Corby council sold Tesco land 'too cheaply'

Corby council has been accused of acting unlawfully and missing out on millions of pounds by selling land too cheaply.

A site at St James, Corby, now being developed by Tesco, was sold by the Labour-led borough council for £82,000.

The BBC has seen a council email which states the land was worth £8m a year later, in 2011. A Tory councillor claims the sale was unlawful.

The council said the Audit Commission was investigating.

Councillor Rob McKellar said he believed that the sale contravened the Local Government Act of 1972.

Under the legislation, local authorities are obliged to achieve the best price they can for property, and anything sold for more than £2m under its value must be referred to the secretary of state.

'Official advice'

The council's One Corby Policy Committee also ruled in 2008 that this type of under-value sale must be referred to committee.

Mr McKellar claims this did not happen with the St James land, which was sold to Mulberry Developments in 2010.

Head of housing Steve Redfern, in an email to Mr McKellar, said the land was valued at £8m by Savills in 2011, with the benefit of the retail consent granted to Tesco.

Mr Redfern added even with a discount for it not having planning permission, it would still be worth about £4m.

He also added that anything sold for more than £2m under value must be referred to the secretary of state, and that the 2010 sale had been authorised by the then chief executive, Chris Mallender.

Mr McKellar said he had been alerted to the issue by an open report on under value rents.

"It indicated that not all under value land sales had followed policy, so I asked questions based on that.

"I was completely shocked when I got an email back to say that not only had the transaction not followed policy, they had not followed the law."

'Aware of concerns'

Acting chief executive of the council Norman Stronach said the land had a "long and complicated history" and its sale had been reported to appropriate council committees.

He said the site had been subject to a number of valuations since 2000.

"The council is aware of concerns over this and have asked the Audit Commission to look into this whilst also looking at the Cube history," he added.

Earlier this year a leaked confidential report revealed the £47m Corby Cube - which houses the council offices - was more than £10m over budget and built with "dangerous" design flaws which had to be corrected.

An Audit Commission report is expected in August or September, Mr Stronach said.