The Scrutiny Board is requested to note the call-in request and to consider confidential recommendations, in the report, which were approved by Cabinet on 18th November 2024 and which were subsequently call-in by Councillors Kenyon and Al-Hamdani.
Minutes:
The Calling-in Member addressed the Scrutiny Board and explained the reasons why they have called-in the Cabinet’s decision. The Calling-in Member suggested that the decision falls outside the council’s agreed budget and there is not enough information on which to make this decision. There is a lack of information on the exploration of other options, namely the search for a commercial option. The Member also questioned the timeline for the development and whether this was realistic. He noted that the legal report suggested that the timeline could not be met, and questioned if that was the case, why more time could not have been taken by Cabinet in making the decision.
The Cabinet Member for Housing and Licensing explained the background of the decision. The inclusion of the Princes Gate site will deliver around 295 new homes to push forward with the delivery of the town centre regeneration masterplan supported by Brownfield Housing Land Grant secured on the site to help delivery. The Cabinet Member highlighted that the decision was an opportunity to work towards addressing the housing crisis the Council were currently facing and was in line with the aims of additional of brownfield development. The Cabinet Member addressed the shift commercial to residential focus in the development and suggested that this was because of a lack of demand for commercial properties. The Cabinet Member set out the key milestone dates of the development and explained that the council were currently on track to meet the next milestone and start work in August 2025 and drawdown on the grant. The Board heard that the grant funding could be lost if timelines were not met.
The Director of Economy and Muse representative presented to the Scrutiny Board some additional detail behind the decision highlighting key points;
• Development Framework approved by Cabinet in November 2024
• £5.55m Brownfield grant funding secured
• £3.15m One Public Estate grant funding secured – works on site at Former Leisure Centre
• Market engagement progressing at pace
• Mechanism within MDA to include Prince’s Gate
• Inclusion of Princes Gate within the MDA provides a unique opportunity to transform a key gateway location
• Scheme designs across core sites and Prince’s Gate progressing at pace
• Positioning of masterplan in strongest place to secure investor interest and grant funding
The Calling-in Member was given the opportunity to ask questions of the Cabinet Member, Director of Economy and Muse representative. He queried whether there was further information on the lack of commercial demand, as there was nothing in the report to evidence this claim or demonstrate attempts to search for commercial partners. Officers explained that previous attempts to develop commercial property on the site had been unsuccessful and gave examples of LIDL and Marks & Spencer’s but accepted that search attempts had not been sufficiently evidenced within the cabinet report.
The Calling-in Member stressed concerns over the decision as he understands that there is no gateway to include the Princes Gate site in the Master Development Agreement which may leave the Council open to legal challenge. Officers stated that the inclusion of the site was covered by the ability to add to the plan for ‘Additional Services needed’ and housing would fall under an additional service that was needed in Oldham. The Calling-in Member disagreed with the interpretation and suggested that housing has always been a need in Oldham and is not something additional that have emerged since the publication of the plan.
When questioned on the Councils plans on underwriting Muse, the officers explained that the details of the £5m underwrite amount had not been established yet, and this would be done as part of the next phase once the decision had been taken by Cabinet. Officers stated that they could not confirm whether there would be capital or revenue implications, but did confirm that the underwrite amount was capped at £5m.
The Calling-in Member expressed concerns of legal challenge and officers stated that although there is a level of risk, this is considered to be low and mitigating actions have been taken.
Next, Members of the Scrutiny Board were given the opportunity to ask questions of the Director of Economy and the Cabinet Member.
Members welcomed the notion of additional brownfield development but questioned whether officers were confident that the properties could be sold and raised concerns that they may be left unoccupied. The Muse representative explained that they have undergone a market engagement process and established that the demand for the properties is there. They noted that the ongoing regeneration in the town centre is changing the market and that they are confident of positive outcomes with the development at Princes Gate.
In response to Member questioning, officers stated that they could not provide specific costings of the price of the properties this early in the process, but as per the grant conditions a large proportion of them would fall into the ‘affordable’ bracket.
Members shared some of the concerns of the calling-in Member, and further questioned officers on the Council’s plan to underwrite Muse and whether the Council would suffer losses if development was not completed. Officers confirmed that the council would be liable to pay the £5m, but that it was a shared risk and Muse would be investing £7.5m into the development plan themselves. Officers also noted that if the Council were to attempt to complete the planning work that Muse have done themselves, this would cost them £7m.
Members noted that it had previously been confirmed at Full Council that the Council would not be underwriting the development. When questioned as to whether other developers were made aware of the possibility of the proposed underwriting, officers confirmed that they were not as it was not part of the initial plans.
Scrutiny Board members queried the pollution levels of the area. Officers explained that there was no breach as far as they were aware, but they would take the question away and investigate it further.
Board Members were given the opportunity to question the Calling-in Member but no questions were raised.
Next, the Scrutiny Board debated the issue.
Board Members raised concerns over budget issues, with many in agreement that that £5m due to be set aside for underwriting the development, could be utilised in other ways. Also on the subject of budget concerns, Members expressed concern over the potential loss of the £5m if the build does not come to fruition. They questioned Muse’s confidence in the project as there is a need for financial security. Officers explained that shared risk was common practice, but Members were not satisfied with this answer. Members argued that there should be more clarity on why the development was not underwritten from the start, when the decision was taken to underwrite and why the decision was taken.
Some Members shared the concerns of the Calling-in Member on the potential legal challenge of the delegation relating to the proposed underwrite. They suggested that the potential risks had not been sufficiently addressed in the report.
Members of the Scrutiny Board agreed that the lack of commercial viability of the site had not been sufficiently evidenced in the report. Some Members noted that previously the site was thought to be viable for retail properties and evidence should be provided to explain the transition to a predominately led residential scheme as opposed to a mixed-use site.
Members shared some of the concerns raised by the Calling-in Member in respect of the legal definition of the term ‘additional services’ and suggested that further clarity was provided to ensure that the council are not vulnerable to legal challenge.
The Calling-in Member was given the opportunity to respond to any relevant points raised during the debate. He repeated some of the concerns he had already highlighted and stated that he believed the decision making process on this occasion was fundamentally flawed and would be open to legal challenge.
Officers were given the opportunity to respond to the debate. They addressed some of the concerns raised and reiterated the answers they had already given. There officers stressed that there was an urgent need and demand for Housing in Oldham, and the demand for commercial property was lacking. They also highlighted the shared risk in the development being underwritten, was common for this type of development.
RESOLVED that, the Scrutiny Board will refer the decision back Cabinet to determine at its next available meeting, with the following recommendations;