(L.10) Bromley Council - Policy and Resources Committee Agenda

(two relevant items)

11 Part 1: Crystal Palace Eviction Costs
13 Part 1-Public, Item 4: Second Judicial Review - Crystal Palace

Doc. Ref. BT 99094
11 PART 1

LONDON BOROUGH OF BROMLEY

COMMITTEE:	POLICY & RESOURCES COMMITTEE
DATE:	28th JULY 1999
SUBJECT:	CRYSTAL PALACE: EVICTION COSTS
CHIEF OFFICERS:	BOROUGH TREASURER & CHIEF PROPERTY OFFICER
CONTACT OFFICERS:	David Bartlett extn. 4338
	Frank Whiting extn. 775 232
WARD:	ANERLEY

1. SUMMARY

To update Members on the latest position regarding the cost of securing the development site of the new Crystal Palace and evicting the illegal occupants.

2. RECOMMENDATIONS

The Committee is RECOMMENDED to:

(a) Note the costs incurred in the eviction of the illegal occupants from the site of the new Crystal Palace and other related landlord costs,

(b) Agree that a provision of £2.7m be made in the capital programme and that the expenditure be financed from capital receipts

(c) Authorise the Borough Secretary, in consultation with the Borough Treasurer, to take appropriate legal action if it is not possible to resolve outstanding issues in relation to the Under Sheriffs account.

3. INFORMATION (including Financial Considerations)

At the meeting of the Policy and Resources Committee on 20th January 1999, Members considered the implications arising from the illegal occupation of the Crystal Palace development site. The Committee confirmed their commitment to the development and agreed to the eviction of the illegal occupants proceeding at the earliest suitable opportunity based upon the estimated cost at that time of £2m. The estimate was based primarily upon information supplied by the Under Sheriff but Members were warned that the actual cost would depend upon the actions of those on the site and the extent of the tunnelling and other fortifications that had taken place. The final cost would always be determined by how quickly the Under Sheriff could scale down the use of expensive specialist staff and contractors.

The Chief Executive reported the outcome of the eviction to the Committee on 31st March. Members were informed in that report that the Council had incurred direct costs in relation to the security and fencing contractors and also the additional press support and publicity arrangements that had been previously approved by tile Committee. It was not possible to report the overall costs at that time as the Under Sheriff had not stibmitted his account, which covers not only the cost of his staff but other related costs including the various specialist contractors who are employed directly by him. These additional costs include the tree climbers / tree surgeons, ground work contractors, specialist plant hire, transport costs, accommodation, insurance and the tunnelling / rescue team.

The Under Sheriff submitted his account at the end of April for the total sum of £1,292,009 (including VAT). The Borough Treasurer responded on 27th May with a series of questions on the account as a number of the charges both by the Under Sheriff and his contractors required further explanation and in some cases justification. A payment on account of £900,000 was made on 6th May. The Under Sheriff replied to this letter on 27th May and a meeting was held on 8th Julne in an attempt to resolve outstanding matters. One point that was made by the Under Sheriff for the first time was that unlike other payments made by tile Council, it would not be possible for the Council to reclaim the VAT element. Customs and Excise has ruled that despite the fact that the Council has to pay the costs of the eviction, it is not deemed the recipient of the service as these are regarded as being supplied to the High. Sheriff. This situation has since been confirmed by KPMG, the Council's specialist VAT advisor. Where contractors are employed directly by the Council such as the security firm and the fencing contractor, then VAT is recoverable in the usual way.

Agreement on the Under Sheriff's account have still not been concluded as Officers have still not been able to obtain satisfactory explanations to all the points that have been raised. Tile latest position will be reported at the meeting. If it is riot possible to reach agreement on the account then it may be necessary to submit it to an assessment hearing for adjudication.

In addition to the Under Sheriff's account, the Council has incurred a number of costs directly. Although these were in the main incurred at or around the time of the eviction many of them would have been incurred as normal landlord costs prior to any new development although the level of security costs is clearly higher than usual because of the threat of further illegal entry. Officers have reviewed all the costs associated with clearing and securing the site and have estimated the split over those incurred as part of the eviction and the other more usual landlord costs as follows :

Eviction related	£'000
Under Sheriff	1,304
Council's security contractor	865
Media /publicity costs	18
Counsel/legal fees	8
Other	14
subtotal	2,209
Other Landlord Costs
Fencing the site	30
Ongoing security (including bus terminus)	306
Subway repossession and security	73
Other	3
subtotal	412
TOTAL	2621

The above table includes all costs that have been incurred to date and also makes provision for ongoing security costs until the developer assumes responsibility on 1st October (Ed. my highlight) under the terms of the Development Agreement. The subway is not part of the development site nor was it included in the court order for repossession. The cost of its repossession and security is therefore shown separately as a landlord cost

When the cost of the eviction was first considered by the Committee in July 1998, Members were informed that all expenditure would he identified separately in the accounts and funded initially from the Council's revenue balances and ultimately be financed in one of the following ways:

(a) remain as a charge against revenue balances

(b) be set against the capital receipt arising from tile development or from the Council's general pool of accumulated capital receipts, or

(c) subject to any limits imposed by the Government, added to next year's Council Tax requirement

The District Auditor has confirmed that she does not have any objection to the eviction costs being capitalised, therefore the Borough Treasurer recommends that the cost be met from capital receipts. It is suggested that provision be made in the capital programme for £2.7m to cover both the cost of the eviction and the normal landlord responsibilities.

4. LEGAL CONSIDERATIONS

Advice has been taken from a Costs Draftsman that the queries being raised by Officers in relation to the Under Sherff's account are reasonable and that in relation to certain items in the account, insufficient information has been supplied. If agreement cannot be reached on the balance of the outstanding account then the Council would request the Under Sheriff to apply to the Court to determine the account at a hearing where the Council could make representations concerning the disputed items. A judgement will therefore need to he made on the likely cost of these proceedings compared to the possible outcome.

5. WARD MEMBERS' VIEWS

Not applicable.

6. PERSONNEL /POLICY/CORPORATE PLAN/SERVICE PLAN CONSIDERATIONS

None arising directly from this report.

Top of No. 11
Press release 23rd August 1999

LONDON BOROUGH OF BROMLEY

COMMITTEE:	POLICY & RESOURCES
DATE:	28th JULY 1999
SUBJECT:	BOROUGH SECRETARY'S GENERAL REPORT
CHIEF OFFICERS:	BOROUGH SECRETARY
CONTACT OFFICERS:	LYNN HILL extn. 4338
WARD:	N/A

4 - SECOND JUDICIAL REVIEW CRYSTAL PALACE

As rnembers are already aware permission has been granted to Diane Barker a local resident to seak a judicial review against the Council's decision to grant planning permission in respect of certain reserved matters for the new Crystal Palace Development. The three main grounds relate to: 

a) Failure to have an environmental assessment; 

b) Failure to establish a nead (as opposed to a demand) for the development;

c) Transport issues generally.

Leading Counsel has been asked to advise whether the grant of permission should be challenged. If it is not challenged then a full hearing could take place in the Autumn.

5/8/99 Last updated 28/8/99