Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence

Memorandum by Councillor Adrian Dennis, London Borough of Croydon (CAB 28)


  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.


  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.


  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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