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Council's deal with multi-billion pound developer was unlawful

Local authority breached EU law by signing industrial estate agreement

Dan Cooper

Dan Cooper


01635 886632

Council "won't make vast amounts of income" from major redevelopment

WEST Berkshire Council entered into an unlawful agreement with a multi-billion pound developer, a court has ruled.

In 2015, the council signed a deal with St Modwen to carry out a regeneration of the London Road Industrial Estate following a non-regulated bidding process. ​

However, the Court of Appeal ruled that the development agreement (DA) constituted a public works contract and therefore should have been put out to tender.​

The judgement, published last week, states that “the unlawful direct award of contracts is the most serious breach of EU law in the field of public procurement”.

The DA with St Modwen has been declared ineffective.

The ruling did make it clear that there was “no evidence and no suggestion that the council had acted at any stage in bad faith”. ​

However, it added that by entering into the DA, the council “effectively agreed to act unlawfully in the future”.

The appeal court penalised the council for issuing an official public notice announcing the DA which, according to the judgement, “was incorrect, or at best misleading”.   ​

The case was the conclusion of a lengthy legal battle between the council and Newbury-based developer Faraday Development Limited (FDL). ​

In 2009, the council gave planning consent to FDL to carry out a £50m regeneration of the estate.

Planning permission expired and FDL submitted an identical application. However, this was refused and in 2015, the council entered into an agreement with St Modwen instead.​

Speaking after the appeal was allowed, FDL director Duncan Crook said: “It is hugely regrettable that, despite our best efforts to engage positively with the council, we were forced into legal action to pave the way for a landmark development that brings huge benefits without any downside.”

The council said it was “disappointed” by the ruling.

For more, including, reaction from the council, see page 5 of this week's Newbury Weekly News.

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Article comments

  • NoisyNortherner

    23/11/2018 - 09:02

    “no evidence and no suggestion that the council had acted at any stage in bad faith” - No, just being incompetent. As any police officer will happily tell you, ignorance of the law is no excuse for breaking it.