Legal advice is being sought after Mayor Boris Johnson said the capital’s fire authority should sell three axed fire stations at below their market value in order to provide space for new schools.
The stations at Silvertown, Southwark Bridge Road and Bow were closed as part of last year’s budget cuts and were due to be sold on the open market to the highest bidder.
However the Mayor has written to members of the London Fire and Emergency Planning Authority (LFEPA), encouraging them to accept bids from the Government’s Education Funding Agency which would use the sites to deliver new schools.
It’s understood that the ERA bids are at least £30m below the sites’ collective market value, representing a substantial loss to the authority which is facing budget cuts of £4.5m this year. Since 2011/12 the budget has decreased by £37.2m.
City Hall is considering compensating the highest bidders who would be gazumped by a sale to the ERA but seems unlikely to compensate LFEPA for any loss it suffered.
A report presented to members this morning says: “The Mayor advises that he will be asking the developer/new school provider to consider increasing their bid to match the highest bids already received, though given the large disparity between the developer/new school provider bid and the highest bids offered, officers believe this is unlikely to be achieved.”
LFEPA officers have also raised concerns that accepting the lower bids could breach members’ statutory duty to secure maximum value for taxpayers.
Use of the Southwark site for a new Free School is backed by Peter John, leader of the local Labour controlled council.
In a letter sent to the Mayor last month, Cllr John says it’s “essential” that the site be used for a new school as it would both help meet local demand for new places and ensure residents benefited from the area’s regeneration.
However the party’s fire spokesperson on the London Assembly says the Mayor is wrong to encourage members to sell off the land cheaply.
Fiona Twycross AM said: “The stations at Silvertown, Bow and Southwark are public buildings, the Mayor should allow us to do what the public would expect the fire authority to do, which is try and secure value for money for their sale.
“What’s more, when we are facing additional cuts this year and next to the Fire Brigade, it seems irresponsible to do anything other than this. We have a duty to protect the Fire Service for Londoners.”
Darren Johnson, a Green party London Assembly and LFEPA member said the Mayor’s stance “flies in the face” of members’ legal duty to Londoners.
Lawyers have been asked to advise on the implications for members should they agree to the Mayor’s informal request or comply with a Mayoral Direction ordering them to sell the properties to the ERA.
The advice will be discussed at a further meeting later this month.