The contract for Crest Nicholson (CNS) to develop the East Street / Brightwells site is governed by regulations controlling the running of a public contract. When Waverley Borough Council (WBC) as public authority originally put the East Street contract out to tender, CNS won after tendering in competition with other developers. In simple terms, when a public contract is then changed to the benefit of the developer, the public authority is required to retender, so that the developers who lost in the original round of tendering have another chance, no that the contract has changed.
If the local authority fails to retender, they can be challenged in law. The challenge must be made within 30 days of the change, and it must come from someone of standing – that is, someone who is genuinely affected by the failure to retender. An example could be a local ratepayer, who believes he or she is no longer getting best value for money under the revised contract.
The East Street / Brightwells development can only proceed if it is financially viable, and this includes CNS effectively paying WBC at least an agreed sum of money for the land – the Minimum Land Value (MLV). In the contract of 2009, this was agreed at £8.76 million for the (approximately) 7 acre of the site. However, CNS could not afford to proceed with the scheme, so on 24 May 2016, WBC agreed to reduce the MLV to £3.19 million. It is noted that while WBC already owned approximately 6 acres of the site to be developed, further land had to be acquired. This included the old health centre beside the Dogflud car park, the old cinema site (now a car park) and the Marlborough Head. The cost of acquiring this additional land is around £4 million. Instead of securing money for local taxpayers through sale of the land, WBC is would thus sell the land to CNS at less than cost price, so the local taxpayers would be subsidising CNS.
FIG is raising a challenge on the grounds that, with such a massive change to the benefit of CNS, WBC should retender the contract.
The challenge, if successful, would quash the 24 May 2016 decision by WBC, such that the higher MLV would stand. As CNS found the scheme was not viable with this higher MLV, it is expected that the scheme in its present form would not go ahead, and a full redesign would be necessary. This would be Farnham’s chance of getting a much improved development at Brightwells.