Press Release - November 2011

Press Release

Campaign for Morden Tavern – Local Government Ombudsman Report November 2011

The Campaign has received the LGO’s final report following a complaint by Campaign Chairman Mr Smith on behalf of the Campaign for Morden Tavern.

The Campaign is pleased that the LGO has confirmed some of the issues which it had raised with them and the contradictory answers given by Merton council. We have summarised these points below:

The council clearly declined the offer to buy the leasehold or jointly sell the leasehold and freehold which would have raised significantly more value from the site than was subsequently obtained (para 7). The council’s response, point 8, is difficult to accept given its subsequent behaviour in agreeing to sell the Freehold.

The council also clearly declines an interest from a large property developer whilst at the same time encouraging and negotiating an agreement to sell the freehold to Reef Estates (para 10). Again missing an opportunity to secure a better value for this council asset.

The Ombudsman's statement then goes on to state that Reef Estates, "was the preferred bidder when discussions started between it and the council" (para 26).

This supports the Campaigns charge that Reef Estates Limited where given an unfair advantage by the actions of Merton council in purchasing the leasehold and that this in turn prevented pub companies from being able to outbid the developer. This is in direct contravention to Merton’s pub protection policy L16.

We charge that without council interference there would have been a significant likelihood that more pub companies and entrepreneurs would have taken interest in the Morden Tavern and that it would most likely have stayed as a public house serving the St Helier community. It is clear that Merton Council did not want this outcome.

The LGO confirms that ward Councillors were informed on the 30th June about the likelihood to sell the Freehold and that the decision was taken and signed off on the 1^stJuly, less than 24 hours later (para 18). 24 hours was insufficient for ward councillors to consider a full response or consult with local residents. Merton officers do not seem to have acted in a reasonable and transparent manner.

The LGO has found evidence that the Council did not follow correct process in handling the bidding for the Morden Tavern and gave Reef Estates preferential treatment. As a result, the Council has agreed a lower offer for the site than it might otherwise have done - perhaps by £1m less than the site is worth. The Campaign accepts the LGO’s decision not to further investigate the complaint against Merton Council given the limited remit which he has to justify such investigations. However, the Audit Commission has reviewed the facts and agreed that the charge is serious to launch a full investigation into the Council's behaviour.