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Criticism of “risky” proposals for new Lichfield District Council property company

Labour councillors have questioned “risky” proposals for Lichfield District Council to create its own property company.

Lichfield District Council House

Lichfield District Council House

The plans were confirmed at a recent meeting of the local authority.

But Labour representatives have accused the Conservatives of attempting to push through the plans to hide the fall-out from the failed Friarsgate scheme.

The city centre redevelopment scheme bit the dust after private funding failed to emerge after more than a decade and councillors eventually voted not to spend more than £45million underpinning the project after a series of behind closed door meetings.

However, the project did leave the taxpayer footing a £7million for the doomed scheme.

Cllr Sue Woodward

Cllr Sue Woodward

Cllr Sue Woodward, leader of the Labour opposition group said it was the wrong time to be rushing into a major financial commitment with local elections being less than a year away.

“The proposals to set up a local authority property are being rushed through and I suspect that is, at least in part, an attempt to hide Conservative embarrassment over the failure of their Friarsgate project,” she said.

“They feel that they must be seen to be doing something but this has all been done with great haste and insufficient transparency, either to members or local residents – again.

“The impacts of the Friarsgate collapse have barely been considered, as we see from the loss of the Marks and Spencer food store, so a period of calm reflection would be better. I’m not opposed in principle to this idea but it really does need a lot more consideration and public debate.

“This council only has a few more months to run and I think it’s inappropriate and undemocratic to commit to what will be a new council next May to the financial and other commitments being made.”

Missing councillors

A vote on the proposals was missed by a significant number of councillors – and Cllr Diane Evans believes any plan cannot be rushed through without thorough scrutiny by members representing all residents.

“The property market is notoriously risky and I am unhappy with the proposal given Lichfield District Council’s recent track record,” she said.

“I’m not convinced that there is a clear and shared understanding across the council of the implications of setting up a property company.

“We do not know either what the thinking behind it is or where the money is going to be spent.

“A recent briefing session was attended by less than a third of members and, for the final vote, 17 Conservatives were absent either having submitted apologies or having left early.

“The single Lib Dem member didn’t attend. This is totally unacceptable and electors deserve better.”

Lichfield Labour councillor Colin Ball, who is on the working group set up to decide what happens next on Friarsgate, said the Conservatives were once again ignoring the warning signs.

“I was dumbfounded that there were no questions raised by any of the Cabinet about this, when it first came forward on 4th September – and it was no better at the full council meeting this week.

“This, in my view, is potentially a very risky venture. I’ve looked at the risk rating and it suggests that this will all be a walk in the park, although everyone knows that commercial property management and building housing for sale is always very risky.”

Funding gap

Cllr Mike Wilcox

Cllr Mike Wilcox

Councillor Mike Wilcox, leader of Lichfield District Council, said the proposals were part of a strategy to help balance the books.

He said: “Late last year Cabinet and full council approved the council’s Property Investment Strategy, which sets out an ambition to invest in property and introduce a company to develop and manage residential property.

“The approach is set to help address the council’s funding gap, create local jobs and deliver some much needed affordable housing in the district.

“Since the approval of the strategy, officers have spent over six months reviewing options, learning from other councils and working with experts to shape detailed plans. This work and plans were outlined in the recent report to full council and we were delighted the proposals were approved.

“To deliver the plans, we will recruit professionals and introduce new governance arrangements, processes and practices to limit risk and provide ongoing assurance. This includes setting up a council-owned company to develop, sell and or lease residential properties, including some affordable homes.

“The company will be managed by a board of directors, and as the shareholder, the council will retain full control over how it operates, who it works with and what it delivers.

“Far from being unique, this is an approach more than half of councils nationwide have adopted to help balance their budgets in the face of the ongoing reduction and removal of core government funding, and it is something we feel we need to replicate in our own district for the benefit of our local residents and our local economy.

Limit the possible risk

Cllr Wilcox added that the local authority could not afford to stand still until the elections in May.

“Councils regularly make commitments that extend beyond the full term of a council,” he said. “A good example is the Local Plan, which was adopted in 2015 and will last until 2025.

“Our aim is to start relatively small, which will limit the possible risk, and provide time for the new company to mature and grow. It will also mean the council can monitor progress over the coming years and take action to shape and direct its future performance.

“Ultimately this approach could see the council generating up to £2.7million over the coming five years, which will help to safeguard local services and strengthen our local economy and support our communities.”

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6 Comments

  1. PeoplePower

    19th October, 2018 at 5:17 pm

    £2.7million every five years…that should only take about 13 years before Wilcox gives us our Friarsgate £7million back…

  2. Darryl

    19th October, 2018 at 5:30 pm

    Either I’m being obtuse or there’s a lack of detail.

    What does this even mean? LDC intend to create a company, limited by liability, to build or buy and rent houses and make money off the profit?

  3. LetsGiveItaSpin

    19th October, 2018 at 5:39 pm

    quote “He said: “Late last year Cabinet and full council approved the council’s Property Investment Strategy, which sets out an ambition to invest in property and introduce a company to develop and manage residential property. ”

    Hello Mr Wilcox… You already have this its called Bromford Housing Association plus midland heart , orbit , sanctuary housing i can see the officers are playing at experts again trying to justify existence. My advise to LDC is that you keep your mits out of property and achieve being able to collect bins efficiently, provide better planning services and sort out the top heavy management structure. I would suggest that you speak to your Labour council neighbours at Cannock …

  4. Dawn

    19th October, 2018 at 7:23 pm

    For me the most telling words uttered by our Fuhrer are “This includes setting up a council-owned company to develop, sell and or lease residential properties, including some affordable homes.”
    To me, “including some affordable homes” means as usual the tory run council running this limited company will be more commercially aware than socially aware and we will end up with what we already have and that’s land developed for the old and the affluent.

    And as an aside, I would not trust Cllr Mike Wilcox with another penny of our council tax until he has paid back the 7m he owes. If this was some single mom who had taken the tax payers for over paid benefits she would soon have all the power of the state machine looking for recompense. Proof positive we are not and never have been all in this together.

  5. Thinker

    23rd October, 2018 at 1:57 pm

    I wouldn’t trust that lot to rum an ice cream stall. Let’s get real.

  6. Debbie S

    23rd October, 2018 at 3:48 pm

    Oooo i dont know …. until very recently a current LDC councillor was an undeclared director of a property development company!

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