`Having carefully considered that balance of public interest in this case, the Council has concluded that the public interest in maintaining the exceptions outweighs the public interest in disclosure...'
It might have only just been exposed at a Salford Council meeting recently but for years developers building thousands of flats have been avoiding paying large sums in planning obligations – or Section 106 payments – because of `viability' issues ie their profits won't be large enough.
The practice, documented by the Salford Star over the last eight years, came under a wider spotlight after Assistant Mayor for Planning, Derek Antrobus, finally slated the "public scandal of immense proportions" at a Salford Council meeting last week, following more Salford Star exposes about a £4.4million loss to the city (plus affordable housing) from just two blocks of apartments being proposed at Clippers Quay (Amstone Ventures) and Chapel Wharf (Acroy/Dandara) - see here and see here and see here for previous articles.
Back in November, the Salford Star put in a Freedom of Information request to Salford City Council asking to see the `viability assessment' submitted by City Suites Ltd, which avoided a whopping £476,781 in payments for a 17 storey block in Greengate comprising 260 `turn key' apartments, complete with gym, swimming pool and a rooftop lounge - "aimed at young professionals, executives and business people" (see previous Salford Star article – click here).
City Suites should have been paying £826,781 in planning obligation fees but, after submitting a `viability assessment' - which Council officers agreed showed the company wouldn't get a `reasonable developer return' – it was asked to cough up a mere £350,000 towards `public realm'.
What was surprising about this particular planning application and subsequent Section 106 reductions was that the officers' report itself inferred that the company should have absolutely no problem in selling the properties... "The reality...of the past few months is that a buoyancy has returned to the market"...
How would anyone know whether the `viability assessment' showing a lack of developer return (profit) was accurate, and that City Suites weren't just trying to screw Salford people out of vast sums of money?
The Star believed that the developer should be accountable to Salford people and asked to see the `viability assessment' under the Freedom of Information Act – particularly in light of a recent case in London...
Here, at a tribunal involving Southwark Council/Lend Lease v the Information Commissioner it was agreed that "the importance...of local people having access to information to allow them to participate in the planning process outweighs the public interest in maintaining the remaining rights of Lend Lease", and former `confidential' development figures were disclosed.
The Salford Star put this information to Salford Council and, almost three months later (they are supposed to reply in twenty days), the request has been refused, with the Council stating the circumstances are `different' and that it is `in the public interest' to keep the figures secret. Or, in more Council-speak...
`The case is not an authority for the proposition that "viability appraisals must be disclosed" in all cases. Whether disclosure is required will depend upon the particular circumstances and the balance of the public interest in disclosure versus the public interest in non-disclosure in the light of those. In fact, in the Southwark case the balance of public interest fell differently in respect of different parts of the viability assessment and only some parts of it were required to be disclosed. Furthermore, the City Suites development is substantially different (both in terms of scale and the manner of its funding) from that which the Southwark case was concerned with, meaning that information of the type that was required to be disclosed in Southwark would not automatically be disclosable in this instance.'
The Salford Star has asked for an internal review of the decision.
Meanwhile, the application by Acroy/Dandara to build 995 flats and `commercial floorspace' in four blocks up to 23 storeys high at Chapel Wharf next to The Lowry Hotel goes back to the planning panel on 5th February after being deferred at the last meeting for having too many one bedroom flats. The developer has changed this to meet Council policy – but is still set to avoid paying £2.76million in Section 106 obligations...and providing any affordable housing.
• The full Salford Council response to Salford Star's Freedom of Information request...
"I write in reference to your request for information dated 6th November 2014, which the Council has considered under the Freedom of Information Act 2000 ("the FoIA) and, insofar as environmental information may be concerned, under the Environmental Information Regulations 2004 ("the EIR").
The Council confirms that it holds the requested information. However, the Council declines to release the information requested. It does so on the basis of the relevant exemptions under the FoIA or, insofar as environmental information is concerned, under the relevant exceptions under the EIR. As the Information Tribunal case cited and relied upon by you, namely London Borough of Southwark v The Information Commissioner and Lend Lease (Elephant and Castle) Limited and Adrian Glasspool (EA/2013/0163) (2014), considered only exceptions under the EIR (the Tribunal holding that on the facts of that case that the content of the viability appraisal concerned was environmental information) I shall address the relevant exceptions under the EIR first and in greater detail.
Before doing so I would like to state that it is the Council's view that your characterisation of the decision in the Southwark case does not appear to be accurate. The case is not an authority for the proposition that "viability appraisals must be disclosed" in all cases. Whether disclosure is required will depend upon the particular circumstances and the balance of the public interest in disclosure versus the public interest in non-disclosure in the light of those. In fact, in the Southwark case the balance of public interest fell differently in respect of different parts of the viability assessment and only some parts of it were required to be disclosed. Furthermore, the City Suites development is substantially different (both in terms of scale and the manner of its funding) from that which the Southwark case was concerned with, meaning that information of the type that was required to be disclosed in Southwark would not automatically be disclosable in this instance.
The exceptions under the EIR that the Council relies upon are as follows:
Regulation 12(5)(e) of the EIR: Confidentiality of Commercial or Industrial Information
This exception is engaged in respect of the environmental information that has been withheld. The Council considers that the information comes within the terms of the exception because, applying the test in Bristol City Council v Information Commissioner and Portland and Brunswick Squares Association (EA/2010/0012/24 May 2010), it satisfies the following:
a) The information is of a commercial or industrial nature. This is because the submitted viability appraisal records assumptions relating to capital values, rental, investor yield and expected sales rates, value per square foot and fit-out costs. This information, which the applicant advises reflects a bespoke model, would be of value to developers who may wish to compete with the applicant in the provision of such accommodation.
b) The nature of the information and circumstances in which in came into the Council's possession are such that the Council has an obligation of confidence in respect of it.
c) The confidentiality is protecting a legitimate economic interest, namely that of City Suites (Manchester) Ltd. for the reasons outlined in paragraph (a) above.
d) The confidentiality would be adversely affected by disclosure. Disclosure of the confidential information into the public domain would inevitably harm the confidential nature of that information by making it publicly available, and would also harm the legitimate economic interests that have been identified.
Regulation 12(5)(f) of the EIR: Interests of the Person Providing the Information
This exception is also considered to be engaged in respect of the environmental information that has been withheld. This is because the person who provided the information:
a) was not under (and could have not been put under) a legal obligation to supply it to the Council or any other public authority;
b) did not supply it in circumstances such that the Council or any other public authority was entitled apart from the EIR to disclose it; and
c) has not consented to its disclosure.
Both the above exceptions under the EIR are subject to a public interest test which must be satisfied before the exceptions can be relied upon (it is also to be noted that under the EIR a public authority must apply a general presumption in favour of disclosure). In applying the public interest test the Council has considered all relevant factors, including:
• The public interest in transparency concerning the development of land and the associated decision making in respect of planning applications.
• The public interest in the commercial interests of third parties making planning applications to the Council not being undermined by the disclosure of commercially sensitive material that has been submitted as part of the application process.
Having carefully considered that balance of public interest in this case, the Council has concluded that the public interest in maintaining the exceptions outweighs the public interest in disclosure. As noted above the circumstances in this case are substantially different from those in the Southwark case cited by you. In particular, the Southwark case concerned a development that was on a much larger scale than the development your request relates to and which entailed a substantial public funding commitment from the local authority involved. Consequently, the arguments in favour of disclosure are not as strong in the case of the information that you have requested and the balance of the public interest is judged to lie in favour of non disclosure.
Insofar as any of the requested information does not amount to environmental information, it is withheld by the Council under the exemptions to disclosure provided by section 43 and/or section 41 of the FoIA. These will be detailed somewhat briefly, given that much of the same ground is covered in the consideration above of the relevant exceptions under the EIR.
Section 43 of the FoIA – Commercial Interests
Section 43 is considered to apply because the disclosure of the information concerned is likely to prejudice commercial interests. The reasons for this are as detailed above in respect of the exception under Regulation 12(5)(e) of the EIR.
Section 43 is a 'qualified' exemption, which means that it is subject to a public interest test. The Council has applied the public interest test and has determined that, on balance, it is more beneficial to the public to withhold the information than to release it. In reaching this decision the Council has considered similar factors to those considered above when applying the public interest test in respect of the exceptions under the EIR referred to above.
Section 41 of the FoIA – Information Provided in Confidence
Section 41 is considered to apply as the information concerned was obtained from a third party in confidence and disclosure of that information could amount to an actionable breach of confidence. This is an absolute exemption, with no need for the Council to consider the public interest test.
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