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Masthead Local Govt - Governance and Risk

Ex-Lord Chief Justice clears officers and members at council over CPO powers

The former Lord Chief Justice, Lord Dyson, has cleared officers and members of Lewisham Council of impropriety following an inquiry into allegations about the local authority’s proposed use of compulsory purchase powers for land near Millwall Football Club’s stadium.

The independent inquiry was set up after allegations about the development and the planned CPO for the 30-acre site at New Bermondsey / Surrey Canal were published in The Guardian newspaper in 2017.

The background - as set out in Lord Dyson's report - was that in March 2012 the council had resolved in principle, but subject to certain conditions, to make a CPO in respect of those parts of the site that the developer Renewal, a privately-owned company based in the Isle of Man, did not own. It granted Renewal outline planning permission for development of the site later that month.

In September 2014 Renewal submitted a bid to the Greater London Authority (GLA) for £5m of grant funding towards the cost of the construction of Energize,a proposed state-of-the-art facility that would be created through the development and run by the Surrey Canal Sports Foundation (SCSF), a charitable organisation.

This bid stated that a pledge of £2m had been given by Sport England. It was supported by Lewisham, which had pledged £500,000 in June 2014 to the SCSF, subject to a funding agreement being put in place.

On 7 September 2016 the Mayor and Cabinet at Lewisham considered a report by officers advising that all of the conditions that had been set for the making of the CPO in 2012 had been met. The Mayor and Cabinet resolved to use the CPO powers in relation to certain pieces of land (described as "the Millwall Land" by the judge in his report). The conditions included that the scheme was viable and could be delivered by Renewal.

Later that month the decision was called in by Lewisham's Overview and Scrutiny Business Panel on the grounds that there was uncertainty as to the viability and deliverability of Renewal’s scheme.

On 28 September 2016, the Mayor and the Cabinet adjourned further consideration of the CPO decision pending the investigation of allegations that, as apparently evidenced by a brochure published by Lambert Smith Hampton (LSH) (commercial property consultants), Renewal had marketed the site with a view to selling it.

The officers reported the outcome of their investigation to the M&C on 15 December 2016. They reported that LSH had confirmed that they had not been instructed by Renewal or Incorporated Holdings Limited (one of Renewal’s shareholders) to prepare the brochure.

Millwall Football Club criticised this investigation as having reached an “incredible” conclusion. The club had also been strongly critical of the way in which the Mayor and the Cabinet had decided to appoint Renewal as the developer [see Renewal's response below]. The club also criticised the decision to enter into the conditional sale agreement and the decision to make the CPO.

Some members of the Overview and Scrutiny Business Panel shared the football club’s concerns, Lord Dyson noted. They were particularly unhappy at the prospect of the council awarding the right to develop the site to an overseas company whose shareholders were registered in “tax havens” and which had no track record of carrying out a large development project.

On 9 January 2017, Millwall Football Club raised a new point, the judge said. This was that, if the Renewal scheme went ahead and the sports facilities provided at The Lions Centre were replaced by those to be provided at Energize, the MFC Youth Academy might lose its English Football League Category 2 status.

On 11 January 2017, the Mayor and the Cabinet adjourned reconsideration of the CPO decision until 8 February 2017 to allow time for the investigation of this issue to be completed.

By now, allegations were also being made in The Guardian that Lewisham had been misled into making its pledge of £500,000 to SCSF. It was claimed that there had been a misrepresentation by Renewal and the SCSF that Sport England had pledged £2m towards the Energize project.

This was the catalyst for Lord Dyson’s inquiry. The Mayor and the Cabinet resolved not to proceed with the CPO until the outcome of the Inquiry was known.

Lord Dyson was asked to decide whether officers and/or members of the council acted with propriety, due diligence and in compliance with applicable codes of conduct.

In his report, which can be read here, the former LCJ said he had “rejected all of the criticisms that have been made of the conduct of officers and members. I have been particularly impressed by the care with which the officers carried out their consideration of some complex issues and the thoroughness, objectivity and professionalism of their reports”.

He added that he had reached the conclusion that they behaved with propriety, due diligence and in accordance with the applicable codes of practice in relation to all of the decisions, namely:

  • The decision to grant outline planning permission;
  • The decision in December 2013 to enter into a conditional contract of sale of the Millwall Land Renewal;
  • The decisions to use CPO powers in relation to the Millwall Land;
  • The decision to pledge £500,000 to SCSF;
  • The council’s support for Renewal’s bid in September 2014 for a grant from the GLA;
  • The investigation into the Lambert Smith Hampton brochure;
  • The appraisal of the financial viability of Renewal’s scheme and Renewal’s ability to deliver it. 

Lord Dyson concluded that the council was not misled by any misrepresentation, misinformation or withholding of information in relation to the decision to make the pledge of £500,000.

The former LCJ also said there was no inadequacy in the council’s inquiry into the circumstances surrounding the production of the Lambert Smith Hampton brochure.’

The former judge expressed the hope that his findings “will help to take the heat out of the debate that has taken place and enable all concerned to approach the question of how to bring about the much-needed redevelopment of the site in a calm and measured way”.

Cllr Chris Best, senior Lewisham Council cabinet spokesperson, said: "This is the third set of independent findings this year following allegations about the New Bermondsey development. In August 2017 the independent Charity Commission rejected allegations of money laundering, tax avoidance and conflicts of interest within the Surrey Canal Sports Foundation. And in September 2017 a judge-led Tribunal rejected 14 allegations of wrongdoing by Lewisham Council following a Freedom of Information request about the New Bermondsey development.

"Now Lord Dyson’s independent Inquiry report has been published we urge all parties involved in the New Bermondsey development to work together to agree a way forward to bring much-needed new jobs and homes to the area and ensure Millwall FC is based in Lewisham for generations to come."

In response to Millwall FC's criticisms, a spokeswoman for Renewal pointed out that Lewisham "has in fact never appointed Renewal as developer; there has never been a tender process or joint venture agreement (or similar)".

She added: "Renewal has speculatively assembled the site and acquired outline consent (in 2012). Mayor and Cabinet’s decisions have all been in the context of delivering Lewisham’s Core Strategy policy."

In response to the report overall, Jordana Malik, Director at Renewal said: “Renewal welcomes Lord Dyson’s comprehensive inquiry report and its conclusions.

“As the report states, there is no doubting the urgent need for redevelopment at New Bermondsey and Renewal remains committed to driving this forward and ensuring that it delivers significant benefits for the local community, Millwall Football Club and the Millwall Community Scheme.

“The report concludes that Renewal has demonstrated significant investment and a real commitment to carry out the scheme; it also confirms that there has never been any attempt by Renewal or the Surrey Canal Sports Foundation to mislead, misrepresent or withhold information from Lewisham Council.

“The duration of the independent inquiry has led to a year’s delay to a scheme that everyone agrees should happen and significant costs to the public purse. We hope that the conclusion and findings of the inquiry will allow for all parties to move forward so that Renewal can commence delivery of this much needed redevelopment in this deprived area.”

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