Trustees set to rubber stamp process to remove covenant restriction on building in Barham Park

The proposed George Irvin development of four 3 storey houses in Barham Park that would require the removal of the covenant

Trustees Meeting Agenda September 5th 2023

Reader will be familiar with the controversy over the proposal by funfair owner and property developer George Irvin to replace two  modest two storey park workers' houses  in Barham park with 4 three storey houses. At Planning Committee the elephant in the room was the restrictive covenant on developing the site, dismissed by officers as not a planning consideration. Planning permission was granted despite massive resident opposition.

Readers will also remember that the Trustees of Barham Park consist of Brent Council Cabinet members, chaired by Brent Council Leader, Muhammed Butt. Readers will also recall disquiet over Irvin giving free tickets away to councillors and concern over alleged social connections between Irvin and councillors, including Muhammed Butt.

Now the elephant in the room is due to make an appearance at the Barham Park Trustees meeting at the Civic Centre on Tuesday September 5th. 

The proposal by the existing owner, contrary to the terms of the restrictive covenants, is to seek consent from the Trust Committee to amend the restrictive covenants to enable him to demolish the existing buildings and erect 4 houses on the combined plot, whereas currently the restrictive covenants allow for only 2 dwellings on the combined plot.

However, the public and backbench councillors will not be allowed to know the size and value of the elephant/covenant as the result of an Independent Valuation has been 'restricted':

"Appendix 3 is not for publication as it contains the following category of exempt information as specified in Paragraph 3, Schedule 12A of the Local Government Act 1972, namely: “Information relating to the financial or business affairs of any particular person (including the authority holding that information."

There is a clue to how it could be worked out in the papers for the meeting:

The varying of the restrictive covenants is a matter for the Trust Committee and Charity Commission. As beneficiary of the restrictive covenants, the Trust Committee can negotiate a monetary consideration for varying the restrictive covenants. Simply put, the monetary consideration is usually determined by what the market value of the 2 additional completed properties might be and deduct from that the estimated development costs to arrive at a gross development value. This gross development value is then typically split 50/50 between the Covenantor and Covenantee by negotiation and is the formula used in the valuation for varying the restrictive covenant.

Developer, George Irvin,  will of course be a beneficiary as well but the report attempts to sweeten the pill by suggesting that the proceeds from varying the  covenant will be used to the benefit of the park, which as Trustees would have to do anyway, although they only refer to 'potential':

Officers will explore the potential to reinvest the proceeds from varying the restrictive covenants in respect of 776-778 Harrow Road back into the Estate as part of developing a multi-faceted investment strategy for the refurbishment project. Accordingly, the proceeds would count as permanent endowment funds (capital funds which are held in trust for the benefit of the charity over the long term and are subject to restrictions as regards how they may be used).

Those proposals on  refurbishment are a separate part of the agenda for the meeting and will be covered in a separate blog post.

So is there any mention of the 1,000 signatures plus petition calling for the covenants to be upheld? No - neither in the report or as as a Petition Presentaton Agenda item. A new elephant in the room!?

A key question is whether the Agenda or accompanying reports leave open the possibility of the Trustees deciding not to vary the covenants at all and thus fulfill their role in protecting the Tutus Barham legacy. The answer is already implied - they will protect the legacy by using the covenant variation monies to improve the park not by refusing to negotiate  a variation.

So what do officers' recommend to the Barham Park Trust Committee?

Recommendation(s)

 

That the Barham Park Trust Committee RESOLVES

 

Agree for the Director for Environmental and Leisure Services in consultation with the Chair of the Trust Committee to negotiate in principle the variation of the restrictive covenant in respect of 776 and 778 Harrow Road for the best terms that can reasonably be obtained, subject to final approval by the Trust Committee, and any approval required by the Charity Commission under the Charities Act 2022 and 201l.

 

So the Committee is asked to agree to hand over negotiation to Muhammed Butt and the Director and, subject to Charity Commission approval,  will then rubber stamp it. All done by a small group of cabinet members, albeit wearing trustee hats - with, as I said at the beginning no resident or backbencher input.

 

There is one other area that may be considered by supporters of the covenant and critics of the process regarding whether the owner/developer is a 'connected person' and thus a conflict of interest arises. This is the relevant section of the report:

5.7 Use of s117, pre-supposes that the owner of the cottages is not a “connected person” within the meaning of section 118. Connected persons2 includes:

 

“Who at the time of the disposition in question, or at the time of any contract for the disposition in question are, for example—

(a) a charity trustee or trustee for the charity…

(c) a child, parent, grandchild, grandparent, brother or sister of any such trustee or donor,

(d) an officer, agent or employee of the charity…

(f) a person carrying on business in partnership with any person falling within any of paragraphs (a) to (e)”

 

5.8 In accordance with s120, any disposal of Trust land over seven years to a third party is also subject to similar requirement imposed by s119 above.

 

Furthermore, the disposal of charity land, or letting for more than two years to a third party or connected person requires consultation in the form of being notified in the local press and onsite and providing for at least one calendar month, from the date of the notice, for members of the public to make representations.

 

5.9 Accordingly, if the owner of the cottages is a connected person, or a conflict of interest is deemed to exist in the decision making process re the disposal (for example, amongst other things because payment of a capital sum to the Council (as trustee) for releasing the covenant would reduce the contribution required to be made in practice by the Council (as local authority) to subsidise the running of the charity), the Trustees should request the Charity Commission consider the Qualified Surveyor’s Report (referred to under the 2022 Act as the Designated Advisor’s Report (DARs) (valuation) and release or varying the restrictive covenant pursuant to their s105 Charity Act powers, to authorise dealings with the charity property.

 

On the same Agenda there is an item on governance which proposes the first update since 2013. The item makes clear that Brent Council is the corporate Trustee of Barham Park but must ensure that the management of the Charity and its interests is separate from its responsibility as the Council and its interests Decisions have to be made solely on the basis of the former. What is in the interests of the  Charity may not be in the electoral interests of the Council. See 10a Appendix A for the changes.

Interesting...

Review of Barham Park Trust Governance Document PDF 137 KB

• View the background to item 10.

This report sets out for review proposed updates to the Barham Park Trust Governance and Guidance Document. Primarily designed to reflect changes following organisational restructures in the council and updated guidance issued by the Charity Commission.

Additional documents:

• 10a. Appendix A - Reviewed Governance and Guidance Document 2013 PDF 865 KB
• 10b. Appendix A(i) Cllrs Guide to a Councils Role as Charity Trustee (Appendix B Trust Governance Document) PDF 253 KB
• 10c. Appendix A(ii) Charity Commission Guidance Conflict of Interests (Appendix C Trust Governance Document) PDF 511 KB
• 10d. Appendix A(iii) Charity Commission Essential Trustee Guidance (Appendix D Trust Governance Document) PDF 943 KB