“Putting the Magic Back Into Milton Keynes”
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“Putting the Magic Back into Milton Keynes” July 2011 The Report of the Homes and Communities Agency Asset Transfer Scrutiny Panel - 1 - - 2 - Contents Page 1) Introduction 4 2) Terms of Reference and Method 5 3) Executive Summary 6 4) Background 8 5) HCA assets under consideration 11 6) Evaluation of economic options 14 7) Timeline 16 8) HCA and Government negotiations 17 9) Transfer issues 22 10) Other considerations 24 11) Managing assets once transferred 37 12) MK staff transfer 42 13) Financial implications for MKC 43 14) Restructuring MK Council 48 15) Future external relationships 50 16) Role of wider public sector 52 17) Future scrutiny 53 18) Conclusions 54 19) Recommendations and future actions 56 20) Appendices 64 - 3 - “In these days, somebody who says a thing cannot be done is quite apt to be interrupted by some idiot doing it.” - Elbert Hubbard 1 Introduction This report looks at what has been done to effect the Council resolution of June 2010 and where we are in the process. The panel has set out a recommendation for Cabinet on the principles it should use to negotiate any transfer and a set of recommendations on next actions. It does not detail issues negotiation sensitive or commercial in confidence issues although these will be addressed in separate discussions with the Leaders of the three political parties and the Chief Executive. With that caveat, the report covers all the issues and how we should try to achieve what the Council is aspiring to. This report would not have been possible without the willing participation of the political parties, officers of the Council, HCA, members of the wider business community and key stakeholders. We thank them all for giving of their time to freely discuss the issues. We hope that this report lives up to their expectations. Councillor Brian White Chair of the Scrutiny Panel July 2011 - 4 - “The first step to getting the things you want out of life is this: Decide what you want.” - Ben Stein 2 Terms of Reference and Method Members of the Scrutiny Panel were representatives of each of the political Groups at the Council: Councillors Bald, Gerrella, Tallack and White (Chair). The Panel was set up to scrutinise the processes involved with achieving the Council’s aspiration to own and manage the remaining HCA assets, to look at the staff transfers of HCA employees to MK Council, to make a recommendation on which Government option and to indicate a way forward through the negotiations with HCA and the issues which need to be tackled to effect a successful transfer Evidence was mainly obtained by interviewing witnesses at meetings but also included Council and other documents provided by officers and public views sent in response to a press release (attached at 20.1). A timetable showing the meetings and other work of the Scrutiny Panel is attached at 20.2 and a list of the evidence received by the Scrutiny Panel is attached at 20.3. - 5 - “To accomplish great things, we must dream as well as act.” - Anatole France 3 Executive Summary The establishment and growth of Milton Keynes over the past 44 years has been the responsibility in large part of a succession of government agencies which have had varying degrees of involvement with and accountability to Milton Keynes people and their elected representatives. Milton Keynes thus had a direct connection with the UK government. On the other hand, there have been frustrations that the democratically accountable Milton Keynes Council (MKC) has had less control over the city’s destiny than in traditional towns. For the first time, the current government does not intend to have an arm of its own with specific responsibility for Milton Keynes. Things will change and MKC must meet the challenge. Many land and other assets were administered by the recently defunct Milton Keynes Partnership Committee (MKPC), a sub Committee of the Homes and Communities Agency (HCA). This paper addresses the future of those assets and where the responsibility for future development of Milton Keynes should lie. There are four key functions of MKPC that must also transfer elsewhere. Discussions are advanced on transfer of the investment arm and the development control powers and the future of the tariff. This report touches on these issues but is primarily concerned with the land and other assets held by the HCA. The government is evaluating five options from sale to the private sector as a job lot at one extreme to HCA retaining ownership and management at the other. These are described and evaluated in detail at paragraph 6.1 and 6.2. The Scrutiny Panel has had wide-ranging discussions with a number of people that play key roles in the city, some with - 6 - experience of previous transfers as well as officers of MKC and HCA and the political group leaders. The view of the Scrutiny Panel is that Option 3, which is that the Council should acquire the assets provided that a reasonable settlement can be negotiated with central government, should be adopted. There is also a big non- financial prize. For the first time the assets held until now by central government could become accountable to the elected representatives of the people of Milton Keynes. Many of the other options will represent a diminution of the influence that Milton Keynes people have over the decisions taken by quangos and none will provide greater accountability than the status quo. This preference for Option 3 on the right terms is the view that has been taken by all political parties at MKC and will hopefully be endorsed by the HCA at their Board meeting at the end of this month. This report examines the need for MKC to go into the negotiations with government well prepared and highlights issues that need to be resolved in those negotiations. MKC owes it to the council tax payers to acquire the assets on the most favourable terms. The report then deals with the consequences of that decision and the work required to effect a successful transfer. It also looks at the actions that need to be taken once a successful transfer has taken place in order to ensure Milton Keynes can achieve its aspirations and become what the Local Government Commissioners said at the time of the unitary authority’s creation as “one of the great cities of England”. The four key conclusions are that: o we should go for transfer of the assets to MKC, o we should not do so at any price, o thorough preparation and transparency are required to effect transfer and o the opportunity to transform the authority must not be missed. - 7 - “God made the country, and man made the town.” - William Cowper, Olney, 1785 4 Background 4.1 Brief history of MK city development Milton Keynes was established as the last of the post war new towns and the only one to be created as a city. The Milton Keynes Development Corporation (MKDC), created in 1967 to develop the new city against a master plan, was very successful. At the time of designation the area now covered by Milton Keynes Council was administered by four urban and rural district councils. In 1974, the Borough of Milton Keynes was created as a Borough Council. The new council and Buckinghamshire County Council had representation on MKDC. In 1992 MKDC was wound up and its assets were transferred to various bodies. Unlike other new towns, many community assets in MK were covered by section 7(1) planning consents and were not transferred to the local authority as envisaged. Instead many were retained by the Commission for New Towns (CNT). CNT continued to market these developments. MK Marketing, a local agency, was set up with a £2m budget to promote the marketing of MK. In the public service cuts of the early 1990s this was cut to £1m and then the agency was abolished a year later. A local Community Foundation was set up to act as freeholder for some community assets and land was transferred to them with an endowment package to cover maintenance. Remaining community assets went to MKC & Bucks CC. Linear parks, which combined the main flood defence system and park land for Milton Keynes, transferred to the MK Parks - 8 - Trust with a £20m endowment portfolio to finance their upkeep. MKC is the freeholder of their 999 year lease thereby ensuring that the parkland cannot be developed commercially. Bucks CC & MKC received various assets plus a package which would supposedly pay for their upkeep. Included for MKC were the Food Centre and the Bowl as income generators, neither of which delivered the income expected. In 1997 Milton Keynes Council became a unitary authority with responsibility for all local government services for Milton Keynes. Assets and services were transferred from the County to the Borough. MKC was the only unitary not to simply adopt the County organisational structure, and a number of innovative solutions involved the transfer of services to the voluntary sector and partnerships working. The Treasury were fully reimbursed for their investments in MK via development income receipts in 1997. CNT was wound up in 1998 and its assets passed to English Partnerships (EP). In 2008 EP was subsumed into the Homes & Community Agency (HCA). Milton Keynes Partnership Committee (MKPC) was established with representation from HCA, MKC, business, voluntary and wider public sector. MKPC was given statutory development control powers for the expansion areas and a marketing budget to drive growth of the city. A new body, initially chaired by Lord Rooker, covering MK and the South Midlands Growth Area was set up.