Councillor L Rahman declared a personal interest in Agenda item 6.3 “Compulsory Purchase Action for 4 Long-Term Vacant Properties” (CAB 020/089) and the exempt/ confidential appendix thereto Agenda item 16.1 (CAB 020/089). The declaration of interest was made on the basis that the report contained recommendations relating to the Spitalfields and Banglatown area and Councillor Rahman was a Ward member for Spitalfields and Banglatown.

Resolved

1.         That the land and buildings at 47 Brick Lane, 805 Commercial Road, 122 Bethnal Green Road, and 109 Wellington Row, as identified on the plan attached at Appendix 5 (Exempt/ confidential appendix – part two of the agenda), be made the subject of a Compulsory Purchase Order (CPO) under the provisions of Section 17 of the Housing Act 1985 for the purpose of providing housing accommodation;

2.         That the Assistant Chief Executive (Legal) be authorised, after consultation with the Lead Member Housing and Development, to take all necessary steps to:

(a)       make and obtain confirmation of the Compulsory Purchase Order

(b)       obtain possession of the properties and land following confirmation

(c)        complete the acquisition of the properties and land and effect immediate disposal in line with the Council’s strategic regeneration objectives;

3.         That a capital estimate of £1,590,000 within the Housing Investment Programme 2008/09 and 2009/10 be adopted to allow the purchase by the Authority of the Freehold interests in the properties referred to in resolution.1 above, inclusive of legal costs and possible interest payments on fees;

4.         That the Interim Corporate Director of Development & Renewal be authorised, after consultation with Lead Member Housing and Development to enter into negotiations to acquire the four properties by agreement, failing which a CPO will be made. The properties will then be sold on the open market with prospective purchasers entering into a binding legal agreement to renovate the properties and bring them back into residential use; and

5.         That the resources generated from the sale of the properties be used to regenerate the local area by bringing empty properties back into circulation.  They will therefore be 100% usable.  The receipts will then be earmarked from the Local Priorities Programme to retrospectively fund the purchase of the properties cited in resolution 1 above.

Action by:

INTERIM CORPORATE DIRECTOR DEVELOPMENT & RENEWAL

(P. EVANS)

Service Head, Major Project Development, Development and Renewal (O. Whalley)

Empty Property & Compulsory Purchase Officers, Development & Renewal (C. Ward) (J. Embleton)

Please note that the order of business was varied by resolution of the Cabinet earlier in the proceedings in order to allow this item to be considered following agenda item 5.1 “Overview and Scrutiny - Chair’s Advice of Key Issues or Questions in relation to Unrestricted Business to be considered”, however for ease of reference the deliberations of the Cabinet, and subsequent decisions taken, are set out below in the order detailed in the agenda.

Councillor L Rahman declared a personal interest in Agenda item 6.3 “Compulsory Purchase Action for 4 Long-Term Vacant Properties” (CAB 020/089) and the exempt/ confidential appendix thereto Agenda item 16.1 (CAB 020/089). The declaration of interest was made on the basis that the report contained recommendations relating to the Spitalfields and Banglatown area and Councillor Rahman was a Ward member for Spitalfields and Banglatown.

Mr Evans, Interim Corporate Director Development and Renewal, at the request of the Chair, in introducing the report:

·                         Addressed the matters raised by the Overview and Scrutiny Committee, held on 29th July 2008, in relation to the report; as set out in the tabled sheet of questions and comments presented on behalf of the Chair of the Overview and Scrutiny Committee earlier in the proceedings; and also the matters raised by the deputations in relation to the report earlier in the proceedings.

·                         Informed members of the Cabinet that:

o              Compulsory purchase was a longstanding policy of the Authority to bring empty properties into effective use, in relation to meeting housing need in the Borough, and to mitigate any detrimental impact to the local environment of properties in poor condition, and not to deprive owners of their property. The policy sat within a wider strategic context of achieving housing regeneration within the Borough.

o              That although Cabinet authorisation was being sought for compulsory purchase action by Officers of the Authority, in relation to 4 properties, should they secure action by the owners of these properties, which addressed the concerns of the Authority that had prompted the proposals, within a realistic timeframe, there would be no need to proceed with such action. They may also wish to consider specifying what such a realistic timeframe might be.

o              Paragraph 3.4 of the report contained a substantive error in detailing that the property at 805 Commercial Road had been empty for 15 years as the Authority’s records indicated this period to be approximately 10 years.

Councillor Francis, Lead Member Housing and Development:

·                    Commented that:

o                   The compulsory purchase proposals had emerged against a backdrop of an acute housing crisis in London and were part of a longer term strategy to raise the condition of property within the Borough to an appropriate level in order to optimise its usage and also to ensure the quality of neighbourhoods was maintained.

o              Over 400 long term empty properties had been identified in the Borough which indicated that the Authority’s current approach of encouraging voluntary action by property owners and using compulsory purchase powers as a last resort was not sufficiently effective. A more interventionist approach using existing compulsory purchase powers and new powers from Government in relation to compulsory leasing was required.  The response elicited from the deputations, by the compulsory purchase proposals: coming to Cabinet to explain why properties were empty and what action they intended to take, demonstrated the value of intervention in securing the desired outcome.

o              In pursuing the compulsory purchase proposals regarding the 4 properties, set out in the report, the Cabinet hoped to trigger a helpful process that would prompt the owners of the properties in question to make a good decision, one that would bring forward the renovation or alternatively disposal on the open market with or without the assistance of the Council.

o              Equally the owners of the properties concerned should be assured that the Cabinet in agreeing any proposals for compulsory purchase of their properties was not starting an unstoppable conveyer belt to a point where they would lose their property. He therefore considered it appropriate that the proposed recommendations should be amended so that no final decision to take compulsory purchase action could be taken by officers without first consulting with himself, as Lead Member, and his subsequent notification of Cabinet colleagues prior to such action.

Accordingly proposed an amendment to the recommendations set out in paragraphs 2.2 and 2.4 of the report, for the consideration of members of the Cabinet, as follows:-

“Recommendation 2.2

That the authorisation of the Assistant Chief Executive (Legal) to take all necessary steps, as set out in paragraph 2.2, be subject to prior consultation with the Lead Member Housing and Development.

Recommendation 2.4

That the authorisation of the Interim Corporate Director of Development & Renewal to take action, as set out in paragraph 2.4, be subject to prior consultation with the Lead Member Housing and Development.”

Mr Evans, Interim Corporate Director Development and Renewal, responded to a request for clarification regarding the timescale in which owners of the 4 properties, in respect of which authorisation was being sought for compulsory purchase action by Officers of the Authority, could reasonably be expected to demonstrate that they had put in place a viable plan to address the Authority’s concerns regarding their properties.

The Chair in Moving the recommendations set out in the report, taking account of the amendment proposed by Councillor Francis, urged the deputees present in the public gallery to engage with the Authority by submitting realistic proposals within a reasonable timescale that would address the concerns of the Authority and obviate any need to take compulsory purchase action in respect of their properties.

Councillor Peck, Lead Member Resources and Performance, noted at this juncture that no members of the Conservative Group were present at the meeting.

Resolved

1.         That the land and buildings at 47 Brick Lane, 805 Commercial Road, 122 Bethnal Green Road, and 109 Wellington Row, as identified on the plan attached at Appendix 5 (Exempt/ confidential appendix – part two of the agenda), be made the subject of a Compulsory Purchase Order (CPO) under the provisions of Section 17 of the Housing Act 1985 for the purpose of providing housing accommodation;

2.         That the Assistant Chief Executive (Legal) be authorised, after consultation with the Lead Member Housing and Development, to take all necessary steps to:

(a)       make and obtain confirmation of the Compulsory Purchase Order

(b)       obtain possession of the properties and land following confirmation

(c)        complete the acquisition of the properties and land and effect immediate disposal in line with the Council’s strategic regeneration objectives;

3.         That a capital estimate of £1,590,000 within the Housing Investment Programme 2008/09 and 2009/10 be adopted to allow the purchase by the Authority of the Freehold interests in the properties referred to in resolution.1 above, inclusive of legal costs and possible interest payments on fees;

4.         That the Interim Corporate Director of Development & Renewal be authorised, after consultation with Lead Member Housing and Development to enter into negotiations to acquire the four properties by agreement, failing which a CPO will be made. The properties will then be sold on the open market with prospective purchasers entering into a binding legal agreement to renovate the properties and bring them back into residential use; and

5.         That the resources generated from the sale of the properties be used to regenerate the local area by bringing empty properties back into circulation.  They will therefore be 100% usable.  The receipts will then be earmarked from the Local Priorities Programme to retrospectively fund the purchase of the properties cited in resolution 1 above.