A bid to challenge Bath and North East Somerset Council’s sale of a building to its own development company at a £480,000 discount has failed.
117 Newbridge Hill in Bath | Image © Google 2021
Conservatives said the “gross” undervaluation of 117 Newbridge Hill was at best unjustified and at worst “financially irresponsible in the extreme”.
Councillor Richard Samuel, the Liberal Democrat cabinet member for resources who signed off on the sale, dismissed the challenge as “spurious and politically motivated”.
He said he had followed policies laid down by the council’s previous Tory administration, which created development company Aequus.
The former villa in Newbridge Hill, previously used as offices by the council, comes with planning permission for conversion into six flats.
It had been valued at £790,000 but is being sold to the firm for £308,000 so it does not become a single luxury home or rented out to students or tourists.
Critics said the private sector would have paid more to deliver the same scheme.
Vic Pritchard, the Conservative councillor who led a call-in signed only by Tories, told the scrutiny panel meeting on 8th February: “To sell at such a gross undervaluation is at best without any justification whatsoever, and at worst financially irresponsible in the extreme.
“It seems as if this administration is intent on wiping out the council’s asset portfolio in a single electoral term. What’s next, the Roman Baths? The Guildhall?
“This decision sets a dangerous and worrying precedent and undermines public trust.”
Independent councillor Colin Blackburn led two cross-party call-ins last year of property decisions made by Cllr Samuel – the sale of a “ransom strip” to Bath Cricket Club and the termination of an affordable housing provider’s lease that saw it handed £450,000.
“I wanted another show of cross-party unity,” said Cllr Blackburn.
“The call-in was rushed in to score points. This is of concern to councillors across all groups who fear our residents are being short-changed.
“The decision is unfair to all our residents at a time when monies are so tight. It needs to be reconsidered and I believe better value can be obtained for Bath and North East Somerset.”
Labour’s Cllr Eleanor Jackson added: “I have consistently opposed the council selling off the family silver, but here we have a situation where the silver seems to be classed as silver gilt, and the value of the property is distorted.”
The council will borrow money to lend to Aequus to buy the property off itself. The company will then repay the loan, with profits from the flats ultimately going into the council’s coffers.
Former Conservative councillor Bob Goodman, a chartered surveyor, said the business case was misleading, because a building with permission to be converted into six flats was “unquestionably” worth more than a single house.
He said: “The only reason this property is being sold at a knockdown price is to keep the failing development company going – at our expense.
“The decision to sell this property to Aequus at this price is a clear breach of the trust we give our elected representatives. This is quite simply shameful.”
Public speaker David Stubbs, a retired chartered valuation surveyor who has advised B&NES Council, said the flats could be worth up to £2million, and the return of 15 to 23 per cent was “not enough” when the project is “quite risky”.
“Why do this when the private sector would happily deliver six flats, and I think would pay you that price even with those conditions?” he said.
“My suspicion is the real reason for doing this is because Aequus are desperate for a pipeline of property and are unable to make a profit unless the purchase price is discounted.”
Cllr Samuel reminded the panel that Aequus was set up by the previous Tory administration and said it also made the decision to convert 117 Newbridge Hill into six flats.
“It’s entirely disingenuous for Conservative members to attack this administration for following through on a policy they initiated, amended and supported,” he said.
“My decision follows long-established council policy.
“The grounds for this call-in are spurious and politically motivated, and seek to question the professional advice both from officers and independent legal advisers. I entirely reject the grounds in the call-in notice and call on the panel to do the same.”
Panel chair Paul Myers said accusing his Conservative group of playing politics risked shutting down logical debate.
“Why is it we’re dragging out politics?” he asked.
“We have an unprecedented budget crisis. Just think what this money would be worth right now to a council that’s desperately cutting back services.”
Lib Dem panel member Alastair Singleton took a different view, saying: “The proposal will give in the longer term a greater financial benefit to council taxpayers of Bath and North East Somerset than to sell it on the open market now. Social and environmental benefits add to the value.”
The panel voted to reject the call-in and uphold the decision.
Stephen Sumner, Local Democracy Reporter
