The community advice project - Old Street Magistrates Court

Report: 6
Date: 5 July 2001
By: Clerk and the Treasurer

Summary

This report describes a proposal from the Community Advice Project for their future use of the Old Street Magistrates Court. It invites in principle agreement from the Committee to this proposal, to enable further discussions to be held on how this might be achieved.

A. Recommendations

1. The Committee considers whether to give an in principle commitment to sell its interest in the Old Street Magistrates Court and police station building to the Community Advice Project, in conjunction with the Greater London Magistrates Courts Authority.
2. Subject to one above, the MPS Director of Property Services be authorised to establish an acceptable market value on the basis of sale to a single bidder and that further discussions be held between the interested parties to develop viable proposals.

B. Supporting information

The building

1. This property consists of a courthouse and MPS accommodation. The courthouse was vacated in 1999 and remains empty, but the MPS occupation continues. The whole building will become vacant when the current MPS use moves to Leman Street. This move is planned by September this year.

2. The property originally formed part of the Receiver's estate. With the formation of the MPA and the forthcoming establishment of the Greater London Magistrates Court Authority (GLMCA) in April 2001, the ownership was separated. The MPA holds the freehold of the whole site and the GLMCA has a 99 year lease of the courthouse accommodation. The intention is to dispose of the building once it is empty, with the capital receipt shared between the MPA and the GLMCA proportionate to their respective interests in the building (55 per cent for the MPA).

3. This is a grade 2 listed building which has implications for both its future use and its market value.

The Community Advice Project

4. The Community Advice Project (CAP) is the charitable arm of the Society of Black Lawyers. It is proposing to establish a "Community Courthouse" at Old Street. This initiative looks to address the need to educate minority ethnic communities about the law and the legal system as a way of building bridges, increasing understanding and breaking down barriers. The key objectives of the Courthouse would be to:

• "re-establish the link between the legal system and the community;
• serve as a conduit for information and education between the law and the community, thereby providing a renewed community focus;
• address the low level of public knowledge about the courts and the legal system as a means of removing a formidable obstacle to collaboration between the legal system and communities;
• act as a community resource and a vehicle for change;
• change the culture and perception amongst minority ethnic communities of the justice system".

Although the project is based in Hackney because key programmes are run there, it is a pan-London initiative.

5. CAP has been actively working towards these objectives by developing projects, programmes and services which promote collaboration between the various justice agencies, whilst at the same time fostering inclusiveness and positive relationships with minority ethnic communities. Other related projects could be developed at Old Street by CAP. Of particular relevance to the MPA and the MPS would be the piloting of a specialist police recruitment centre for ethnic minorities and involvement in a youth justice education programme. Both the Commissioner of the MPS and the Commissioner of the City of London Police have been very supportive of the project and were signatories to a Single Regeneration Budget (SRB) bid for funding.

6. CAP has so far raised the following funding:

• £50,000 from the Youth Justice Board
• £200,000 per annum from 2001/02 under round 6 of the Single Regeneration Budget

The project is also confident of raising regional development funding and that other funding sources could also be accessed with more certainty over its premises. Additionally, the various projects to be located in the building would attract funding in their own right and indeed have already secured funding from a variety of sources.

Discussions so far and the present position

7. CAP opened discussions with the Inner London Magistrates Court Service (the predecessor of the GLMCA) in 2000, initially seeking a temporary lease of the courts accommodation. CAP subsequently confirmed that they would like to acquire the freehold for the whole site.

8. At that time it was anticipated that the MPS would need to retain use of the building until late 2001, with the maximum period of availability for CAP up to summer 2002. Despite the ILMCS being supportive of the project, agreement could not be reached on the length of a rent free period to take account of the works CAP would need to bring the building into use.

9. To CAP's understandable frustration, further progress was hindered by the hiatus caused by the formation of the MPA and the GLMCA. Bringing forward the date when the MPS is likely to vacate the building to September 2001 has made a short term lease an unrealistic option.

10. In April this year, the MPA's Estates Sub-Group received a presentation from CAP on their proposals. Members were supportive of the project, and felt a further meeting was needed between the interested parties – the MPA, GLMCA and CAP - to explore the issues. This meeting took place on 19 June 2001. Nicholas Long, Graham Tope and Rachel Whittaker represented the MPA. CAP were also accompanied by Renaisi, who are an independent not for profit company specialising in the design, development and implementation of regeneration projects.

11. In summary, CAP restated their desire to purchase the Old Street building. Timing is clearly an issue as the £200,000 SRB funding has to be spent in the current financial year. At present they do not have capital funding to purchase the building but are confident of raising this once they know how much is needed. They would need to know the position by September or October, for instance so that they could bid for the next round of regional development funding. They expect to know whether they have been successful by January 2002.

12. Like all public bodies, both the MPA and the GLMCA have a fiduciary duty to obtain the best consideration when disposing of public assets. In this situation, when the future use is uncertain, the open market value is established by inviting competitive bids. CAP are concerned that such an approach to disposal would prejudice the project because of the uncertainties involved and the possibility of incurring abortive costs. They would argue that if the MPA and the GLMCA accept the value of the project and are committed to it, then the concept of social capital should be taken into account alongside financial considerations.

13. The MPS Director of Property Services attended the meeting on 19 June and advised on sale options. He confirmed that at present there is little flexibility in achieving best value on disposals. However it is possible to sell to a single bidder by way of the District Valuer providing an independent market value. Discussions would then be held with the District Auditor for an indication of whether they were satisfied about the approach being adopted. He commented that the listed building status, and the consequent requirement to retain internal features of the building, will have an impact on both market value and the possible uses the building could be put to. It may be that the use proposed by CAP is one of the few that would be compatible. He offered to make an assessment of market value and to discuss this with the District Auditor, by the end of August, so that discussions could continue on a more informed basis.

14. It is difficult to estimate the best open market value of the premises because the change of use would need to be confirmed. This will depend on what planning permission can be obtained and may require a planning appeal. The local authority is considering designating the area as a business/employment zone, which adds to the uncertainty. The uncertainties affecting the future use of the site are such that normally tenders would be invited on the basis of bidders obtaining the necessary planning permission.

Decision sought from the Committee

15. At this stage, the Committee is asked whether it is prepared to give the Authority's in principle commitment to the Community Advice Project's request to purchase the Old Street building, in anticipation of a successful bid for capital funding. In doing so, the Committee would be authorising the MPS Director of Property Services to establish an acceptable market value with the District Valuer and to inform the District Auditor of progress; and for discussions to continue with CAP on the basis of sale to a single bidder.

16. In reaching a decision, the Committee should be aware that such an approach will inevitably lead to a delay in disposing of the building and achieving a capital receipt whilst negotations are continued and CAP raises capital funding. At the appropriate time the Authority will need to be assured that this capital funding is sufficient to meet market value and that CAP have a viable business plan.

17. The GLMCA representatives have indicated that, provided the statutory requirements on disposal are satisfied, they anticipate that the GLMCA would agree this approach. In the event of CAP being unsuccessful in their application for capital funding, the property would be sold jointly with the GLMCA by competitive tender.

18. The Committee are also asked to agree that Nicholas Long, Graham Tope and Rachel Whittaker continue discussions with CAP and the GLMCA on the Authority's behalf. A further meeting has been arranged for 12 July.

C. Financial implications

The MPA is under a duty to achieve best consideration when disposing of property. The Director of Property Services has addressed this issue in the context of disposal to a single bidder based on an independent open market valuation provided by the District Valuer. It is intended to inform the District Auditor of the rationale for this approach.

The anticipated capital receipt from disposal of the site has not been included in the funding forecast for the 2001/02 and future years' capital programmes.

D. Background papers

Proposal from Community Advice Project for use of the Old Street building.

E. Contact details

The author of this report is Simon Vile.

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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