GBC’s £81 Million Investment Proposal for Student Accommodation Scrapped

Published on: 25 Oct, 2018
Updated on: 29 Oct, 2018

A computer-generated image of new student accommodation planned by the University of Surrey at Manor Park

News that a proposal to invest £81 million in student accommodation at the University of Surrey has been scrapped has surfaced this week. The press and public were excluded from the full council meeting on October 9, when the decision was discussed.

The absence of any public debate on the major £81 million investment has been criticised. £81 million is the equivalent of over 85% of GBC’s annual expenditure.

One councillor commented: “No wonder Guildford residents ask ‘what’s going on?’ at their borough council,” and another, “There is far too much of a culture of secrecy… this is public money that is at stake?”

The Guildford Dragon NEWS has been informed of two reasons behind the council’s decision. Firstly, that the university may have found preferable investment offers elsewhere and, secondly, that as so much student accommodation is being constructed in the town there is considered less need for it to be built on campus.

The news that the council had changed its mind, or admitted defeat, over the investment came unheralded during a short GBC Executive meeting on September 25. In a statement, included on the agenda only as “Leader’s Announcements” and missed by many, including borough councillors, Council Leader Paul Spooner (Con, South Ash & Tongham) said: “Over the last six months, officers have been looking at possible options for investment, hence putting an £81 million allocation in to our budget…

Cllr Paul Spooner

“There will be a confidential update to all councillors at the next meeting of the full council on 9 October. Whilst it appears that the business case for investors to put money into Student Accommodation in Guildford may be strong, as Leader of the Council, I have decided to put the project for any council investment on hold for the foreseeable future.”

No press release announcing the major financial policy turnaround was issued.

Explaining the claimed need for confidentiality Spooner said it was required because: “…third parties are covered by non-disclosure agreements…” and that the “…information within the report to council contained some of the information and commented upon it.”

A further reason given was: “The report also contains information, which if disclosed, could adversely affect the commercial interests of third parties, who we understand may issue an investment prospectus to the market in due course.”

Cllr Tony Rooth

Cllr Tony Rooth, who has crossed swords with the council leader on this and several other topics since he was sacked from the Executive and became an Independent councillor for his Pilgrims ward, said: “Openness and transparency are key principles in council decision making councillors have no monopoly of good ideas but the pro and cons of any new investment in student housing were not debated in public.

“The council could then have assessed the risks and rewards but [it] has never admitted that the University of Surrey is the obvious recipient of £81 million. Little information has been made public although my fellow Independent councillor, Bob McShee (Worplesdon), asked detailed questions at council in February but only received vague answers.

“Cllr. Spooner read out a written statement at the Executive… that the council project to invest £81 million in student accommodation would not progress for the foreseeable future. However, no reasons are given and the decision does not appear to have been publicised.

“No wonder Guildford residents ask ” what’s going on ” at their borough council?”

Cllr Caroline Reeves

The leader of the opposition at GBC Caroline Reeves (Lib Dem, Friary & St Nicolas), said: I suspect that given the large number of student unit planning applications coming forward in the town centre, the proposal became less financially viable. There are potentially 1,000 units in Walnut Tree Close alone, plus others in Friary & St Nicolas, on the Guildford College campus if won at appeal, and likely applications in Onslow ward. We are also aware that student housing is planned in Woking and other neighbouring authorities.

But Reeves was more forgiving regarding the secrecy employed. She said: “As a third party was involved in the decision-making process, it’s surely not unusual for some of the information to be sensitive and therefore confidential from a business perspective? Information has already been published as part of the council’s capital and investment outturn report, presented to full council in July.”

A spokesperson for the University of Surrey declined to comment on the GBC decision but said: “…we provide a range of accommodation options for our students both on and off campus. We have just opened more than 470 new bedrooms this autumn, with a further 680 rooms under construction for completion next year. This will complete Phase 2 of our Student accommodation development on Manor Park.

“The £80m capital cost of Phase 2 will be fully funded by the university, as originally planned…” The spokesperson then seemed to confirm that investment proposals other than that of GBC’s were now being considered adding, “we are at the very early stages of planning for Phase 3 but no decision has yet been made on the most appropriate funding route.”

Cllr Susan Parker

Susan Parker (GGG, Send) has been a long-term critic of the lack of openness at GBC. She said: “I think that more about this decision should have been discussed publicly. There is far too much of a culture of secrecy in our borough. Why should the people of Guildford not have learnt more about this – especially since this is public money that is at stake?

“Guildford was planning to invest in student housing with public money and now isn’t. I don’t know why so much of this information was deemed commercially sensitive. It isn’t as if Guildford Borough Council is a publicly traded entity on a regulated stock exchange – so it was not price-sensitive information. This is, after all, not just GBC’s money, it is public money that was being invested, and the public has a right to know.

“There is, of course, a need for some genuinely commercially sensitive information being restricted, but only that should be kept secret. Council meetings this year in March, May, July and October all involved “pink sheet” matters which were confidential, which councillors are not allowed to disclose. This is a way of defusing criticism, and it is unacceptable.”

Brian Creese, the spokesperson for Guildford Labour, said: “It is not clear why this development has faltered, but we may assume the current climate of uncertainty may have contributed.

“This was not the only student accommodation scheme in development, so we hope the chronic lack of both student and private rental capacity will be addressed soon, but note that accommodation away from campus is likely to add to the strains on Guildford’s creaking public transport system.”

Responses to GBC’s £81 Million Investment Proposal for Student Accommodation Scrapped

Martin Elliott Reply

October 25, 2018 at 7:17 pm

There may be another reason that the Conservative councillors don’t wish to discuss this.

Teresa May’s announcement that this government will remove the cap on borrowing for housing construction by councils removes the risk (said to be low!) of being a pseudo-bank for their friends in the university. Instead of a cascade down of rented property from excess student accommodation, GBC can finally borrow and build sufficient social housing for the borough.

However the timing for the cap removal is 2021-22, and Philip Hammond is talking of only £1 billion of loans between 400 councils, or just £2.5m each.

Anybody want to bet on it happening as announced at the Conservative conference?
Bernard Parke Reply

October 25, 2018 at 9:01 pm

As a council tax payer, I am surprised that this whole project was even considered when we so badly need affordable housing for our local key workers?

Perhaps it is also worth mentioning that many of our own children can no longer afford to live in their hometown.

Has the time now come for us all to speak to our local councillors and ask them for an explanation?
Jim Allen Reply

October 26, 2018 at 1:41 am

A sensible decision (at last). Now the decision on SARP should follow ASAP so that Thames Water PLC can take steps to rebuild Moorefield’s waterworks without moving it. This is necessary so we don’t get flooded with even more claims of commercial sensitivity for a project which will cost £350 million to complete
C Barker Reply

October 26, 2018 at 9:58 am

Never mind the students. GBC should be replenishing their housing stock for the thousands of people on the waiting list.
Valerie Thompson Reply

October 26, 2018 at 2:03 pm

It’s what many people have been saying ever since we heard about the proposal. What also annoys me is the dreadful waste of money that GBC has incurred while preparing this development, which should never have been considered.

One still queries what the cosy arrangements are between the university and the council. Why have the council not encouraged the university to build their own student accommodation? Why don’t they just get on with building low-cost flats in town for those who are on the council waiting list? Why is GBC still not being open about their discussions on many subjects?
RWL Davies Reply

October 27, 2018 at 4:19 pm

Will GBC ever recognise and address realities? What exactly is its agenda?

This morning walked the town centre, Millbrook, and the Odeon – Orleans Restaurant – Casino- railway station – bus station areas.

Apart from the High Street and parts of North Street, to call it a “dysfunctional mess” is overstating its appeal and relevance to Guildford’s future.

There are no reasons, apart from GBC it would appear, why Guildford cannot be an exemplar of a 21st-century city, given obvious infrastructure improvements. All the basics are in place.
Jules Cranwell Reply

October 30, 2018 at 6:41 pm

Another shining example of this leadership’s staggering incompetence.