Council chiefs in dark over ‘eco’ building deal which could have saved taxpayers thousands
The opening of The Cube in 2012, pictured is Chris Hill, centre, Broadland Council's head of economic development, with Kevin Heaton, right, director of Tilia Properties, and Shaun Catterall, Tilia contracts manager. Picture: Denise Bradley - Credit: Copyright: Archant 2012
Solicitors failed to tell council bosses, who gave away a £500,000 building for free, about a contract which could have got them a much better deal for taxpayers.
Broadland Council handed over the EcoCube centre on Rackheath Industrial Estate in 2017 for nothing to the firm which constructed it.
Five years earlier the council spent £500,000 building, leasing and equipping the centre.
It was meant to train schools and firms in green skills but was under used.
The council decided to hand it over to the freehold owner, Tilia Properties, for nothing, claiming it could not find a tenant and it was costing it too much money to upkeep.
The Eco Cube building on the Rackheath Industrial Estate which Broadland Council spent £500,000 on constructing, but then handed it to the firm which built it for nothing. Photo: Archant - Credit: Archant
The property had a rental value of about £26,000 a year and weeks after giving it away Tilia found a tenant.
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Now a delayed report into the affair, which is yet to be published, reveals the council did not know that it had an option in its contract with Tilia which meant it could have saved it money.
Called a "put option", it meant the council could have sold the leasehold back to Tilia for a percentage of the £340,000 they paid for it, rather than giving it away.
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But the council's solicitors, nplaw, did not see it and failed to tell the council in 2017 it had this option, according to the report.
Broadland District Council's new Eco and Business Training Centre at Rackheath, called the Eco Cube. Picture: Denise Bradley - Credit: Copyright: Archant 2012
The panel writing the report said this could have "led to a far better financial outcome for the council" but was "not identified" by solicitors.
In a series of recommendations to stop it repeating past mistakes, the panel said the council should look at using specialist commercial lawyers instead of nplaw to protect the "public purse".
It also said the councillor who made the decision to hand it back should have been given more detail about the "full financial consequences of the decision".
The report adds that the council built the EcoCube without a full business plan.
It also said that projects should have original documents available "to allow responsibility for the decision making process to be evidenced".
The council said it could not comment until after the report is published in August.
Nplaw and Tilia Properties have also declined to comment.
