Wandsworth Council leader Edward Lister has attacked Government ministers after they refused to contribute to a compensation bill which will see see local council tax payers paying £1.6m to property developers for a piece of open space they bought for just £30,000.
Last year the Court of Appeal “reluctantly” ruled in favour of developers Greenweb in a dispute over a piece of land known as Fred Wells Gardens.
The land had been designated as a green space in 1979 by the Greater London Council following the removal of prefabricated buildings which had been erected when the last of the original war bombed housing had been removed.
When the GLC was abolished, the London Residuary Body sold the land to a private developer. The developer tried to obtain permission for housing but was refused by Wandsworth Council which wanted to see the land remain as a park for residents.
The developer then sold the land in 2001 to Greenweb for £30,000 who also unsuccessfully sought planning permission. The decision to refuse permission to Greenweb led to the company applying to the Land Tribunal in September 2007 for compensation under the Land Compensation Act 1961.
The tribunal ruled that as planning permission had once existed for the site the council must compensate the developers for the value of the homes they wanted to build on it.
In last year’s ruling three Judges expressed regret for an “inevitable” outcome which could have been avoided had Ministers acted on a previous recommendation of the Law Commission to change the law.
Lord Justice Thomas said the “conclusion is inevitable given the wording of the Act. It is, however…a highly regrettable conclusion for the tax payers of the London Borough of Wandsworth.”
“Those taxpayers, not, it seems, the Government in Whitehall, must now fund a payment of over 100 times the value of the land under legislation which should have been amended through the initiative of the relevant Department in Whitehall in accordance with the recommendations of the Law Commission and the observations of Lord Oliver.”
Lord Justice Buxton also agreed and said he found the outcome “utterly deplorable” adding “the recommendation of the Law Commission…might on one view have been seen as something of a tidying-up provision. The Law Commission was not faced with, and did not set out, the possibly dire consequences of this legislation, which are demonstrated in practice in this case. That may be why the recommendation has not been acted on. But another very weighty authority has also urged the review of these provisions….Lord Oliver, speaking for a unanimous House of Lords, described the provisions as an anachronistic relic, and urged their reconsideration. That was fifteen years ago. Lord Oliver’s call has not been heeded.”
Buxton said the need to change the law “must be heeded now” and told local authorities that if Government failed to act they “must exert political pressure to achieve the correction of the anomaly.”
Following the ruling Cllr Lister wrote to Communities Secretary Hazel Blears urging her to change the law in accordance with the Judge’s comments, and also called on her to fund the compensation from central Government funds because of the “continued failure by Government to carry out a simple repeal to remove an anomaly which has been flagged up on several occasions over the last two decades.”
In response, junior minister Sadiq Khan MP told Lister: “We are, of course, aware that there are some anomalies still in compulsory purchase and compensation legislation….I am also aware of the concerns expressed by the Law Commission.”
“However, you will appreciate that this is a very complex area of law…. and…. given the many other priorities for Parliamentary time, I do not foresee an opportunity to enact the reforms relevant to the Greenweb case in the near future.”
Khan, whose constituency is in Wandsworth, also advised that “the department is unable to contribute to your compensation payment.”
Lister said it was “astonishing that the Government intends to do nothing to fix this broken law, which has unfairly forced taxpayers in this borough to fill the pockets of property developers.”
“And because they won’t pay a penny towards the fallout from their inaction and incompetence, every council tax payer in the borough, including people in the minister’s own constituency, will have to fund this absurd compensation bill.”
