To receive any questions relating to items on the agenda from members of the public and replies thereto.
The Chairman read a list of questions on behalf of Mr Davey referring to the 3 Rivers Governance Report:
1. Given that two large national developers- Russell Harrison & McCarthy & Stone - having spent thousands of pounds on surveys, plans etc.. and with all their schemes, no matter how poor, being rubber stamped by MDDCs planning committee - have abandoned their schemes as they could see no profit, was a proper cost profit analysis carried out by an independent consultancy i.e not the council or it's architects ?
2. Given that 3Rivers was set up by the council largely as a result of a report by a finance director in order to develop this and other sites and has not and is unlikely to make a profit. Is it not time to liquidate 3 Rivers , go back to the drawing board and consult with groups like the Angel Project of which I was a co-founder- to try to salvage from this disaster a better scheme which improves the area and enhances the riverside?
3. The accountants estimate a more than three quarters of a million pounds overspend on this project, I think this is a gross under estimate. I believe that a one and a quarter million pounds overspend is more realistic given the fact that despite nearly three years since start of work on this site, all of the ground works are still not complete. What does the council intend to do as a matter of urgency, to staunch the haemorrhage of our -the council tax payers money ?
4. Given that most of the discussions around 3 Rivers and this scheme have been held in secret- to I believe save embarrassment of the council and some of top level management rather than any commercial considerations, when will the council hold a proper open meeting to discuss this fiasco and the implications for services in the future given the debt that will be incurred ?
The Deputy Chief Executive (S151) provided the following answers
1. After a national advert to find an architect capable to deliver an exemplar scheme to fit such a prominent site in Tiverton, the Council instructed Randall Simmonds LLP (professional construction consultants) to provide a budget cost sum analysis for the scheme. This value was very close to the final tendered price received by 3RDL after entering in to a negotiated contract with the current contractor. As many of you are aware this scheme (designed by Mikhail Riches - a London based architect) has already won a national design award (Housing Design).
2. This scheme was carefully selected by the Council in order to see the delivery of a project that would be of a very high design and build quality, maximising the sites location and vistas and would help to add increased footfall to that area of the Town centre. For clarification, 3RDL has already returned significant sums to the Council over the past 2 years and delivered its only completed scheme to date, on time and at its budgeted level of profit. I can confirm that the Council will continue to provide regular and diligent over sight on all current and future projects.
3. The Council is aware of a potential loss on this specific project and is currently working with its Development Company in order to be assured that the project is completed without further budgetary implications or time delay. Clearly, the whole commercial property market has been significantly impacted by Covid19, but it is encouraging to see a return to "business as normal" for most areas of the construction industry.
4. The Council continues to work with its Development Company and maintains an ongoing level of support for its operations. It has recently commissioned some external reports in to the ongoing governance and financial viability of the company and has made a number of recommendations that will be implemented at the earliest possibly opportunity. If lessons need to be learned from this one specific development, rest assured we will learn from them and then move forwards.
The Leader then made the following statement: There has been considerable mystery around the performance of 3 Rivers and the oversight of the company by the responsible officers at the Council. I do believe the time has come to lift the veil of secrecy and that we should have more transparency in our dealings not only with Members but with members of the public. You have heard in Mr Jarrett’s response that 3 Rivers has already returned significant sums to the Council over the past 2 years and delivered its only completed scheme to date on time at its level of profit. This is opaque speak in that not one penny has been returned to the Council by 3 Rivers over the past 2 years, every penny of interest due from 3 Rivers to the Council has had to be lent by the Council to 3 Rivers and remains outstanding within its total loan figure due to the Council. With regard to the completed scheme, although 3 Rivers should have paid the profit on that scheme of around £100,000 to the Council, in fact that sum was not repaid as it should have been, but was retained by 3 Rivers effectively reducing their borrowing requirement by that amount. Also as part of the response it has been said that a number of recommendations emanate from recent commissioned reports on the ongoing governance and financial viability of 3 Rivers will be implemented at the earliest possible opportunity. Members it is the view of myself supported by the Cabinet that where practicable, all of the recommendations not just a number will be implemented. In terms of the ongoing performance of 3 Rivers, we would trust that these recommendations will be implemented at the earliest possible opportunity as until they are, the company will not be getting a green light to go forward.