STOP the Land Swap - it's a rotten deal!
Details of the legal contract negotiated between Oldham Council and WRT Developments: the 'Land Swap Deal'
Oldham Council will acquire the Diggle site & sell WRT Developments a long 999 year lease on the existing school site in Uppermill limited to residential use. WRT will then grant a lease on the Uppermill site for a 2 year term (while the school at Uppermill is still in operation). WRT Developments is expected to submit a planning application for the residential development of the Uppermill site within 3 months of the completion of this deal. [See site valuation reports opposite , obtained by FOI]
However, the lease on the Uppermill site is subject to:
- The Council obtaining Secretary of State consent under Section 77 of the School Standards and Framework Act 1998 and Schedule 14 to the Education Act 2011. “In the event that consent is not forthcoming the Council would have the ability to make cash payment for the former WH Shaw Pallet Site.”
- Planning permission being obtained for the residential development submitted by WRT Developments. “In the event the planning permission for residential development of the existing Saddleworth School Site is not forthcoming, the council would have the ability to make cash payment for the former W H Shaw Pallet Site.”
Oldham Council have promised a 'cash payment' equivalent to the market value of the Diggle site (>£ 5 million) if legal consents are not obtained.
This agreement proposes to transfer Oldham Council's interest in the existing school's site to another party before either acquiring the necessary consents or the school vacating the Uppermill site. All of which the Government advises Local Authorities not to do.
Council officers have therefore had to give assurances to the owner of the Diggle site, that should any of these consents and approvals not be obtained, that the Council are able to make a cash payment for the Diggle site.
Since WRT Developments bought the whole site in 2007 for just over £5 million, the Council are promising over £5 m of public money - is this an appropriate promise for a so-called cash-strapped Local Authority to have made ?
Unlawful predetermination?
In order to obtain the purported £2.019 million capital receipt (the difference in value between the Uppermill & Diggle site):
Council officers have effectively predetermined the future approval of any future WRT planning application for residential development, which is contrary to their statutory duty. At the same time, they have promised a payment of public funds - this may well be beyond the remits of the power they have: has this future potental 'spend' been approved? If so where is it coming from? Do Council officers have the right to promise a private developer such a large amount of public money? Is this lawful?
All members of any future planning committee would have a conflict of interest - they would have a vested interest in approving any application for residential development from WRT (since otherwise the Council would have to 'find' >£5 million of public money)!
More that £6 million - the true cost of moving the school to Diggle!
Capital receipt down from £2.019m to £1.860m ....& decreasing?
Oldham Council have misled the public about the financial benefits of moving the school to Diggle. In March 2015, Oldham Council decided to prefer the Diggle site over the Uppermill site, due to the capital receipt of just over £2m which they believed would cover the costs of the new school build in Diggle. However, Oldham Council Capital Budget reports show that since February 2016 OMBC have known that the expected capital receipt of £2.019m will not be sufficient to cover the full costs of building the new school in Diggle, but that further funds would be approved from their capital reserves as required. Capital Budget reports from February 2018 reduced the land swap receipt down to £1.086m and the most recent Capital Budget reports from February 2019, fails to mention what the current amount of the land swap capital receipt is. Has this omission been made to hide a further reduction from the public whilst these applications are being deliberated?
Even without considering the >5 million 'cash payment' the Council are committed to paying to WRT Developments if consents & planning permission are not forthcoming, the cost of moving the school to Diggle STILL costs more than Uppermill:
- Uppermill: £0.521m from existing capital reserves
- Diggle: at least £0.8m from existing capital reserves [£2.656 m (costs) - £1.860 (capital receipt)]. Also add the unknown cost (£???,???) for the work to move the retaining wall at the entrance to Diggle - part of the accepted road scheme design but excluded from the planning application & excluded from the cost comparison from the start.
See cost comparison table here: Costs to Council_Diggle v Uppermill
Therefore, adding 'cash payment' of over £5 million to the above figures, the total cost to the Council of moving the school to Diggle = over £6 million compared to £0.5 million to re-build the school in Uppermill.
How can Oldham Council justify that this is “value for money” when it would only cost the Council £520,724 to build the same school in Uppermill, with little or no disruption to teaching?