Council sells its stake in development company

The Conservative opposition group said the sale has led to fears that homes could be built on the land once owned by the council which it would now potentially be unable to prevent

Stoke-on-Trent City Council has sold its shares in a development company it jointly founded in 1993 for £5m.

The authority established Stoke-on-Trent Regeneration Limited with St Modwen, and the firm has been involved in a number of major developments across the city.

But it said now was a "sensible time" to sell its 19% stake due to the current economic conditions, and that the decision was taken following independent advice.

However, the Conservative opposition group said the council should have asked for the land owned by the company instead and now feared hundreds of homes could be built with the authority potentially unable to prevent that.

'Like peanuts'

The firm's property portfolio includes much of the land at Berryhill Fields which was previously earmarked for up to 1,300 homes, although deemed as not "currently viable" for development in 2020.

But Conservative group leader Dan Jellyman said that could change due to a new housing land assessment being carried out by the council.

He said the value of the site and others owned by the company would increase if earmarked for housing in Stoke-on-Trent’s forthcoming local plan.

“Our view is that £5m is going to look like peanuts," he said.

"The land is going to be worth a lot more than that, now that it’s under the full control of a property developer.

"The council should have walked away with control of these sites. They should either have asked for the transfer of the land from St Modwen, or for a covenant to be placed on the sites so they can’t be developed."

Cabinet members agreed to the sale of the shares in December in a private meeting and the council said in a statement on Friday it had disposed of its shareholding on 13 March.

“In undertaking the required due diligence the city council took independent professional advice which considered all aspects of the sale," a spokesperson said.

"This advice indicated that the sale price was appropriate based on a number of factors and the city council does not agree with the speculative opinions being expressed that the shares were sold cheaply or below value.

Any development put forward would be considered through the usual planning processes, which "has always been the legal position and the decision to sell the shares does not change this", the statement added.

Last month the council approved a 4.99% tax rise, the biggest increase allowed without a referendum, as it looks to make cuts of £8m.

This news was gathered by the Local Democracy Reporting Service which covers councils and other public service organisations.