Old Street Police Station and Magistrates Court

Report: 05
Date: 13 February 2003
By: Treasurer

Summary

The report provides an update on actions following consideration of the disposal of Old Street at the last meeting of the Committee.

A. Recommendations

1. To note the ongoing actions to address issues in relation to the potential disposal of Old Street Police Station and Magistrates Court to CAP.

B. Supporting information

Introduction

1. At its last meeting the Committee received a number of reports detailing the issues in relation to the disposal of Old Street. This included a detailed statement of proposals by Community Advice Project (CAP) to establish a community courthouse initiative on the site in conjunction with a developer. The Equal Opportunities and Diversity Board had indicated its support for the project and would also recommend that the Authority supports the proposals.

2. The MPA had pursued the possibility of an off market disposal to CAP provided we could satisfy our legal requirement to secure best consideration under s123 of the 1972 Local Government Act. To this end the Authority had obtained a valuation from the District Valuer on the basis of an unconditional sale. However CAP’s offer was conditional on the granting of planning permission for the proposed development. The current valuation was not therefore an appropriate benchmark. The advice of the Director of Property Services was to go to the open market as the only reliable way of testing the conditional valuation.

3. I advised that if the Authority wished to deal exclusively with CAP rather than seek tenders on the open market there were two issues which needed to be explored further:

• The basis of a valuation which, in the circumstances, would represent best consideration for the purpose of s123. If there was a shortfall on the actual disposal we would have to consider any non-cash benefits; and
• The legal powers to incur expenditure or forego disposal value for the projected benefits.

4. Questions were also raised at the Committee’s meeting as to whether there were any alternative options for progressing the proposal within the GLA group of bodies.

Subsequent actions

5. It seemed appropriate to check out the potential for a solution involving other parts of the GLA as a priority since that could obviate the need to address the other issues. Accordingly I wrote to the Director of Finance and Performance at the GLA asking her to facilitate wider consideration within the GLA group. Information has been provided to the London Development Agency (LDA), which probably offers the only realistic option. I have as yet received no further feedback.

6. I have agreed with the Director of Property Services that we will approach the District Valuer to explore the scope for securing an alternative valuation on a conditional basis. If that is possible it will identify whether the cash consideration offered by CAP falls short of best consideration.

7. At that point we would need to consider the MPA’s legal powers for incurring an economic deficit, i.e. loss of disposal value. This would probably involve s111 of the 1972 Act, which allows the Authority to undertake activities incidental to its main functions, together with s6 of the 1996 Police Act which defines police authorities’ function to secure efficient and effective policing in their area. Similar considerations would therefore apply as with the Bow Street disposal and it is hoped that the legal advice on the latter will also assist with Old Street.

8. It should be stressed that the applicability of s111 is relatively narrow. If there is a disposal shortfall in cash terms we would have to define and seek to quantify the value of relevant non-cash benefits to establish whether they result in an overall disposal value which meets best consideration. If we cannot establish that, the Authority would have to seek the consent of the Secretary of State for a disposal in these circumstances. The financial impact of a requirement of GLMCA to receive their proportion of the disposal proceeds as if full consideration had been received in cash would also have to be brought into the equation.

9. I will write to CAP with a copy of this report to ensure that they are kept up to date.

C. Equality and diversity implications

An essential element of the CAP proposals is that they are aimed at supporting ethnic minority communities

D. Financial implications

A disposal to CAP on the basis proposed is likely to result in lower cash proceeds than could otherwise be received. This will have to be dealt with in accordance with the requirements of s123 of the 1972 Local Government Act.

E. Background papers

None

F. Contact details

Report author: Peter Martin, MPA.

For more information contact:

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

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