Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 220-239)



  220. I was going to refer to the Report on the termination of the Leeds and Bristol Corporations, which clearly indicated that such documents should not be lost. It does seem to me that the Accounting Officer of the Development Corporation was responsible for that Mr Hall, do you accept that?
  (Mr Hall) Ultimately I am responsible.

  221. For the fact that files have gone missing, you are responsible for those files which have gone missing?
  (Mr Hall) Ultimately in relation to that.

  222. That is fine. There are questions spinning in my mind in all kind of directions, this requires a yes or a no answer, were there times when you refused to meet Members of Parliament?
  (Mr Hall) No.

  223. You never, ever refused to meet a Member of Parliament who asked to meet you?
  (Mr Hall) Not so far as I am aware.

  224. You are required to tell the truth here, you know that, do you not? Do you want to reflect on that answer?
  (Mr Hall) I like to believe I am sat here telling the truth, and I am saying to you not so far as I am aware.

  225. Let me go on to Case B, the Corporation's office accommodation. You had 12 years existence, why did you sign a 125 year lease?
  (Mr Hall) In the first instance we considered that we wished to take the equivalent of the freehold of that property.

  226. Why did you sign a 125 year lease when you had a 12 year existence?
  (Mr Hall) Because we were taking the equivalent of the freehold of the property.

  227. That is £1 million. Why did you leave that building empty for well over a year?
  (Mr Hall) Which building?

  228. The building where you signed the lease, was it Stevenson House? The building was left empty. Have you forgotten that as well? You have a convenient memory it seems to me.
  (Mr Hall) I am trying hard to remember.

  229. Page 24.
  (Mr Hall) Right.

  230. Do you not remember leaving the office building and moving to another office building and it was left empty. Presumably you were paying the lease all that time. This was the one that had 125 odd years still to run.
  (Mr Hall) When we moved to Dunedin House.

  231. Why did you leave it empty?
  (Mr Hall) For two reasons actually. The first reason was, not deliberately because we were looking for other tenants if we could find them. The second reason was we thought there could be an opportunity for temporary tenants in those buildings.

  232. You presumably continued to pay rent on an empty building?
  (Mr Hall) That is correct.

  233. Why did the business case fail to recognise the fact that the rent which you had agreed to pay was twice the market average on the 20-year under-lease which you then signed? Why were you paying twice the market average?
  (Mr Hall) Basically we were again looking to see if we could stimulate a market in relation to that part of the world having regard to the fact at that time we thought the Middlesbrough Dock scheme had a chance to go ahead. In other words, we would see a revival in that area. That is totally parallel to the approach the Corporation took in relation to the new office block at Dunedin House.

  234. The record will say that you agreed to pay a 20-year under-lease at twice the market average.
  (Mr Hall) We did.

  235. Why did you agree to pay a penalty at the end of that? There was a disengagement from the agreement.
  (Mr Hall) By English Partnerships?

  236. It was clear you were not going to be in existence in 20 years and you were happily signing blank cheques for the successor bodies, presumably the DETR or whatever it then was, to pick up.
  (Mr Hall) Everything would of course depend on what was happening by the end of the life of the Corporation.

  237. Why did you fail to report these matters to the Corporation?
  (Mr Hall) I am sorry, I do not understand that point.

  238. "The Corporation's financial appraisals and business case to support the decision to sell the leases failed to recognise . . ." and then it goes on to talk about the 20 years, the twice the average and the penalty clause which was due to be paid. Why did the financial appraisals and business case fail to recognise those, effectively, hidden penalties and twice the market average of rents? Why did you fail to inform the decision-makers that was the case?
  (Mr Hall) Again, as I said earlier, I cannot refer to the detail of that matter at this stage.

  239. Why?
  (Mr Hall) Because I do not have the papers or the files, but the reality of the situation we had at that time was that we were looking to see, in terms of an uplift in that area, if we could achieve one, with an overall revival of rents.

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