ANALYSIS  ⁄  DEMOCRACY & GOVERNANCE

£55 million Guildhall shopping centre decision may breach local government transparency rules

Exeter City Council decision to purchase and redevelop shopping centre may be unlawful, ineffective and subject to judicial review, increasing already significant commercial investment risks.

EXETER CITY COUNCIL   HOUSING   PROPERTY DEVELOPMENT   LIVEABLE EXETER   ACCOUNTABILITY & TRANSPARENCY   DEMOCRATIC DEFICIT   EXETER CITY CENTRE  

The final bill for the new St. Sidwell’s Point leisure centre has not yet been published, but was already expected to reach £42 million by this time last year. Since then costs have risen and the total is likely to be significantly higher.

Exeter City Council nevertheless decided to purchase and redevelop the Guildhall shopping centre in October, at an expected cost of £55 million, to include the construction of new build to rent accommodation above the retail space.

The council took the decision in private, apparently without complying with local government transparency regulations.

It already owned the freehold interest in the 300,000 square feet shopping centre: the purchase involved the leasehold interest, which includes the 440 space multi-storey Paul Street car park.

Apart from the public interest in the use of public money which local government transparency regulations are intended to protect, decisions taken in breach of these regulations may be unlawful and ineffective, could constitute maladministration and may be subject to judicial review, placing the council’s finances at risk.

Local authorities are required by law to publish at least 28 clear days’ notice of their intention to hold any part of an executive meeting in private. Such notices must include an explanation of the reasons for holding the meeting in private and details of the issue to be discussed.

The rules also entitle anyone to make representations as to why the meeting should be open to the public, based on those details. Then, at least five clear days before the meeting, the local authority must publish another notice which must include its justification for excluding the public, any representations received and the council’s response to those representations.

When the meeting is convened its voting members (who are all elected councillors) must then decide whether to hold it in private or not.

The government said it introduced the current rules because the previous regulations “resulted in more meetings being held in private than could be properly justified on the basis of well founded reasons”.

It added that the new regulations “materially strengthen transparency and openness, by providing a clear presumption that all meetings of the executives, their committees or sub committees, must be held in public except in limited prescribed circumstances”.

The £55 million Guildhall shopping centre decision was recommended by an executive meeting on 5 October last year before being approved at a meeting of the full council on 18 October. Both meetings discussed the matter in private.

However notice of the council’s intention to exclude the press and public from the executive meeting was not published until 24 September, just ten clear days before the meeting took place, and only 23 clear days before the council approved the executive’s recommendation.

The only details provided by the notice were: “Acquisition of property to support Liveable Exeter - To consider the report of the Director Finance”. These do not supply sufficient “particulars of the matter”, as required by the legislation, to make representations as to why the meeting should not be held in private.

We challenged the council on its failure to provide 28 days’ clear notice of the private meeting, but were told that it was not required. We also submitted representations objecting to the private meeting, but neither notice of these representations nor any response from the council was ever published.

The council’s leisure and retail investments represent major financial risks to the city.

There has been concern in central government over council investment in commercial property for several years. The risks involved are considered to be severe in some cases.

We now face of a cost of living crisis which is likely to see disposable incomes fall faster than they have for half a century with stagflation depressing the economy for years to come. The chancellor is unlikely to address the situation adequately in tomorrow’s spring statement.

The end of pandemic business support, rising employers’ national insurance rates and staff shortages which show no sign of abating are also challenging retail and leisure businesses. And that’s without inflation that is likely to exceed 8%, perhaps more, by the end of the year.

All those who back the council’s balance sheets via their council tax or business rates payments, or stand to bear the brunt of loss of public services, will be adversely affected if things go wrong.

The public interest in council borrowing and investment, especially decisions involving such large sums of public money, could hardly be more pressing. The council should not be seeking to keep such decisions secret whether doing so breaches the regulations or not.


 is editor of Exeter Observer and a director of its publisher Exeter Observer Limited.

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