Once upon a time, Cambridge libraries were more straightforward operations than they seem to be today. The County Council owned the building they were housed in, ran the library, and Cambridge residents came in to browse the bookshelves, relax, read the papers, and borrow the occasional book. Nowadays, however, things are a little more complicated. Here is a look at the intriguing collection of companies that appears to be involved with Milton Road Library.
As I write, nobody is browsing the bookshelves at Milton Road Library – the building has recently been demolished, and is to be replaced by a new building which will house a number of flats, as well as a shiny new library. I understand that part of the imposing 1930s entrance has been preserved and will be incorporated in the new building. However, the site is no longer directly owned by the County Council. A collection of freshly-incorporated limited companies has sprung up, and their balance sheets are humming with library-related activity.
Some of the story is told in the minutes of the Council’s Commercial and Investment Committee, which has been dealing with the sell-off of the library site and the setting up of the corporate structure that now owns it. Remarkably, the County Council bans search engines from the site that holds its committee papers, making it much harder to find the relevant information. Fortunately Companies House has a more open policy.
Back in May 2016, the Committee approved the establishment of a Housing Development Vehicle (HDV), a separate company which the Council would own and sell property to, for the HDV to develop. The idea was that instead of selling off property to a developer, the Council could make more revenue by owning a development company itself. The minutes of the meeting record some concern from councillors about this approach. Tellingly, officers advised that “…having Councillors on the Company Board, had led to problems for other Councils – the company needed to be free and agile enough to run its own business.” Instead of councillors, Council officers would take up positions on the company’s board, at least initially. When councillors expressed concerns about whether this would lead to a conflict of interest, “…Officers reassured Members that whilst they would have a role once the HDV was being set up, it was envisaged that professional directors with no connections to the County Council would be in post as soon as possible.” We will see in a moment to what extent this has happened.
The HDV company was duly set up in June 2016, under the name Cambridgeshire Housing and Investment Company Ltd, known as CHIC for short. There were two directors initially, Quentin Baker and Christopher Malyon. Quentin Baker is Executive Director at LGSS Law Ltd, a legal services company jointly owned by Cambridgeshire, Northamptonshire and Central Bedfordshire councils; Chris Malyon is Deputy Chief Executive and Chief Finance Officer of Cambridgeshire County Council. In April 2017 they were joined on the CHIC board by David Gelling, an experienced property developer who has previously been involved with companies based in Tattenhall, near Chester. His LinkedIn profile reveals that he has worked on property development for the Ministry of Defence, and has “extensive property and political contacts in the London, Manchester, Liverpool and Birmingham markets.” At time of writing, Mr Gelling is the only director without a direct connection to the Council. Exactly how and why he was selected for this role is unclear, at least to me.
The decision to sell Milton Road Library to CHIC was taken at the October 2017 meeting of the Commercial and Investment Committee. CHIC would redevelop the site, replacing the existing building with seven flats and a new library. The Council would then lease the library back for a period of up to 25 years. The minutes report the capital value of the site as £1.82 million, and the rental of the library as £13,668 a year. The committee noted that the seven flats “…did not meet the City Council’s threshold for affordable housing, which was ten homes. The decision on whether to sell or rent the properties would be down to the developer.” The plan was duly approved.
In February 2018, CHIC changed its name to This Land Ltd and sprouted a number of subsidiary companies: This Land Asset Management Ltd, This Land Development Ltd, This Land Finance Ltd, and This Land Investment Ltd. All four subsidiary companies have the same three directors and are wholly owned by This Land Ltd. None of them have yet done anything very exciting, at least not that has to be reported to Companies House. This Land Ltd, in turn, remains 100% owned by Cambridgeshire County Council.
Milton Road Library is not the only Council property that This Land is involved with. Mr Gelling’s LinkedIn profile says This Land “…will primarily focus on residential developments, creating in excess of 1000 new homes and will create neighbourhoods in both rural and urban locations.” One supposed advantage of having a separate company is that the Council can borrow money at low rates, and then lend the same money to This Land Ltd at a commercial rate, pocketing the difference. However, as long the company remains wholly owned by the Council, this seems to amount simply to shuffling money around – This Land Ltd is expected to make large paper losses in its early years.
So what does all this matter? I think there are two key concerns. Firstly, this structure seems to make the management of these formerly Council-owned properties more opaque and more remote from elected councillors. Secondly, there is inevitably the concern that the continued – and enormous – financial pressures on the Council will lead it at some point to consider selling off some or all of its 100% stake in This Land Ltd, effectively privatising formerly publicly-held assets.
Arbury Councillor Jocelynne Scutt has tabled a question for Tuesday’s Full Council meeting asking for more information about This Land, and in response the Chairman of the Commercial and Investment Committee, Councillor Josh Schumann, has offered to circulate a briefing note to all members. Let’s hope that the Council will publish it to the general public. We will be watching developments carefully.