Spending £13 million that they don’t have. Overview and Scrutiny Clash with Mayor and Chief Exec.

This is not central to this article, (page 1) but can anyone tell us what this verbiage is for? Or indeed, what it means? 

In the introduction to the report from ‘the lead member’, (Mayor Fiaz), it says “The Royal Docks is a diverse and purposeful place, enriched by a renewed focus on inclusive growth...”.

Anyway, on to the main points and how poor planning costs the residents of Newham money.

The Overview and Scrutiny Committee (OSC) is comprised of the Chairs of the Scrutiny Commission, nominated councillors and appointees.  We have noted, with the change in those who chair the commissions that the scrutiny function of the council has sought to exercise some of its statutory responsibilities more robustly recently, specifically by calling the mayor to account for some of her actions.

Their role is described in government guidance.

What overview and scrutiny committees do

“4. Overview and scrutiny committees have statutory power to scrutinise decisions the executive is planning to take, those it plans to implement, and those that have already been taken/implemented... Overview and scrutiny committees may make reports or recommendations to the authority or mayor about the discharge of their respective functions, and also on matters that affect the authority’s area or the inhabitants of the area. Recommendations following scrutiny enable improvements to be made to policies and how they are implemented. Overview and scrutiny committees can also play a valuable role in developing policy.”

It’s all very worthy.

This scrutiny function has not always been appreciated by the mayor, nor now, it appears is it appreciated by the chief exec. 

In late July, the met to consider a cabinet report on the Royal Victoria Bridge. This is a “vital piece of infrastructure”, necessary to the development of the Victoria Docks. The OSC actually had to take the step of “calling in” the report, for reasons that will become apparent.

We discover, hidden amongst the plethora of background information that,

“1.6 Since agreeing the loan, costs of the bridge have increased, in part due to requests from LBN to increase the width and capacity of the bridge during pre-application discussions. In order to deliver the bridge, TSP therefore require additional funding.”

In short building costs have risen and the costs have also been increased because Newham has changed the brief. As a result the cabinet agreed to pay an additional £13.2 million for the costs of the bridge. This will come, not from reserves, (there aren’t any), but from borrowing. 

This does rather beg the question, what were the cabinet doing in respect of this? There seems to have been absolutely NO questioning nor discussion about spending an extra £13.2m. Nor why the management review didn’t flag this up as a potential risk, (we’re assuming that there was a management review). It seems to have been nodded through.

This is the sort of development that would at one time have attracted national regeneration money. Planning permission was given to the current developers for a certain number of homes, on GLA land. A condition of the permission was that a bridge connecting the site had to be built.

The developers, (TSP, The Silvertown Partnership), submitted plans. Newham asked for changes, making it wider.

TSP are understandably reluctant to bear all of the costs of building a bridge when their residents will only be a fraction of the total bridge-users. The trouble is that the future developers have not yet been identified nor (obviously), have they submitted plans. Therefore, they are in no position to contribute.

For reasons unknown, Newham has not sought either to shift the burden of extra costs to the GLA, (who own the land), nor suggest that they share these additional costs. 

The Silvertown development will be in an enterprise zone and Newham WILL NOT get either council tax nor business rates from the development. Nor will Newham be able to levy the additional costs of the bridge retrospectively from new developers, via CIL or s106.

The GLA will take the capital receipts. Residents and businesses will avoid local taxation. Newham council tax payer will pay off the loan over the next 50 years; £13.2m now, closer to £50m over the life of the loan.

After a debate lasting 40 minutes, the OSC met for part their meeting ‘in camera’ in which Cllr Paul is reported as championing openness “robustly”, he lost to the ‘legal’ advice which was to keep the discussions secret. We can only assume that they didn’t want future developers to know about the £13.2m subsidy!

It seems that the chief exec, (who wasn’t present) has taken exception to the attitude of uppity councillors who feel that tax-payer money should be accounted for. We understand that she has written to the OSC Chair, Cllr McAlmont to complain. (More on this, as and when we get it.)

The mayor has pushed back any decision to September, (a problem delayed is a problem solved!). But at least that will mean that everything can go ahead. Err…

Paragraph 10.Risks, noting continued price inflation in construction costs, officers suggest that not everything might be as straightforward as  it might have seemed.

“10.1 The bridge may not be deliverable even with funding provided by LBN, if costs were to increase significantly. The key price risk is in the cost of the steel, which is the primary material for the main structural components. However, this risk will be held by TSP and any funding agreement will include clauses making the funding conditional on bridge being delivered and fully operational by a specified and agreed upon date.”


N.B. The cabinet paper promises an additional 40-55,000 new jobs as a result of this development. The language of this sort of assertion is always ambiguous. The promised jobs are not from new industry in the Royal Docks. This is the calculation of construction and supply chain jobs for the period of construction. We hope that Newham and WorkPlace, (now rebadged as Our Newham Work), will be in early discussions with developers to ensure that unemployed Newham residents and young people at college are being trained to take advantage of new construction. Maybe one of the councillors could enquire.