Belfast Telegraph

Thursday 24 July 2014

Land bungle sees developer getting half an acre for free

Assembly members today lambasted education chiefs over a land deal blunder that resulted in a developer gaining an additional half acre of prime land at no extra cost.

The Rosetta site in south Belfast was sold off to help fund the provision of a new school building for Wellington College.

But it was not measured and the buyer ended up with 50% more land than the authorities thought was involved in the transaction.

In a report issued this morning the Assembly's Public Accounts Committee (PAC) directed hard-hitting criticism at the Belfast Education Board over the handling of the deal.

It said: "The committee is astounded and appalled that the land was transferred to the developer without being measured, resulting in the developer gaining an extra half acre of prime land for residential development [worth an estimated £400,000] over and above the one acre agreed. "

The PAC was highly critical of the fact that the Government's Valuation and Lands Agency (VLA) was not brought in by education officials to advise on the transaction.

The committee was told by the Agency that it would have applied best practice and measured the site before any disposal.

Today's report bluntly dismissed an explanation from Belfast Board chief executive and accounting officer David Cargo for the failure to use the VLA.

It said: "The excuse given by the board's accounting officer that, in the heat of discussions and negotiations such things are overlooked, demonstrates, in the committee's view, a lack of judgement bordering on negligence."

The PAC report dealt with land disposals linked to four Private Finance Initiative (PFI) contracts agreed in 1999 and 2000 for new school and college buildings.

It followed a study by the watchdog Northern Ireland Audit Office published in September. It stated that an estimated £4.2m was lost to the public purse through under-valuation of a number of the sites.

Under PFI, developers are contracted to build and maintain public facilities for 20-30 years, in return for regular payments.

In the cases examined by the PAC, land was handed over to the developers to offset the long-term payment sums.

The Rosetta site disposal in south Belfast was part of a PFI contract involving the provision of new schools for both Wellington College and Balmoral High School.

The Audit Office estimated that the land disposals connected to this two-school deal involved a £3.4m loss to the public purse, due to sites not being given full market value.

Balmoral High School is due to be closed down next year because of falling pupil numbers.

But under the PFI deal, the education system is contracted to keep paying the private sector provider until 2027.

Another case examined by the Assembly committee involved the sale of the historic Tillie and Henderson factory building in Derry, to fund new premises for the North West Institute of Further and Higher Education.

It was sold for £750,000 in August 1999 and its new owner sold it on in December of the same year for £925,000.

No clawback of the profit was obtained by the education authorities.

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