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Agenda and minutes

Venue: Merton Civic Centre

No. Item


Apologies for absence


There were no apologies received.



Declarations of pecuniary interest


There were no declarations of pecuniary interest.



Call-in of "Clarion Estate Regeneration Programme Support" pdf icon PDF 378 KB

Additional documents:


The Chair reminded Commission Members that this meeting is not to take a second look at a decision made by Cabinet. It is rather to decide whether the decision taken is in accordance with our principles of decision making. In this case the challenge is that the decision taken has not been proportional to the desired outcome, is a presumption in favour of openness and there has been no consideration of alternatives.


Councillor Ed Gretton was invited to introduce the key points described in the call-in form;


  • The financial assessment which forms the basis of the decision is extremely out of date and was undertaken during the bleak economic circumstances. The Council cannot make a safe, reliable and proportionate decision using a financial assessment that was formulated during the pandemic.


  • References to an ‘earn out’, if the project does make a return in the end, are not reliable or advisable. Earn outs are notoriously difficult because the payer, in this case Clarion, controls its own accounting policies, controls its own costs and sets out how it calculates its own profit, so it's extremely rare for these earn outs to ever pay out. 


  • Another critical point is originally there were going to be 608 homes in High Path, whereas now there's going to be up to 2300 homes because of the changes to the arrangement. The Council's estate's plan states that the aim is to improve the community but if you move a community from 608 homes to 2,300 it's very difficult to see how that's going to improve the community with such a real risk of over population and overcrowded housing. 


The Head of Regeneration, commented that the clawback is a suspension and not a waiver. There is a mechanism in place that if the project breaks even the clawback will be repaid. We have a robust analysis that will be refreshed. Viability assessments are refreshed and will need to be refreshed annually for the duration of the project.


In response to questions from Members of the Commission, the Head of Future Merton and James Kinnersly from SQW explained;


The financial model used at that time was in line with government guidance and policy and GLA guidance and policy. Merton has no control over how Clarion finance but it is worth noting that that Industry standard for development finance would be 6-7%. 5% is competitive.

Stock transfer agreement had a number of controllable mechanisms for decent homes standard. Amendments were not sought. Obligation for delivery of decent homes either via refurbishment or estate regenerations through new builds.


The Chair asked Members to consider the information provided in response to the call-in request and decide whether or not to refer back to Cabinet for reconsideration.


Cllr Nick McLean moved that the Commission refer the matter back to Cabinet due to the issues of proportionality and complexity. The matter only appeared at scrutiny a few days before Cabinet and it needs to be looked at again and reviewed. This was seconded by  ...  view the full minutes text for item 3.


Exempt Appendices C-H


Taken with Item 3.