• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • WMCA signs £4bn investment agreement with L&G

    May 18, 2022

  • Bill will give UK Infrastructure Bank power to lend directly to councils

    May 18, 2022

  • £400bn pension group collaborates on climate transition initiative

    May 17, 2022

  • CIPFA rejects proposal for vote on publication of fraud hub report

    May 17, 2022

  • John Turnbull elected president of the SLT

    May 12, 2022

  • Pension pool identifies biodiversity as a priority

    May 11, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

Haringey mulls £3m cost to scrap controversial HDV

0
  • by Colin Marrs
  • in 151 News · Development
  • — 12 Jul, 2018

Scrapping London Borough of Haringey’s disputed regeneration vehicle is set to cost taxpayers more than £3m — including a payment of half a million pounds to its preferred joint venture partner — according to a council report.

The council’s cabinet will meet next week to consider an internal document that recommends discontinuation of procurement processes for the Haringey Development Vehicle, which was set to redevelop council housing and provide a long-term income stream for the borough.

A report by officers said that if councillors approve the move, the authority will be liable to pay £520,275 to Lendlease, the company selected as the preferred partner for the HDV.


Room151’s Annual Conference – September 20th, 2018, London Stock Exchange
Local Authority Treasurers’ Investment Forum and FDs’ Summit

“… extremely useful, covered important current treasury issues and is an absolute ‘must’ for treasury mangers.”
Treasury Management Accountant, Swale Borough Council


The report said that: “…during the preferred bidder stage, it was agreed that certain work needed to be undertaken in advance of the project agreements being entered into, referred to as ‘agreed costs’ and that these agreed costs would be met by Lendlease prior to establishment of the HDV and then be rolled into the HDV once established.

“If cabinet agrees the recommendations, the council’s share of the agreed costs will therefore need to be reimbursed to Lendlease.”

According to the report, the council’s draft statement of accounts for 2017–18 includes recognition of a contingent liability in relation to the potential closure of the HDV.

However, this was not a provision, and the council is proposing to meet its £520,000 share of agreed costs from increased income to the general fund, “arising from the actioned transfer of commercial properties from the HRA, which was not incorporated in to the 2018–19 budget”.

The report also said that Haringey has spent an additional £2.5m, excluding staff costs, on commercial advice, legal support, project management and other expenditure relating to the HDV since 2014.

However, the report added that “some of this spend will have resulted in useful outputs for the future, notably in promoting greater efficiencies, debt recoveries and safety and other compliance of its commercial property portfolio”.

In addition to the £2.5m  costs and £520,000 payment to Lendlease, the council would need to make cuts of £250,000 a year from its regeneration, planning and development directorate to make up a shortfall arising from any decision to scrap the HDV, the report said.

This was the amount that the council originally budgeted as a saving on management of the council’s commercial portfolio, which was earmarked for transfer to the HDV.

Separately, the council also racked up a £250,000 legal bill to fight a legal challenge against the HDV brought by a local group opposing the proposals.

The HDV was a key battle in May’s local elections, leading to the deselection and resignation of a number of Labour councillors who had supported the proposals.

The council’s new leadership, which was backed by Momentum during the election, is keen to see the back of the vehicle.

The report said: “The new administration does not object to outcomes anticipated by the HDV programme, nor does it object to the principle of partnerships with the private sector.

“But it takes a different view on the acceptability of the risks. In particular, the new administration is not prepared to accept the scale and nature of risk implied by the aggregated volume of the proposed HDV programme.”

In a letter sent to the council, Lendlease has warned the council to be careful over the proposal to scrap the HDV.

“The council will be aware that it must follow due process in fully and properly considering its obligations arising from this procurement,” Lendlease said.

“It must not take any decision which would be irrational, in particular in the context of the borough’s urgent need for housing — which requires very significant investment and capability.

“As the council, over a number of years, undertook a very extensive process, including consideration of various delivery options, we would have to question how the new cabinet, which has been in place for only a matter of weeks, could be in a position to be ready and able to make any significant change of direction.”

The council says that under the terms of the procurement it is legally entitled not to proceed with the HDV, because the final contract with Lendlease had not been signed.

Get the Room151 Newsletter

Share

You may also like...

  • Auditors call for more investment in finance function skills 25th Feb, 2022
  • Guarded welcome to Prudential Code revisions 28th Jan, 2022
  • CIPFA under pressure to publish fraud hub report 26th Apr, 2022
  • LGPS funds seeking to divest from Russia 3rd Mar, 2022

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 11 hours ago

    Back to the future for the PWLB: The Public Works Loan Board is tightening its lending criteria to ensure that loans will be repaid by local government borrowers. But, asks Peter Findlay, shouldn’t they have been doing[...] dlvr.it/SQcmmm pic.twitter.com/bVv4fe0Xlv

    Room151 11 hours ago

    Great piece from Peter Findlay on the PWLB’s tightening of its lending criteria. He raises some pointed questions for the Treasury and explains why the ‘casino council’ characterisation was simplistic and inaccurate. #PWLB #localgov room151.co.uk/treasury/back-…

    Room151 12 hours ago

    The Queen's speech highlighted the need for accelerating UK infrastructure investment into levelling up projects and cutting emissions. @UKInfraBank #QueensSpeech #ClimateAction #emissions Click the link below to read 🔻🔻 room151.co.uk/brief/bill-wil… pic.twitter.com/hFmF2veVIa

    Room151 12 hours ago

    Huge funding heading to the @WestMids_CA from @landg. @andy4wm #LevellingUp #netzero #regeneration Click the link below to read 🔻🔻 room151.co.uk/brief/wmca-sig… pic.twitter.com/ajhZhia6mx

    Room151 17 hours ago

    LGPS governance, Cagney and Lacey style: What regulatory response can be expected following the publication of the Good Governance project’s Phase 3 report and the closure of the Single Code of Practice consultation? Susan Black offers[...] dlvr.it/SQbfXf pic.twitter.com/xwqHOEu2AP

    Room151 2 days ago

    More evidence of the importance of emerging markets in the journey to net-zero. @BordertoCoast @BrunelPP @northernlgps @EAPensionFund @WYPF_LGPS Click the link below to read 🔻🔻 #LGPS #NetZero #NetZeroCarbon #EmergingMarkets room151.co.uk/brief/400bn-pe… pic.twitter.com/qCm0EGxzLn

    Room151 6 days ago

    ‘Urgent consultation’ issued in response to continuing audit delays: CIPFA and the Local Authority Scotland Accounts Advisory Committee (LASAAC) have announced another “urgent consultation” to consider proposals to address the latest issue that has led… dlvr.it/SQJ0kV pic.twitter.com/s6vw0bnGXO

    Room151 7 days ago

    Bags of capacity – now to housing delivery: HRAs have been freed up and councils are starting to invest, but some remain cautious, writes Steve Partridge. He suggests that a minimum of £10bn of additional borrowing could be[...] dlvr.it/SQDvxk pic.twitter.com/yZmoWzHv6U

    Room151 7 days ago

    Bags of capacity – now to housing delivery room151.co.uk/treasury/bags-…

    Room151 1 week ago

    To Michael Gove: a modest proposal: Conrad Hall has written an open letter to the levelling up secretary suggesting an unusual (and tongue-in-cheek) proposal to help councils predict next year’s government grant. Dear Secretary of State,[...] dlvr.it/SQ9GpX pic.twitter.com/mSX1xgeL8a

    Room151 1 week ago

    Queen’s Speech: an ambitious plan hampered by omissions: Richard Harbord examines the impact of the government’s legislative proposals on councils, and concludes that local authorities expect and need more from central government. However you view the… dlvr.it/SQ8hmP pic.twitter.com/BsnziyNPIO

  • Categories

    • 151 News
    • Agent 151
    • Audit
    • Blogs
    • Business rates
    • Chris Buss
    • Cllr John Clancy
    • Council tax
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Education
    • Forum
    • Funding
    • Governance
    • Graham Liddell
    • Housing
    • Ian O'Donnell
    • Infrastructure
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • Levelling up
    • LGPS
    • Mark Finnegan
    • Net Zero
    • Private markets
    • Recent Posts
    • Regulation
    • Resources
    • Responsible investing
    • Richard Harbord
    • Risk management
    • Social care
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Transport
    • Treasury
    • Uncategorized
    • William Bourne
  • Archives

    • 2022
    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Rob Whiteman: Rise of dealmaker CEOs puts governance skills ‘at risk’
  • Next story Can pension fund investments be ‘localised’?

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares