The Musings Of An Independent Councillor

OWL Adrian Owens

asks “Why has the Borough Council granted a £20 million loan facility to their new Development Company? Our West Lancashire has already raised questions about links between Lord Derby’s Estate Director and Savills, the company that advised the Council in setting up its new house-building company.

“I still can’t tell you much about this new house-building company Tawd Valley Developments Ltd because the council reports are confidential. What I can tell you is that the council has agreed to invest £2 million of share capital into the new company. This struck me, OWL colleagues and even one Labour councillor, as the wrong way to provide funding to the company. A loan is much easier to extract from the company in the future.

“Of more immediate concern though, is that the Council has granted a £20 million loan facility to this new company. This sum is far in excess of what’s required to build the affordable housing in Skelmersdale that has been announced. Our West Lancashire moved an amendment to cut this figure in half and although 3 Labour councillors refused to support the whip on Labour councillors to vote against our amendment, it was still heavily defeated.

“So why is the council already authorising such a lending facility to this 100% owned Development company from day 1, when this is around £10 million more than its business plan requires? When officers were asked the question, no satisfactory answer was forthcoming.

“It doesn’t take much imagination to realise that the green belt sites proposed for release by the council in their controversial local plan proposals would be prime targets for the many millions of pounds that this new council Development Company has available. The Council may well be setting itself up to release green belt; buy the land; award itself planning permission and then develop the prime farmland in our communities”.

The answer may lie in Council Plan 2019/20 – 2020/21 Version 09.04.19

“Establishing a Development Company. Tawd Valley Developments Ltd is the new Development Company, wholly-owned by West Lancashire Borough Council. The company has been created in order to enter the development market in West Lancashire, to acquire and develop sites and deliver new homes for the residents of the borough, whilst making financial returns for the Council. The company is due to commence formal trading in 2019/20 and is in the process of establishing the governance and operational arrangements.

“The initial business plan is based on the proposed acquisition of a number of initial sites from West Lancashire Borough Council and a delivery of a mixture of market-for-sale properties and affordable homes. This plan is anticipated to be delivered over a five year period from winter 2019.

“Key aims over the first five years of operation have been identified to: provide quality, value for money, homes across a range of tenures for the people of West Lancashire; deliver new homes through effective procurement of suppliers and contractors; deliver financial returns which are able to be reinvested into further schemes; deliver financial returns for the Council as shareholder to the company”.

it might be assumed that “WLBC Ltd”, ie Tawd Valley Developments Ltd, building on sites owned by WLBC, will be uninterested in unaffordable, to them, greenfield land. We know the WLBC has a large register of land. If WLBC limits its entry into the “development market” to sites not attractive to bulk builders, Redrow et al, who is to say this will harm public finances?

Time will tell.

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