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February 2010 

West of Horsham Development Management Report - Society's response to redacted material


18 October 2009

Tom Crowley
Chief Executive
Horsham District Council
Park North
North Street
Horsham, RH12 1RL

Dear Tom

Freedom of Information Act 2000
Request for information – Land West of Horsham

I have been looking at the District Valuer's report which you gave me on Friday. As a general point I think it has probably been over redacted but I will give that further consideration.

The reason for asking for the report was to see whether the Council had sufficiently taken into account the District Valuer's independent view in coming to its recommendations regarding the heads of terms with Berkeley Homes. In other words has the Council got the best deal possible for the public given all the circumstances?

On the face of it this does not seem to be so. The District Valuer clearly says that he has taken a pessimistic view of sales, included the full currently understood S106 requirement, payments agreed to HDC/WSCC and possible extra costs (sewerage works, Highways) that could be faced by Berkeleys. He concludes that the development value is sufficient to meet all these and furthermore recommends a sales overage if revenue on the private units exceeds an undisclosed cost. In other words, he says that over the lifetime of the development Berkeleys can afford everything asked of them.

This judgement appears to contradict paragraph 2.4 of the Council's report to the Development Management Committee North of 16 June which suggests that were S106 costs to be at the upper end of what was possible it would "make the development unviable". This appears to be the opposite of the District Valuer's view.

A great deal hangs on the amount of affordable housing and the financial comparison between Berkeleys original offer and the Council's counter proposal. The redactions make it impossible to verify the Council's implied claim that it has struck a good deal on this account. If the final, redacted, paragraph of the appropriate section of the District Valuer's report contains his conclusion on this point then I would ask for this to be reinstated.

Given the District Valuer's conclusions it appears that the Council has struck a very bad deal. There was no prima facie need to cap the S106 payments because the DV had assumed in his worst case scenario that they were affordable. Crystallising one party’s risks in this way, coupled with a decision not to insist on a clawback if revenue on the private units exceeded the DV’s suggested threshold, represents a very considerable potential benefit to the developer (though of course how beneficial is unclear because of the redactions). Given the terms of DV's report and his conclusions, the Council had significant leverage in its negotiations with Berkeleys and it is therefore surprising that the Council did not come out of them with a better deal for the taxpayer. It would be interesting to know who the Council retained to advise on this process.

Furthermore, unless I have misunderstood the situation, it appears that the potential costs of the easements referred to in the Council's report to Cabinet of 3 September had already been factored in to the DV's viability assessment. Thus, by making the prior decision to cap Berkeleys' S106 costs, revenue which would otherwise have come to the Council, and which the DV has assessed as being affordable, has been lost. One can only speculate whether had this issue been understood at the time the Report of 16 June was considered the outcome would have been the same.

I recognise the importance to the Council and community of proceeding with this scheme. But it would be implausible on this evidence to reach any other conclusion but that the taxpayer has got a raw deal. The Council could arguably have afforded to wait; the other part of the scheme has a different developer who might have been prepared to move ahead more quickly, whereas Berkeleys is a house builder. Unless it is building houses it is not making any money.

It may be that within the redacted material there is evidence to show otherwise. If so I would ask you to reconsider whether it would be in the public interest to release it.

Otherwise, it may be that the only way in which it will be possible to determine whether the Council has acted wisely given all the evidence before it would be to refer the matter to the Local Government Ombudsman who would presumably have access to unredacted material and case notes etc.

Your letter refers somewhat elliptically to copyright. It is normal practice, certainly within Government, to publish the material that is released under the FOI Act. I assume therefore that there would be no objection to us publishing it in due course on our website.

Finally, I will not do anything further until you have had a chance to consider these points. We are due to meet on 10 November so we could discuss any points of clarification then.

Yours sincerely

John Steele

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