The ‘this’ in the title of this article is The Mall and town-centre properties, bought on behalf of residents by the borough council. What follows is one of the Eye’s longer items – it’s about those 2016 purchases.
We’ve been listening to a YouTube recording of last week’s meeting of the council’s ‘Performance and Finance Scrutiny Committee’. Indeed, we’ve listened to some of it more than once.
Our particular interest is in Item 8 of the agenda, which addresses the unexcitingly-titled ‘Property Investment Task and Finish Group Final Report’. This report is an independent review of the decision-making progress that led to the purchase of The Mall (now The Square, of course) and other retail property. At the time, there was concern – probably quite rightly – that the then owners of The Mall were reluctant to maintain it fully and keep it up-to-date.
We don’t have access to the confidential details considered in the review, so what we’ve written below is our interpretation of publicly-available information.
The £86 million decision to buy The Mall was made by councillors after just one hour’s briefing. The briefing was limited to the choice between ‘buy’ and ‘not buy’; it didn’t consider any other options for maintaining/upgrading the shopping centre.
This briefing was inadequate. Quote: “the information and supporting narrative was not proportionate to the size of the investment decision. The internal paper lacked sufficient detail on options, benefits and risks.” Councillors “do not appear to have been provided with detailed decision-support documentation showing the case for public investment purpose,” Councillors were provided with a property valuation from just one source; a valuation that was at the top end of the market; one which apparently took no account of the trend towards on-line shopping.
A few months after the acquisition of The Mall, the then Chief Executive approved the purchase of the House of Fraser and associated buildings. The purchase was processed urgently, as another buyer was thought to be interested in the property. (Our understanding is that the ‘other buyer’ was the county council. If so, it’s difficult to see how residents could benefit from competition between the two councils.) The review’s assessment of this purchase came to conclusions somewhat similar to those in the previous paragraph.
What the review doesn’t conclude is that the purchases should not have been made. The main message is ‘only’ that the process by which they were approved was wholly inadequate. It is up to councillors – and residents – to judge whether the outcome was good or bad.
Which is where the recording of last week’s meeting becomes particularly interesting. The current council Leader said that he voted FOR the acquisition. But another councillor said that they voted against it because they felt that the briefing was inadequate for such a major purchase. A third councillor said that they had abstained for a similar reason – and that such a shambolic process (our words) should never be allowed to arise again.
Confusingly, the minutes of the meeting at which the current Leader said that he voted in support of the purchase record that he wasn’t present. This ‘discrepancy’ wasn’t resolved during last week’s meeting; but a public explanation is essential before public confidence is destroyed yet again.
Apart from highlighting the inadequacies of the decision-making process, last week’s meeting revealed a fundamental disagreement between councillors as to WHY The Mall was purchased. (We’re referring to those current councillors who were involved in the decision five years ago.) Was the acquisition intended to be an investment, generating income to offset reductions in grants from central government? Or was it to regenerate the town – in particular to maintain/update The Mall, which the then owners seemed reluctant to do?
We have no doubt about what the public was told. Here’s a quote from the council’s own website: “Karen Whelan, Chief Executive of Surrey Heath Borough Council said: “The Council’s investment in its own town centre is testament to its ambitions to make Camberley an exciting destination and ‘kick- start’ our regeneration proposals. These investments will help secure long term financial stability for the Council as government funding for local authorities is reduced. ”
Our conclusion from this and our recollection of other statements made by council personnel at the time is that regeneration was the short-term aim, and that income arising from the regeneration was the longer-term aim. So both councillors were partly right – and partly wrong
Finally, who or what to blame? Based on what we’ve read and heard, the borough council officers must be held primarily responsible; they provided councillors with an inadequate brief. Councillors are not elected on the basis of any professional skills, and they cannot be expected to decide on major investment proposals without a full – and easily understood – briefing. But, we suspect that some of the councillors voting in support of the purchase were not as critical of the inadequate briefing as they should have been. To the extent that this suspicion is correct, those councillors failed in their duty to the electorate.
Finally, and to be fair, telling the future is difficult. Even experts can get it wrong – as the pandemic has shown. But the net result is that the council’s town centre investments have dropped in value by – at a guess – £70 million. This compares with the borough council’s stated reserves of £32 million; a seriously-disturbing comparison.