Decision

OVERVIEW AND SCRUTINY COMMITTEE

WEDNESDAY 24 JULY 2024

RESOLUTIONS
 
The following are the
resolutions made by the Overview and Scrutiny Committee at the
above meeting.
 
Please note that these are not
the full minutes, which will be published at a
later date.
 
Date
of resolution: 24 July 2024
 
If you have any queries about
any matters referred to in this notice, please contact Artemis
Kassi, Senior Scrutiny Officer, E-mail: artemis.kassi@newham.gov.uk
 
 
Item
5: Minutes
 
i) 
That the Minutes of the Overview and
Scrutiny Committee held on 4 June 2024 be approved.
 
Item
6: Call In of Cabinet Decision: Royal Victoria Dock Bridge –
Allocation from Capital Programme
 
i) 
That the decision by Cabinet on 4 June
2024 concerning the Royal Victoria Dock Bridge – Allocation
from Capital Programme be referred back
to Cabinet for reconsideration.
 
ii) 
That the reasons for the referral to
Cabinet be noted, as follows:
 
a) 
economic benefits
The
Committee considered that the Cabinet needed to be able to explain
the wider economic and regeneration benefits of the proposed
enhanced Royal Victoria Dock Bridge (RVDB), which would require
analysis of these economic benefits to be included in the report to
Cabinet. An explanation of the wider socio-economic benefits of the
RVDB should be contained in a new Cabinet report that also notes
the rate of return on any specific Newham Council investment;
b) 
RVDB specifications
The
Committee considered that the Cabinet needed to reconsider the RVDB
specifications. The Committee noted that, without the additional
£13m in contributory funding from Newham Council, the
developer had committed to building a future proof bridge which
complied with Transport for London, GLA and Newham Council
requirements. The question concerned the specifications of the
enhanced bridge to be constructed and the need for Cabinet to
assure itself of the extra specifications of the enhanced
bridge;
c) 
financial considerations
The
Committee noted that Newham Council did not have the financial
resources to build the RVDB to the specifications proposed and
doing so would entail difficult choices between spending on
services or the RVDB, as per the comments of the Finance Officer
within the report (Cabinet Report dated 4 June 2024 at para.
9.1.8);
d) 
further financial and legal
considerations
Newham
Council’s contribution of £13.2m would operate as a
subsidy to developers, setting a dangerous precedent. Such a public
subsidy, with no taxation stream or business rates due to the
RVDB’s enterprise zone location, would be in contradiction of
“Fairer Newham” objectives, with disproportionate
benefit accruing to certain wards but the expense being borne by
all Newham wards. The Cabinet should provide assurance that, should
the proposal proceed, this would not set a precedent;
e) 
Gross Value Added (GVA)
report
The
Committee noted the absence of a GVA report, despite comments made
during the meeting about the need for an enhanced bridge to support
wider regeneration benefits, and that Newham Council was acting as
a development agency, not as a council;
f) 
Value for Money (VfM)
The
Committee noted that Cabinet had not seen the business plan for the
RVDB, although the Mayor had been
provided with due diligence updates via the Royal Docks Board. The
Committee considered that the changed RVDB specifications resulted
in a £13.2m cost to Newham Council and an opportunity cost of
£1m per annum (£49.5m over the term of the loan). The
Committee further considered that this did not represent Value for
Money, especially as a 1% increase in Council Tax equates to
roughly the same each year; and
g) 
governance
The
Committee considered the report tabled to be misleading in several
ways, leading to queries about the basis of the Cabinet decision.
This included the report being insufficiently detailed (e.g. when
compared to the detail provided orally during the Call In Meeting, and insufficiently detailed or absent
information concerning the original application).