Is the Council buying land a bad thing?
On the 1st November 2012 the Somerset Standard ran a ‘Letters Special’ on the recent decision by Frome Town Council to purchase part of the Saxonvale Development site from the Homes and Communities Agency (HCA). Two of these letters were from Conservative Councillors who had opposed the decision and two of the letters made wider, party-political points about other issues.
This articles answers specific questions raised with the facts. If you want to know more please leave a comment or get in touch.
IfF FETE facts
Should the Town Council be getting involved in property speculation?
Well, if that were the prime motivation then No. However, the focus of this decision was to safeguard the future of Frome Education and Training Enterprise (FETE). The potential and likely outcome of a profit which can be ploughed back in investment in the town made it an easier decision to reach.
In addition there is no harm in the Council owning its assets in land rather than as cash in the bank as long as there are significant enough cash reserves to cover costs.
The Town Council will borrow the money to purchase the land because it is in a position to borrow incredibly cheaply, because that doesn’t tie up resources that could be spent elsewhere and because it will expect to make much more than the total cost of borrowing when the land is sold.
The Town Council might make a loss – what then?
It is theoretically possible that the Town Council could make a loss on the land if it chose to sell at the wrong time. However, the land was bought at below market value for commercial/industrial land so even if it were sold immediately at a commercial rate no loss will be made.
One contributor comments on the need to save FETE:
“I personally doubt this is necessary as assurances had already been given by the developers and the HCA about the future of the centre”
The real issue is that the HCA, which inherited the land from it predecessor the Regional Development Agency, did not have the resources to focus on Frome. The HCA had been very clear that, while it wanted to see FETE continue, it had to sell the land and wanted to do so without a sitting tenant. Mendip District and Somerset County Councils were not in a position to buy. The HCA were prepared to help finance a move for FETE but they needed to sell too quickly for FETE to relocate. No assurances had been given by any developer.
Is this IfF trying to prevent a retail development on Saxonvale?
No. All the councillors who agreed this purchase are clear that the land would be sold to any developer who had obtained planning permission for a whole site development that meets the widely approved Planning Brief. On the other hand, if Mendip District, in its ultimate wisdom and drawing on its usual level of understanding of Frome issues, decided to approve a development that did not meet the agreed planning brief FTC’s ownership of this plot of land gives the people of the town the option to stand up to the decision makers.
IfF is a group of independent councillors. Neither as individuals nor as a group, have we been asked to have a view on the nature of retail development on Saxonvale. The council (not IfF group or individuals) have expressed our support for the current Planning Brief, but suggesting IfF is trying to prevent anything, misrepresents both the nature of IfF and the workings of the Council.
Has the purchase really been made without due diligence?
No, of course not. A lengthy legal process has been underway to understand the issues associated with the specific piece of land and the buildings it contains. Legal experts have been involved and no corners have been cut. A number of surveys have been carried out, and previous surveys obtained and studied. Could we make that any clearer?
Why not move FETE to the Cheese and Grain?
We have looked at this option but it would mean spending more money on the building specifically to accommodate FETE which does not attract any income. It would also mean changing the service level agreement with the charitable organisation that runs the C&G who have their own plans for the building that would have to be put aside. That doesn’t rule out such above in the future – it’s just not a viable option now.
Why have I not heard about this before. Why wasn’t I consulted?
Because of the nature of the sale it had to be agreed ‘behind closed doors’. The decision also had to be made within a short time frame. Consultation doesn’t mean making every decision by referendum (see FTC’s updated Community Engagement Strategy). On this occasion we took, from the Vision for Frome Community Plan, the need to provide learning and training opportunities (Young people Aim 3) and the desire for the town to have control over the Saxonvale site (Land use, Food, Energy and Waste Aim 1) as part of the decision making process.
It was also important to ensure that negotiations had reached an advanced stage before potential rival bidders might attempt to undermine the Council’s decision to purchase the land and buildings. This is why the leaking of these negotiations from a confidential session of the Council is a particularly serious breach of rules.
An IfF councillor is chair of FETE is that why the Council bought the land?
Toby Eliot (Keyford ward) is the current chair of the FETE partnership. This did not influence the decision to purchase the land. Toby had no involvement with FETE until after becoming a Town Councillor in May 2011. Toby was asked to be chair before attending his first meeting.
Toby declared an interest every time the Saxonvale land was discussed and did not vote on the decision to go ahead with the purchase.
Speaking to the IfF website Toby said:
“FETE is a small group of education and training providers who work in partnership to provide the people of Frome with opportunities and resources that wouldn’t otherwise exist. I got involved because FETE requested a Town Council representative and because I have some professional knowledge and interest in this area. I’m delighted that the town council has made the bold move to purchase the land and guarantee FETE’s immediate future. I very much hope that now this has been resolved the organisation can move on to meeting a wider range of the education and training needs of the town’s people (young or otherwise) and businesses.”
Of course despite the title of recent letters in the Somerset Standard being ‘Saxonvale site bid’ there were a range of issues covered in these letters. Key amongst these is that there was a suggestion that questions were going ‘unanswered’. It is true that for legal reasons there has been a specific question that Councillors and the Council have been unable to answer in relation to the previous Chief Executive. If you’ve got questions you want answers to please let us know. If we can’t answered them we promise to let you know why.