Havering Council poised to sell off car parks in a bid to plug budget gap.

Local democracy reporter Sebastian Mann today writes in the Havering Daily.

Havering Council is poised to sell off six carparks to its own holdings company in a bid to plug its budget gap.

The council, which entered 2024 with a £32.5million hole in its budget, will ‘dispose’ of the sites to Mercury Holdings Ltd with a view to building new homes in the borough. 

Selling the off-street car parks – situated in Hornchurch and Romford – will net the authority £8.69m. 

A council document, recommended for approval, lists the following sites for sale: Como Street car park in Romford; Keswick Avenue in Hornchurch; Dorrington Gardens in Hornchurch; Angel Way in Romford; Century Youth House in Albert Road, Romford and land off Priory Road in Romford. 

None of the six parcels of land have yet secured planning permission, and so the council will need to rent the land back from Mercury Holdings at a very low, or “peppercorn,” rate for the time being. 

Once the sales have been completed – in exchange for capital shares, which would later be converted into cash – formal planning applications can be expected. The car parks are not anticipated to be out of use any time soon. 

Despite the loss of direct revenue, which is estimated to be around £190,000 a year, officials are confident that turning the six sites into homes would balance out.

They say it would lead to an increase in council tax revenue and potentially reduce the homelessness budget, both of which are “likely to more than offset” any losses. 

The authority has also considered increasing the rates in nearby car parks. 

At a July meeting of the authority’s cabinet, members approved a business plan for Mercury Holdings up until 2026.

The list of proposed developments were made exempt from the public and the number of houses on each site has not been specified. 

However, a council report outlined the company’s commitment to a “significant” scheme in Como Street. 

Mercury Holdings Ltd, owned entirely by Havering Council, was incorporated in 2015 and holds a wide portfolio of private-sector housing. 

Redevelopment of the land is expected to take between two and three years. If planning permission could not be secured, then the council would be obliged to buy the land back from Mercury Holdings at the original price and reimburse it for any losses. 

The council’s cabinet agreed a ‘medium-term’ plan until 2028 to sell its public assets to help with its finances in February 2023. 

Last month, it was revealed that the council had accepted a £54m loan from the central government after finding itself teetering on the edge of effective bankruptcy.

It will need to undergo an external financial audit and cut any “superfluous” spending, as per finance minister Simon Hoare’s instructions. 

Councillors recently agreed that the £54m, to be paid back over the next 20 years, should have been a grant. However, council leader Ray Morgon told the Local Democracy Reporting Service the government was unlikely to change its offer. 

The car park scheme will come into effect on Tuesday, 16th April, unless the report is called in for debate before 15th April. 

Officials had initially considered putting the land on the open market, but declined as it could “frustrate” Mercury Holdings’ business plans and the council’s intentions to raise money within the current financial year.  

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