Memorandum by Councillor Adrian Dennis,
London Borough of Croydon (CAB 28)
CABE AND THE
ACTIVITIES OF
SIR STUART
LIPTON
I am a Labour Councillor and the Cabinet Member
for Planning, the Environment and Urban Development for the London
Borough of Croydon.
Following the announcement of your committee's
forthcoming Inquiry into the Commission for Architecture and the
Built Environment (CABE), I thought that I should appraise you
of the activities of the Commission's former Chairman, Sir Stuart
Lipton, who resigned from that post in June of this year following
the report of Independent Auditors, who found that perception
of conflicts of interest between his chairmanship of CABE and
his private interests as a property developer impacted upon the
perceived independence of CABE. I was one of the original complainants
to the Secretary of State for Culture, Media and Sport, who then
appointed Independent Auditors to look into the matter.
The issues aired in this letter have profound
implications for the workability of the planning system. Over
the course of the current and preceding parliaments, the government
has altered the workings of the planning system from one that
was more flexible, accommodating "green field" and out
of town development, to a system that is more prescriptive and
plan-led, and which is focussed on the renewal and on-going vitality
of our town centres and communities. The consequence of this welcome
and necessary shift in policy is that development is now focussed
largely in established town centres and urban areas, where, by
virtue of their nature and history, there are inevitably divided
ownerships, neighbour issues and other private legal interests
that have to be accommodated, acquired or satisfied to deliver
the objectives of the planning system. These impediments can only
be overcome through good planning, clear, fair political leadership
and cooperation between stakeholders.
If a message goes out to the property marketplace
that the objectives of the planning system can be easily defeated
by obstructive private interests, then the planning system will
become weak and ineffectual, neutering government of its ability
to improve the environment in which our communities live. It is
vitally important for the future health of our communities that
your committee takes a lead on this issue. Whilst there will always
be maverick private interests, the operation of the system is
dependent upon the responsible engagement of our major institutions
with local authorities and upon the individuals who hold positions
of importance in those organisations.
The report of the Independent Auditors, AHL
Ltd, was published by the Department for Culture, Media and Sport
on 17 June 2004. The auditors found that Sir Stuart held 75.04%
of the ordinary share capital in Stanhope Plc, which is his property
development company. Legally, the significance of a shareholding
in excess of 75% is that it enables the majority shareholder to
overrule the minority shareholders at any extraordinary general
meeting. Thus, Stanhope Plc is effectively fully controlled by
Sir Stuart and should be viewed as his personal vehicle. A total
of eleven significant Stanhope projects have been considered by
CABE's influential Design Review Committee.
SIR STUART
LIPTON AND
THE CROYDON
GATEWAY REGENERATION
PROJECT
My Council has for many years been concerned
to secure the regeneration of the key 5 Ha (12.36 Acre) town centre
Croydon Gateway site which adjoins East Croydon station and which
has lain derelict since its use as a marshalling yard ceased in
the post war period. Over that time, the principal factor hindering
the development of the site has been its fragmented ownership,
partly attributable to the privatisation of the National Freight
Consortium (NFC), which entailed division of the site between
British Rail and NFC. The NFC land was subsequently acquired by
a property developer, Rosehaugh Plc, which fell into receivership
in 1992. That land is still in the ownership of the Receiver to
Rosehaugh, who has entered into a contract with the Croydon Gateway
Development Company, which was subsequently acquired in 2003 by
Stanhope Plc and Sir Stuart's financial partner, Schroders.
Against this background, my Council, for a number
of years, adopted a policy of encouraging the various landowners
who collectively controlled the site to come forward with regeneration
proposals in accord with the Council's planning policies for the
site. Regretfully, this initiative led to nothing, despite a Council
resolution that it would support such an initiative from a promoter,
or promoters, amongst the landowners, with use of its compulsory
purchase powers to assist, if necessary.
The Croydon Gateway site is a major development
site with exceptionally good public transport links. It represents
a "once-in-a-lifetime" opportunity for achieving a substantial
regeneration impact for Croydon and the surrounding area. I felt
that we must not squander this opportunity but obtain the maximum
benefit for Croydon and the region, whilst achieving a sustainable
and appropriate development that had widespread support.
The Council sought advice from a number of professional
consultancies and appointed EDAW to prepare a masterplan for the
centre of Croydon, including this site. This became our Vision
2020 plan for Croydon and confirmed our belief that the site must
be developed as a mixed use development based on a state-of-the-art
Arena (of 12,500 capacity) and to include new residential flats
including a substantial number of affordable units. This proposal
has very widespread support from Croydon residents, businesses,
and agencies and politicians across London.
This initiative by the Council led to the government
granting us Beacon Status for Town Centre Regeneration in 2001,
recognising our commitment to good administration and local democracy.
Croydon is the only London borough to have achieved this accolade
and one of only two London boroughs to have been chosen to advise
ODPM on urban regeneration policy development. Its policies for
the Gateway site are well researched and based upon advice from
eminent consultants, including PricewaterhouseCoopers, who have
advised on the financial viability of an arena on the site.
To enable our vision for the site to be achieved,
the Council to enter into a formal Development Agreement on the
28 October 2002 with Arrowcroft Group Plc for the implementation
of the development, supported by the Council's CPO powers. Arrowcroft
is a long established development company, known in particular
for its successful mixed-use development of Liverpool's Albert
Dock, which has recently been awarded the status of a World Heritage
site. Arrowcroft subsequently made a detailed planning application,
for which my authority resolved to grant consent in December 2003.
Arrowcroft's proposal enjoys the support of
the Mayor of London, Ken Livingstone, and the GLA. It also has
cross party support within my Council, the planning committee
resolution having been overwhelmingly supported by a majority
of thirteen votes to one. Outside the Council, Arrowcroft's proposal
has also been formally supported in writing by the two principal
unsuccessful Mayoral candidates and all three Croydon MP's—Geraint
Davies and Malcolm Wicks (Labour) and Richard Ottaway (Conservative).
Following completion of the Development Agreement
with Arrowcroft, Sir Stuart Lipton sought a number of meetings
with the Chief Executive and other officers of the London Borough
of Croydon in connection with the project. In these meetings the
line between Sir Stuart's role as a private developer and his
Chairmanship of CABE was blurred. Over a period, it became clear
that Sir Stuart was seeking to take over the Croydon Gateway development
in his private capacity, despite the history and the Council's
completion of its Development Agreement with Arrowcroft having
been explained to him. Sir Stuart became vociferous in his opposition
to the Council's planning policies for the site, particularly
our requirement for a mixed use development anchored by a sports
and entertainment arena. Yet he was aware that this policy has
widespread local and business support and also the support of
many others, including the Minister for Sport, who said in his
letter to Arrowcroft (in reference to the proposed arena) "we
are seeing more and more how culture in all its forms is being
used as a catalyst for regeneration and the new proposals for
the Croydon gateway Arena appear to be no exception".
During the course of 2003 Sir Stuart and his
financial partner, Schroders, developed their interest in the
Gateway site by acquiring various elements of the site, either
directly or through options, although they refuse to disclose
the exact nature of those contracts to the Council. In so doing,
Sir Stuart secured support from the landowners by convincing them
that the Council's policies for the site depress the monetary
value of the land, a point which has been investigated exhaustively
(and rejected) by the Council via the respected Chartered Surveyors,
Gerald Eve, who act as development consultants to the Authority.
Although unfounded for this reason, the Council's
advancement of this much needed regeneration is hindered by a
conflict between the monetary aspirations of private landowners
and the public benefits that the project will bring, and that
conflict has been orchestrated by the then Chairman of CABE.
Sir Stuart's planning application, and that
of Arrowcroft, were considered by the Design Review Committee
of CABE. Upon receipt of CABE's advice, which is, of course a
material consideration for the authority, the Council were not
informed that a Commissioner of CABE (Mr Paul Morrell, Senior
Partner of Davis Langdon & Everest, Quantity Surveyors to
Stanhope Plc) had a financial interest in the Stanhope proposal,
or that another professional advisor to Stanhope (the architect,
Mr Kenneth Shuttleworth, who was engaged by Stanhope in relation
to its Croydon proposal) was shortly to be appointed a Commissioner
of CABE. (He was appointed on the 3 June 2003, Stanhope's proposal
having been considered by CABE on 28 May 2003).
The confrontation was developed further by Sir
Stuart, and led to a major planning inquiry in June, July and
August 2003, at which Sir Stuart and Schroders sought outline
planning approval for a principally office development. At the
Inquiry, although the application excluded the arena required
by the Council's policies, Sir Stuart's team portrayed their proposal
as mixed use, including retail, but encountered some difficulty
in explaining, under cross examination, why their application
did not specify any A1 retail use.
It is also relevant that Sir Stuart and Schroders
were represented at the planning inquiry by the firms of two CABE
Commissioners and the solicitors, Herbert Smith, who were at that
time also solicitors to CABE, whose collective responsibility
at the inquiry was to discredit the case of the Council and its
appointed development partner.
I would add my personal distaste of their tactics,
as a professional Town Planning myself, in the way that they had
bought into the previous developers planning application and went
to appeal on it, then substituted a completely different planning
proposal with different architects and design for the Public Inquiry.
Although the Planning Inspector accepted this, what Sir Stuart
and his partners at Schroders had effectively achieved was to
submit a new outline planning application direct to a public Inquiry,
completely by-passing the local authority and avoiding any public
consultation and scrutiny. I appreciate that the Inspector allowed
this but this action has raised serious doubts about the legitimacy
of the entire planning process in the country, that it can so
easily be abused and bypassed by a developer in this way.
(I would add that this manipulation of the
Inquiry added very substantially to the Council's costs, wasting
a considerable amount of public money.)
What I believe will become clear to you is that
during 2003, the Chairman of CABE firstly sought to influence
a major public authority to favour his private development interests
over those of a developer committed to deliver the project in
accordance with the authority's democratically formulated policies,
despite knowledge of the Council's formal commitment to that other
party. Subsequently, via a process that was very demanding for
the Council Taxpayers of Croydon and, also extraordinarily confrontational,
he and his partner sought to derail the Council's policy and intent.
In so doing, Sir Stuart misjudged the commitment and resolve of
the London Borough of Croydon, which remains wedded both to its
policies (which have been formulated following consultation with
both the public and the landowners) and its contractual partner.
I am pleased to be able to inform you that on
the 21 July 2004, ODPM rejected Sir Stuart's planning application,
ironically citing advice from CABE that does not favour outline
proposals for tall buildings. It should be noted, however, that
in its letter of advice to the planning authority, CABE's Design
Review Committee offered the following observation; "The
committee was impressed by many aspects of the material presented
. . . the scheme is now a strong and coherent proposition".
Regretfully, the matter does not rest there.
Sir Stuart remains committed to taking over the project through
confrontational means and has told the Council that he plans to
submit a fresh planning application, again in conflict with the
Council's policies for the site. Sir Stuart is an important public
figure and was honoured with a knighthood in 2000 for services
to the property industry and to the environment. Moreover, he
holds the ongoing position of Property Advisor to Network Rail,
who together with British Rail Residuary, control more that 43%
of the Croydon Gateway site. The Council is concerned that Sir
Stuart may hold a conflict of interest as a consequence of that
position and his role as a prospective developer of the Croydon
site, whether or not he has declared that interest to Network
Rail and British Rail Residuary.
Sir Stuart and Mr William Hill of Schroders
have made repeated categoric statements that they are prepared
for "a long fight" to defeat my Council's policies,
despite the support that we enjoy from the GLA and other quarters.
Public authorities, faced with stringent expenditure budgets always
find it difficult to deal with this sort of attack from well-funded
private sector interests who are determined to circumvent democratic
processes for their own gain. I therefore believe that the public
interest requires questions to be put to Sir Stuart and to his
partners.
SIR STUART
LIPTON AND
SOUTH KENSINGTON
Prior to his resignation from CABE, Sir Stuart
was a protagonist in another high profile controversy in South
Kensington. This was not a matter to which I was party, but it
has been widely reported in the press, from which I draw the following
account;
Sir Stuart, whilst Chairman of CABE, formed
an alliance with London Transport, who appointed him to redevelop
the Victorian South Kensington Underground Station, which by its
nature and location defines the character and attraction of the
locality. Sir Stuart's plans were for a modern, high density commercial
and residential development that would have significantly altered
the character of South Kensington.
Despite significant local opposition and his
proposal being dubbed as "the gasometer" in the press
(on account of its scale and appearance), Sir Stuart pursued his
proposals and secured a letter of support from CABE's Design Review
Committee which offered "warm support" for his application.
It should be noted that, in addition to the attractions of the
Victorian architecture and history evident in the structure of
the station, both the station and its environs hold a special
place in our national psyche and heritage as the "gateway"
(another one) to the world renowned Natural History Museum,
the Victoria and Albert Museum and the Science Museum. Recently,
the Secretary of State for Culture, Media and Sport announced
the listing of the station.
The scenario in South Kensington is comparable
in many ways to that of the Covent Garden market building, for
which proposals for demolition and redevelopment were submitted,
which would have changed the character of the locality forever,
and which gave rise to a public outcry. There are of course many
other instances where a similar course of events have been played
out. The benefits of the conservation-led approach that was eventually
adopted are self-evident and immensely popular with the public,
who recognise the importance that a link with our past represents,
through the maintenance of those parts of the urban environment
created by our forbears that have continuing architectural, environmental
or historic value.
What is extraordinary about the South Kensington
scenario is that the Design Review Panel of such an august body
as CABE should have, in these circumstances and in a seemingly
capricious manner, taken a strong position in favour of demolition
and alteration of the character of the locality, without recourse
to the views either of local residents or the public generally,
or indeed the significance of the matter, evidenced by the subsequent
listing of the station. Events have caused public suspicion that
the apparent keenness of the Committee to adopt this approach
may have been guided by Sir Stuart's pervasive influence at CABE,
where his responsibilities (other than as Chairman) included the
Chairmanship of the Remuneration Committee and membership of the
Operations Committee, and, in addition, the assessment of individual
Commissioners of CABE when they were considered for reappointment
or appointment to the board of some other public body. He was
also the chair of the Regional Committee of the all-important
Design Review Committee and of its Enabling Panel and the Audit
Committee reported to him. It is not my intention to enter the
debate on that point; the matter has been investigated by independent
auditors who found that eight out of the total of 15 CABE Commissioners
held commercial or other relationships with Sir Stuart, outside
of their relationship with him through CABE.
Sir Stuart's planning application prompted eight
hundred letters of objection to the planning authority and the
controversy and media interest that it stimulated prompted Sir
Stuart to withdraw his application, which had the effect of making
CABE's "warm support" look at best, somewhat ill-judged.
You will draw your own inferences from the reported
events in South Kensington but it seems to me that, as with Croydon,
there is a case here of an important and knighted public personality,
who was at the time the Chairman of a most influential body that
is directly concerned with the operation of the planning system,
employing his persona and engaging in activities for personal
gain which have brought the planning system into disrepute, causing
public controversy.
Today's government is, I believe, concerned
to deliver "joined-up" administration, through cooperation
between its various arms. For the Chairman of CABE to engage in
activities that so confrontationally impact on the ability of
(in the case of Croydon) the local authority to deliver
policies in accordance with its remit or (in the case of South
Kensington) to seek to override the ability of local communities
to play an active role in creating better places to live and work,
seems to me to be unacceptable.
The independent auditors appointed by the Secretary
of State for Culture, Media and Sport were not given a remit to
consider the appropriateness of the conduct of CABE and its then
Chairman in relation to the operation of the planning system and
the question as to how this conduct has impacted upon the public
interest. In the light of these facts, I believe that the public
interest would be served if your inquiry were to question to Sir
Stuart on the issue.
I understand that one of the reasons underlying
the government's decision to appoint independent auditors in relation
to CABE was the concern that many of the perceived issues in that
case may apply more widely across the spectrum of non departmental
government bodies. For this reason, I suggest that your inquiry
should look at the motives of parties whose interests led them
to form alliances with the former chairman of CABE and investigate
the inevitable inference that they may have sought to manipulate
the actions of Sir Stuart, and in that way achieve benefit. This
could be accomplished by questioning Mr William Hill of Schroders,
leaving no stone unturned as to why these two individuals are
so determined to frustrate democratically formulated policy.
I attach copies of letters that I have written
to the new Chief Executive of CABE and also to the Consumer Complaints
Service of the Law Society in relation to the findings recorded
by the Independent Auditors at section 19 of their report. I hope
that you will agree that the concerns expressed in my letter to
the Law Society also merit investigation by your Committee and
I will forward copies of the responses to you when I receive them.
Doubtless you will have further lines of inquiry
in mind. I have formulated some questions that you may wish to
put and would welcome the opportunity to meet with you to discuss
both them and my concerns as expressed above, in the hope that
your Committee's inquiry can assist the current and future operation
of the planning system, in the public interest. I would also welcome
the opportunity to brief you on the Arrowcroft proposal, which
meets my Council's aspirations for the regeneration of Croydon
and which is an exemplar of the urban renewal objectives of the
government.
Councillor Adrian Dennis
Questions you may wish to put to Sir Stuart Lipton
(1) What is the nature of your financial
interest in those Stanhope projects that have been considered
by CABE?
(2) What is the nature of your financial
partners' interest in those projects?
(3) Was it in the interest of your partners
(such as Schroders) for CABE to review Stanhope proposals positively?
(4) Was it in the interest of your partners
such as Schroders for CABE to review the proposals of developers
competing with Stanhope negatively?
(5) Was it in the interest of any landowners
with whom Stanhope and its financial partners have a contractual
relationship, for Stanhope proposals to be reviewed positively
and for competing Developers' proposals to be reviewed negatively
by CABE?
(6) Are any of the landowners with whom
Stanhope and its financial partners have contractual relationships,
government related bodies of any kind? (Stanhope does have relationships
with government related bodies in relation to other projects,
for example the Railway lands at Stratford, and also the Treasury).
(7) Do you have any connection with any
such public body or industrial grouping, such as an advisory role?
(This will draw attention to Sir Stuart's position as property
advisor to Network Rail, in relation to which similar conflict
issues to those found by the CABE auditors probably apply).
(8) In justification of any answer to the
previous questions, please submit copies of Stanhope's and its
financial partners' contracts with landowners that are of a public
or quasi public nature, to this Committee, for its consideration.
(9) Do you think it appropriate for the
Chairman of CABE to act and seek to defeat the objectives of a
democratically elected body, in the manner in which you have acted
in Croydon?
(10) Why did you seek, whilst holding the
position of Chairman of CABE, to take control of the Croydon Gateway
project, knowing that the local authority had formally appointed
another developer to undertake the project?
(11) Do you anticipate profit or remuneration
from the compensation that Stanhope and its financial partners
will receive, if a compulsory purchase order is confirmed for
the Croydon project?
(12) Is it your intention to continue to
obstruct Croydon Council's preferred regeneration scheme?
Questions you may wish to put to Mr William Hill
(1) Sir Stuart Lipton has explained to this
Inquiry that his financial interests motivated him to seek to
defeat the democratically formulated policies of the London Borough
of Croydon. Does that, or could that remuneration or reward originate
from your Institution? (The answer will be "yes").
(2) Should we then draw the inevitable conclusion
that your institution, Schroders, under your direction, employed
the then Chairman of CABE and motivated him to secure the defeat
of the democratically formulated policies of the London Borough
of Croydon? (The answer will be "yes").
(3) So should we draw the further conclusion
that Schroders, an important and respected institution, employs
influential public personalities, for the purpose of circumventing
the constitutional processes of our democracy? (The answer will
be "yes").
(4) Do you believe that the Directors of,
and other stakeholders in Schroders, a long established and reputable
institution, would approve of these actions if they understood
the facts as revealed to this Inquiry, in the light of the inevitable
concern that these revelations will stimulate in government circles?
(5) Do you consider those actions defensible
and in the public interest?
(6) Please inform us what the origin is,
within your Institution, of the funding that you provide for Sir
Stuart Lipton? (Mr Hill told the planning inquiry that the funding
comes from the Schroder Exempt Property Unit Trust, in which the
investors are pension funds and charities).
(7) Do you believe that the trustees of
the investors whose money you have used in this way, who are undoubtedly
responsible people and whose funds enjoy tax and other privileges
granted by the government, will be happy for their funds to be
used in this way, with the inevitable publicity that will ensue?
(8) What was the reasoning behind your motivation
for supporting Sir Stuart Lipton when you were aware of the London
Borough of Croydon's policies and that they had formally appointed
another Developer to carry out the development in accordance with
Croydon's democratically formulated policies?
(9) In acquiring interests in the Croydon
site, have you based your assessment of land values on the Council's
policies, including their requirement for the project to include
an arena? (Mr Hill told the planning inquiry that he does not
regard an arena as either viable, or an appropriate use for such
a high value town centre site, and the answer "no" can
therefore be expected).
(10) If you have then based your financial
assessment on different planning assumptions, are the investors
in the Schroder Exempt Property Unit Trust, the Directors of Schroders
and your other stakeholders going to be impressed if the land
is compulsorily acquired by the Council and you receive compensation
appraised realistically in accordance with the planning policies,
which causes you a loss?
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