claims Sidmouth would be dealt a ‘devastating blow’.

PegasusLife has taken landowner East Devon District Council’s decision to refuse its scheme to the Planning Inspectorate.

In emotional submissions, residents said the developer’s proposals for 113 retirement flats ‘run a coach and horses’ over the site’s 50-home allocation in the Local Plan and would create an ‘elderly ghetto’.

Organisations including Sidmouth Arboretum, the Vision Group for Sidmouth, and the Knowle Residents’ Association have also responded to reiterate their calls for the application to be thrown out.

The Sid Vale Association said: “PegasusLife has clearly done its utmost to maximise the development on the site for commercial reasons.

“The appeal should be refused on the grounds that it seeks more than double the number of dwellings earmarked in the Local Plan; that it proposes buildings of a poor architectural design, and that its impacts on nearby residents and on the public parkland are unacceptable.”

Liz Fuller, the buildings at risk officer at SAVE Britain’s Heritage, restated its strong objection to the proposals, saying they represented a ‘devastating blow’ to the history and character of Sidmouth.

Knowle Drive resident Robin Fuller said: “If, at the first major test of the Local Plan, a developer succeeds in turning over its objectives by a huge margin, then the process of local planning is null and void and local democracy can be considered dead and buried.

“Approval on appeal will set a precedent for other developments to run a coach and horses through the intentions of the plan.”

PegasusLife said its scheme will only ‘materially impact’ Hillcrest and its amenity will not be adversely affected.

Homeowners Rob and Sandra Whittle challenged this, adding: “It is crucial that the planning inspector make an internal visit to Hillcrest to understand the negative impact on our home and appreciate what a permanently devastating blow this development in its present form would have on our lives.”

Submissions said 20 homes besides Hillcrest, in Knowle Drive and Broadway, would be adversely affected.

George and Ann Ellis live in Knowle Drive but were in support of the appeal. They said: “Although parts of the development will have some effect on us we feel that these will not be too much of an inconvenience in what to us seems an otherwise satisfactory and necessary scheme. We are very conscious that there is a great need for more housing in the UK with a growing and ageing population.

“Sidmouth is a very popular retirement location and there now appear to be few sites for development – hence the suitability of Knowle.

“There is a big demand for older people to downsize and the benefit of this is that more properties are freed up for younger families.”

EDDC’s development management committee defied officer advice to refuse the scheme last December – arguing it represented a departure from Knowle’s 50-home allocation in the Local Plan. Members also objected to the scale, height, bulk and massing of the proposed development.

At the appeal, PegasusLife will argue the scheme is ‘thoughtful and considered’, its benefits outweigh any potential harm to the listed summerhouse and there is a ‘compelling need’ for extra care accommodation in East Devon.

The deal is worth £7.505million to EDDC, which is relocating to Exmouth and Honiton.

The inquiry will open at 10am on Tuesday, November 28.”

http://www.sidmouthherald.co.uk/news/knowle-plans-would-create-elderly-ghetto-1-5203821

Council’s £1 million overspend investigated; our council’s multimillion overspend on new HQ not investigated!

OUR council has already spent nearly that much on its satellite HQ in Exmouth. The Honiton HQ was supposed to be cost neutral with the proceeds of the £7 Knowle sale to PegasusLife but latest estimates (some while ago and not adjusted for post-Brexit soaring costs) was around £10 million.

How come SWAP could do this in Herefordshire but not in East Devon. Or why KPMG – its new auditors – are not doing it now?

A special investigation into how the costs of establishing a joint customer services hub in a refurbished building soared from £950,000 to more than £1.9m has found evidence that officers “knowingly disregarded council process and procedures”.

The investigation into the Blueschool House refurbishment was carried out by the South West Audit Partnership for Herefordshire Council. The local authority has been working with the Department of Work and Pensions on the project. Have we ever seen the (updated) business case for the new HQ?

The business case for the hub was approved by the council’s Director of Resources on 13 May 2016 and the key decision taken on 2 June 2016 was approved by the Cabinet Member Contracts and Assets.

The SWAP report said: “Overall the council’s normal governance processes have not been followed by key officers involved in the Blueschool House refurbishment.

The key decision did follow the correct governance process however the business case to support the key decision lacked clarity over what works would be included in the £950K agreed financial envelope.

“It would appear that key staff including senior officers at Director level were aware of the council processes and procedures but these have not been applied during this project and there is evidence that officers have knowingly disregarded council process and procedure.”

The investigation found that although there were early indications from the framework provider that the project could not be delivered within the financial envelope even with value engineering, key officers failed to report this to Cabinet.

The report also said:

The rationale for the selection of the contractor could not be demonstrated as there were no records to support this. The property services team had responded to client requests without providing robust challenge, and had not followed the council procedure rules in relation to procurement.

The relationship between the property services team and contractors appeared to be informal for a capital project of this value and throughout the project there was little evidence that value for money could be demonstrated.

In line with the capital guidance, major projects should be overseen by a project board. The Accommodation Programme Board had oversight of the overall accommodation strategy until November 2016 however, there was no project board for the Blueschool House refurbishment project.

The timescale of the project was identified as a major risk in the business case as the project was subject to a time constraint pressure due to the DWP serving notice on their current property. This was a key factor in ensuring the project was progressed and had contributed to the overall poor governance.

The SWAP report said it was “for management to consider and determine whether any further action such as disciplinary action, should be taken against individual officers as it is clear there has been disregard for processes and procedures which has resulted in a significant overspend on the project”.

The report was due to be considered by the council’s audit and governance committee at a meeting this week (20 September).”

http://localgovernmentlawyer.co.uk/index.php

Thinking of buying a new, luxury retirement home? Think again

Buyer beware – that’s the message from the BBC Money Box Live programme today at midday. When buying a luxury retirement property a large part of your purchase price can disappear into thin air almost immediately!

“Half of new-build retirement homes sell at a loss.

Around half of new build retirement homes sold during a 10-year period were later re-sold at a loss, according to exclusive research for the BBC.
The research by the Elderly Accommodation Counsel charity found falls in value could be more than 50%.

It looked at thousands of Land Registry records for resale details of homes built between 1998 and 2012. The charity found many properties built after 2002 had underperformed the general property market.

Adam Hillier of the Elderly Accommodation Counsel (EAC), which advises people considering retirement housing, called the scale of the falls “startling”.

Steep falls

According to the research, 51% of retirement properties built and sold between 2000 and 2010, and then sold again between 2006 and 2016, suffered a loss in value. For those properties which declined in value, the average loss was 17%. For some, the falls are much steeper.

The EAC found that for new build retirement properties sold between 2005 and 2007, and then resold between 2012 and 2014, more than four fifths fell in value. The average loss for these properties was 25%.

Mr Hillier said it was unclear why it was happening. “It’s the million dollar question, really. “I think part of it is the new build premium – especially when it comes to retirement housing,” he said. Another reason could be under-investment from developers once they have built the properties, he said.

“The traditional model was to hand over these properties to a managing agent to run them,” he said. “Does the developer have that much of an interest in investing in the property?” The trend has continued in recent years too. For new retirement properties sold between 2008 and 2010, and then resold between 2015 and 2017, nearly two thirds were sold for less than the purchase price. The average loss here was 19%.

Money Box spoke to the residents of one development – Burlington Court, in Bridlington in East Yorkshire – where prices have more than halved since it was first built around a decade ago.

According to Land Registry figures, one flat in Burlington Court, bought new in 2006 for £166,000, was resold for just £70,000 in 2014. Another two bedroom apartment bought for £140,000, in 2008, was sold last year for £58,000.

Ken, 91, bought his flat in Burlington Court for around £180,000 in 2008.
“I thought when I bought this that if I lived for another five or six years, my children would get maybe £190,000 for it,” he said. “In actual fact they’ll be lucky to get £70,000 for it, maybe even £60,000. “It’s criminal really. When I mention it other people, they say: ‘Why should you worry, you won’t be here?’ “But I do feel my son and daughter have lost out. It’s a lot of money,” he added.

Margarete, 92, paid nearly £150,000 for her flat eleven years ago. She sold a detached bungalow in York. Like most residents of Burlington Court, she says it’s a nice place to live, with a nice community of people. But Margarete says she’s always wanted to move back to Germany, where she was born. However the value of her property means that isn’t now an option.

“My friends in Germany always wanted me to go back.” “But if I get £40,000 for this flat I’d be lucky. I couldn’t afford to go back to Germany and buy a place there.”

Incentives

The largest developer of retirement homes, McCarthy and Stone, told the BBC that the numbers did not include incentives given to the original buyers, which effectively lowers the purchase price. The company also said it had worked hard to increase resale values in recent years, including extending leases, retaining management of developments, and providing sales support.
“The vast majority of our retirement apartments increase in value on resale”, McCarthy and Stone told the BBC in a statement.

“It is also important to understand that the value of specialist retirement housing is not purely financial. It improves lives, provides peace of mind, care and support and ultimately helps older people maintain their independence.

“However, we recognise that there are a small number of cases, particularly with our older properties, where resale values of some apartments haven’t performed as we would have wished. This can be down to many reasons, including the performance of some local property markets.”
McCarthy and Stone, which also built Burlington Court, said resale values in that particular development had been hit by a lack of car parking spaces and a difficult local property market.

‘Seriously wrong’

Sebastian O’Kelly, director of BetterRetirementHousing.com, said: “Dismal resale prices for retirement properties help explain why only 2% of over-65s live in designated retirement properties – far less than the US or Australia. “Something is seriously wrong with the business model that these flats fall so drastically in value.

“The retirement housing sector will not expand notably until this is addressed. That would be more effective than attempting to deny that the problem exists.”

Listen to the full report on Money Box, midday on Saturday 9 September on BBC Radio 4.”

PegasusLife one-bed properties at Knowle could start at anything from £300,000 – £400,000 at their current prices. At their development in Cheltenham, one bed apartments start at £447,950. Service charges can start in the high thousands per year.

https://www.pegasuslife.co.uk/portfolio/onebayshillrd-cheltenham?gclid=CjwKEAjwos7NBRCW0uTH59WPp1ESJADKk0J7tjhYgbZJtyWb_Yh9_aSvbzYMEUyOMeif0jANw2xGRRoCiEjw_wcB

Closer to home, Millbrook Village in Exeter comes in at a very cheap (!)£325,000 for one bedroom, but this may be because sales appear to have been somewhat slow:

http://www.millbrookvillage.co.uk/

“How will councils survive the funding abyss?” (Especially if they are in hock to a vanity project!)

Not to mention re-routing roads in Exmouth so developers can make more money!

“No one in Westminster can say how local authorities will be funded after 2020

From struggling northern councils to seemingly prosperous counties, talk of a financial meltdown is getting louder. “It looks as though we’re approaching a cliff edge and no one has any idea how to stop us hurtling over it,” warns Nick Forbes, senior vice-chair of the Local Government Association (LGA) and Labour leader of Newcastle city council. It is a sentiment echoed across the political spectrum.

For once, it is not the dire prospect of failing to reach a Brexit trade deal which is exercising the minds of local politicians, but rather the consequences of an inconclusive general election. The resulting stasis in government has left English councils in financial limbo, staring into an abyss. Bluntly, no one in government can say how authorities will be funded after 2020 when they were all supposed to become self-financing.

Business rates plan raises fears of greater inequality among councils
Former chancellor George Osborne’s big idea was to set councils free of Whitehall – minus multibillion-pound grants – by handing them back business rate revenue raised locally, instead of redistributing it centrally. Since 2013, councils have kept 50%, which yields £26bn nationally. In his 2016 budget Osborne proclaimed that, compared with 2010 when 80% of council funding came through Whitehall, 100% of local government resources would come from councils themselves by 2020 – “raised locally, spent locally, invested locally”. An alluring prospect?

Some fell for it, foolishly believing this would mythically fill a looming £2.6bn social care funding gap, likely by 2020 on LGA calculations. In reality, the consequences were dire. Without a redistribution formula to compensate councils in poorer areas with boarded-up high streets and, consequently, small tax bases yielding low business rates, some authorities would struggle to balance their books – a legal requirement (unlike the NHS or Whitehall departments). Alongside this financial “devolution” came a sting in the tail: a multimillion pound central government revenue support grant, a mainstay of council funding, would be phased out.

But Osborne’s grand design crashed when a local government finance bill, the delivery mechanism, fell in the run-up to the June election. It has not been resurrected. The resulting Queen’s speech omitted to mention the proposed legislation.

Forbes highlights the dilemma. While Newcastle, ostensibly with the highest business tax base in the north-east, raises £154m a year from business rates, he estimates it would still be £16m a year worse off than under the current grant regime. By contrast, Westminster city council would be the ultimate winner – raising £1.8bn annually.

Such disparities were being addressed in a “fair funding review” involving senior civil servants and local government professionals earlier this year alongside discussions on the practicalities of devolving business rates to councils by 2020. But since June there has been a deafening silence in Whitehall. No meetings have taken place. “There was a relatively advanced debate about how the 100% retention [of business rates] would work – and a debate within local government about what kind of criteria is needed for some kind of redistribution mechanism,” says Forbes. “We were gearing up over the next few years to work with government. And all of what has collapsed.”

The result is one almighty mess. Professional bodies, such as the organisation representing senior council finance officers – the Chartered Institute of Public Finance and Accountancy (Cipfa) – are close to despair. English local government is facing the worst of all outcomes: the phasing out of a central revenue support grant without the compensation of a locally held business rate underpinned by a yet-to-be defined redistribution formula, in which rich councils would have to help compensate the poorest.

Having seen their budgets chopped by at least a third since 2010 in the name of austerity, councils are already facing their biggest financial crisis. This is compounded by funding for adult and children’s social care consuming two-thirds of their budgets, with other once-essential services slashed or axed.

Confusion reigns. Already three areas, Greater Manchester, Liverpool city region and London are piloting the full, local 100% business rate regime, buoyed by – presumably interim – government funding to ensure they do not lose out. Other pilots were promised. But there is doubt over whether the full devolution of business rates will ever happen.

If that’s the case, Forbes wonders what the pilot areas are meant to be piloting? For its part, the LGA has one concern: “Where’s the Plan B?” asks Forbes. No one can answer. The clock is ticking.”

https://www.theguardian.com/society/2017/sep/05/how-will-councils-survive-funding-abyss

Knowle objections to Inspector must be in by Wednesday this week

Residents have until Wednesday (September 6) to make their representations after a developer appealed the refusal of its plans for a 113-home retirement community at Knowle.

Deadline looms on developer’s Knowle planning appeal

PUBLISHED: 19:32 03 September 2017 Stephen Sumner
Residents have until Wednesday (September 6) to make their representations after a developer appealed the refusal of its plans for a 113-home retirement community at Knowle.

PegasusLife’s proposals for the site of East Devon District Council’s (EDDC) current HQ were denied permission last year.

The Planning Inspectorate’s five-day inquiry to hear the appeal is set to open on November 28. It is not clear when a decision will be reached.

EDDC’s development management committee defied officer advice to refuse the scheme – arguing it represents a departure from Knowle’s 50-home allocation in the authority’s Local Plan.

Members also objected to the scale, height, bulk and massing of the proposed development. The developer has set out its arguments for the inquiry and will say it is ‘thoughtful and considered’.

EDDC said the development would result in a loss of light and privacy for adjoining properties, although PegasusLife says it will only ‘materially impact’ Hillcrest.

It will claim the development will not have a direct impact on Knowle’s listed summerhouse and that the scheme’s benefits outweigh any potential harm to it.

There was also a dispute with EDDC about whether the scheme should be classed as C2, care accommodation, or C3, housing, and PegasusLife will maintain that it should be the former. If the planning inspector agrees, it will not need to provide any ‘affordable’ housing or community funding for the town.

PegasusLife will argue that there is a ‘compelling need’ for extra care accommodation in East Devon. It says the development will be tailored to meet the needs of occupants as they age, with on-site communal facilities.

Under the proposals, there will also be a compulsory healthcare needs package for all residents, and an age restriction on the properties so at least one occupant is aged over 60.

The deal with PegasusLife is worth £7.505million to EDDC, subject to planning permission, although councillors have voted to press ahead with the authority’s £10million relocation to Exmouth and Honiton before any payment is made.

Comments on the application can be made at https://acp.planninginspectorate.gov.uk with appeal code 3177340.

http://www.sidmouthherald.co.uk/news/deadline-looms-on-developer-s-knowle-planning-appeal-1-5177063