The sale of two fire stations for less than the market price looks set to go-ahead after Mayor Boris Johnson agreed to indemnify the capital’s fire authority against any legal challenge.
Mr Johnson wants the former Bow and Silvertown stations, plus a further site in Southwark, to be sold to the Government’s Education Funding Agency so they can be used to deliver new schools.
Fire authority members initially opposed the sale on the grounds that they had a legal duty to get the maximum return for Londoners and had already received bids for more than the EFA would pay.
It’s understood the agency’s bids are around £30m below the sites’ collective market value, representing a substantial loss to the authority which is already facing a £4.5m budget cut.
Members say they’re concerned that the existing bidders or other third parties could mount a legal challenge to any decision to sell the sites at below market rate.
After Mr Johnson suggested he would use his reserve power to order the authority to comply with his wishes, members said they would agree to sell the Bow and Silvertown sites on the condition that he indemnify them against any court action.
The Mayor has now written to the authority confirming he will increase its funding to cover any costs incurred in defending a legal challenge, any settlement City Hall approves or damages awarded by a court.
He is also planning to compensate the highest bidders for all costs associated with their tenders in an effort to reduce the likelihood of legal action.
Authority members will consider the Mayor’s offer next week.