Councillor Rofique U. Ahmed declared a personal interest in Agenda item 7.2 “33-37 The Oval Bethnal Green Gasholders Site E3” (CAB 039/089) and the exempt/ confidential appendix thereto, Agenda item 17.1 (CAB 051/089). The declaration of interest was made on the basis that Councillor Ahmed was a former Chair of the Planning Committee/ Strategic Development Committee which had considered aspects of this matter relating to planning consent.

Councillor S. Eatondeclared a personal interest in Agenda item 7.2 “33-37 The Oval Bethnal Green Gasholders Site E3” (CAB 039/089) and the exempt/ confidential appendix thereto, Agenda item 17.1 (CAB 051/089). The declaration of interest was made on the basis that the report contained recommendations relating to the Bethnal Green North area and Councillor Eaton was a Ward member for Bethnal Green North.

Resolved:

1.         That the Corporate Director Development & Renewal be authorised, after consultation with the Lead Member for Resources and Assistant Chief Executive (Legal Services), to enter into a conditional agreement (subject to the revocation [planning consent]) with the Developer to acquire land known as 33-37 The Oval, as identified on the plan attached at Appendix A to the report (CAB 039/089); and

2.         That the Chief Executive be instructed to commission a comprehensive investigation to establish whether the Authority has put in place adequate controls to prevent a recurrence of the procedural errors, referred to in the body of the report (CAB 039/089).

Action by:

INTERIM CORPORATE DIRECTOR DEVELOPMENT & RENEWAL

(P. EVANS)

Service Head Asset Strategy, Capital Delivery and Corporate Property Services – Development and Renewal (A. Algar)

CHIEF EXECUTIVE (M. SMITH) [Resolution 2.]

Councillor Rofique U. Ahmed declared a personal interest in Agenda item 7.2 “33-37 The Oval Bethnal Green Gasholders Site E3” (CAB 039/089) and the exempt/ confidential appendix thereto, Agenda item 17.1 (CAB 051/089). The declaration of interest was made on the basis that Councillor Ahmed was a former Chair of the Planning Committee/ Strategic Development Committee which had considered aspects of this matter relating to planning consent.

Councillor S. Eatondeclared a personal interest in Agenda item 7.2 “33-37 The Oval Bethnal Green Gasholders Site E3” (CAB 039/089) and the exempt/ confidential appendix thereto, Agenda item 17.1 (CAB 051/089). The declaration of interest was made on the basis that the report contained recommendations relating to the Bethnal Green North area and Councillor Eaton was a Ward member for Bethnal Green North.

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

·                    Briefly summarised the salient points contained therein:-

o                    Outlining the background to this matter: planning consent granted to a developer, by the Authority, for a mixed business and residential use scheme for the site at 33-37 The Oval. The consent was vulnerable to challenge by the Health and Safety Executive due to an administrative oversight that resulted in failure to consult the HSE (the site being in close proximity to a notifiable National Grid gas storage installation).

o                    Outlining the options open to the Authority and their associated implications, should the Authority’s Strategic Development Committee determine that original planning consent should be revoked, now presented for Cabinet consideration:

¨             To allow the Planning Process to take its course and eventually reach the point of statutory compensation to the developer.

¨             To take action to acquire the land from the developer at a cost detailed in the confidential part of the agenda.

On balance Officers considered that the latter option was a preferable course of action, leaving the Authority free to optimise the positive aspects of the site in due course.

·                    Addressing the matters raised by the Overview and Scrutiny Committee, held on 9^th September 2008, in relation to the report; as set out in the tabled sheet of questions and comments presented by the Chair of the Overview and Scrutiny Committee earlier in the proceedings.

Councillor Francis, Lead Member Housing and Development:

·                    Commented that he had found the contents of the report absolutely depressing, particularly when contrasted with the uplifting nature of the proposals contained in Agenda item 7.1 “Resourcing Youth Services” and when reflecting upon the opportunity cost of devoting resources to compensation payments rather than such improvements in service delivery.

·                    Acknowledged that a mistake had been made by an Officer of the Authority and the Council as a whole must take responsibility for that, and specifically for the liability resulting from it, in the same way it took credit for the good work of Officers, for example in maximising the benefits to the Community arising from the planning process (Section 106).

·                    Considered that of the options presented he preferred that of cutting the Authority’s losses and paying the developer off, in return for which it would acquire the site, an asset that could be put to positive use and in the long term potentially generate a capital receipt.

·                    Acknowledged that Councillor Eaton had been correct to raise concerns regarding this matter at the Strategic Development Committee and to pursue these with vigour, although this would not have mitigated the Authority’s position in any way.

Mr Evans, Interim Corporate Director Development and Renewal, and Mr Kiely, Service Head Development Control and Building Control – Development and Renewal, at the request of the Chair, responded to requests for clarification/ assurance, in relation to a number of matters as follows:

·                    Whether the circumstances of the case had been examined in detail, weaknesses in process identified, and measures were now in place to prevent the recurrence of such errors.

·                    Managerial accountability and the presence of Legal Services and Planning Services in the circumstances leading to the current position in relation to this matter.

·                    Consideration that although the Authority was responsible as a whole, for the administrative errors identified and any liability arising in this matter, the fault appeared to lie with the actions of an individual Officer and consequently the Authority should explore avenues to recoup any financial loss including the potential to secure compensation from sinkage funds maintained by professional bodies for the purposes of professional indemnity.

The Chair sought an absolute assurance from Mr Smith, Chief Executive, that appropriate lessons had been learned from what had happened in this case and that safeguards were now in place to prevent a repetition of such a serious mistake and opportunity costs of such magnitude, in the future.

Mr Smith, Chief Executive, responded by saying that Officers had outlined the background, current options and circumstances of the case, however he was conscious that three years had passed since the original investigation into this matter  He therefore suggested that the Cabinet may wish to instruct him to commission a comprehensive investigation to establish how this situation arose and to assure Members that all appropriate management action had been taken to put in place adequate controls to prevent a future recurrence of the errors set out in the report.

The Chair:

·                    Summarised that there was a consensus that, if possible, the Authority should act to acquire the site at 33-37 The Oval from the developer.

·                    Considered that the Authority should undertake the investigation suggested by the Chief Executive to protect the interests of the Community and future generations.

·                    Moved the following motion accordingly for the consideration of members of the Cabinet:

“

1.                  That the recommendation set out in paragraph 2.2 of the report be agreed.

2.                  That the Chief Executive be instructed to commission a comprehensive investigation to establish whether the Authority has put in place adequate controls to prevent a recurrence of the procedural errors, referred to in the report.”

and it was:

Resolved:

1.         That the Corporate Director Development & Renewal be authorised, after consultation with the Lead Member for Resources and Assistant Chief Executive (Legal Services), to enter into a conditional agreement (subject to the revocation [planning consent]) with the Developer to acquire land known as 33-37 The Oval, as identified on the plan attached at Appendix A to the report (CAB 039/089); and

2.         That the Chief Executive be instructed to commission a comprehensive investigation to establish whether the Authority has put in place adequate controls to prevent a recurrence of the procedural errors, referred to in the body of the report (CAB 039/089).