A report which was set to go before Newham Council’s cabinet on Thursday, March 22 – the last before May’s election – outlines plans to form a subsidiary company into which the council’s assets could be transferred.
These are understood to include council-owned homes rather commercial buildings such as community and leisure centres.
It states that the development vehicle will “own and manage current/future property holding interests”, and claims that the subsidiary company would provide an “immediate benefit”.
The new company would be created in a similar manner to Red Door Ventures, Newham Council’s property development company that was established in 2014, in being owned by the council but having a separate board of directors.
The plan also outlines the formation of a community interest organisation, which would be independent of the council, designed to promote and facilitate the provision of affordable homes”.
The report was published on Newham Council’s website earlier this week but has since been taken down.
A council spokeswoman said: “An early report for a proposed review of the management of property assets went to cabinet on December 21, 2017 and was agreed by the mayor in consultation with cabinet.
“Following up on this, an item for the report looking at options for the council’s land and property assets was published on the forward plan in error.
“It has now been removed as the options are still being explored and subject to further legal and financial advice.”
It is unknown whether an updated report will be prepared in time to go before cabinet members on March 22, with the agenda not due to be published until next week.
Minutes from the December cabinet meeting show that the mayor of Newham, Sir Robin Wales, agreed in consultation with cabinet members “to undertake a thorough review of the council’s current property arrangements”.
It added: “The mayor stated the he had for some time been concerned that companies that the council created and its property owning interests should have the appropriate governance structure.”
A report presented to members ahead of that meeting explains that “the council’s property interests are currently held in a variety of arrangements and distinct asset delivery vehicles”.
Concerns about the proposal to transfer the buildings and land to the subsidiary company have been raised by Cllr Rokhsana Fiaz, who questioned who would be appointed to the board – and therefore have control of what happens to the buildings.
She said: “I’m extremely alarmed that Robin Wales plans to set up a private development company and then give it our assets.
“They could be our libraries, community centres, allotments, leisure centres and the council’s own office.
“There has been no consultation with councillors or residents, no democratic oversight and this is all during an ongoing QC’s inquiry into how a private company Newham set up [E20 Partnership] lost £52m on the Olympic Stadium.
“If this went ahead it would stop a future mayor of Newham using our own land to build council homes and other facilities for our residents.”
But Sir Robin defended the plans, saying: “The options set out in the report are just some of the ways that council officers are investigating ways to protect public assets, particularly housing, from a further extension of Right to Buy legislation by the Tories, but those investigations are ongoing and not complete.
“I asked officers to investigate ways to protect our assets to reduce the risks of legislation further depleting our housing stock, which would also affect our revenue at a time of severe local government cuts.
“The proposals set out a company completely owned by the council; there is no doubt that land assets will stay under Newham Council and are not going to a private company.”
He also called questions about libraries and allotments “complete nonsense” and added: “I call on Rokhsana for a public debate of our policies on housing and securing the council’s budget during severe Tory cuts.”
Source: Newham Recorder