| Topic: | Reply | |
| Posted by: | Gordon Southwell | |
| Date/Time: | 24/06/26 19:10:00 |
It is probably worth going over what actually happened here because there seems to be a fairly profound misunderstanding of the situation. I'm not sure where Simon got the idea that I said the council hadn't borrowed any money to fund this — borrowing more was the whole point. The council can get funds from Public Works Loan Board (PWLB) at relatively low rates. It took out a huge loan to fund Broadway Living which would have had to pay higher rates if it went to the market. I can't claim to fully understand why it was done this way but it is safe to assume that there was a regulatory constraint which prevented the council just borrowing the money and developing properties directly. In 2014 doing it through an arms length management company was the only practical way. My guess would be that the government of the time thought it was a good way to encourage councils to be more entrepreneurial — a terrible idea in my view. There were really two choices for the council — operate within existing constraints and build less housing or use this convoluted structure to get value out of the council's land bank. I can almost imagine the meeting in which this was agreed talking about the huge potential gains due to Crossrail and HS2. This would have made perfect sense at the time. It is possible that the only alternative to this structure was to sell landbank to developers. Quick and easy in terms of raising money but I can understand why it would have been felt that the council would have been short changed if this had been the approach. While I always thought Broadway Living was a bad idea, I have to admit I am not putting forward any sensible ideas as to what the right thing to do would have been but neither are those who are the most critical of the council about this. It would be interesting to hear an informed view about what they should have done instead. |