Gilbart J has this week granted Faraday Developments Ltd (FDL) permission to apply for judicial review of the decision by West Berkshire Council to enter into a development agreement with St Modwen Developments relating to the intended redevelopment and regeneration of the London Road Industrial Estate (LRIE) in Newbury. The agreement was valued at £125million in the VEAT notice published by the Council in the Official Journal of the European Union. FDL have substantial property and commercial interests in the LRIE and were joint venture partners in Wilson Bowden Developments’ bid to be the Council’s development parter for the project.
The grounds of challenge allege (i) that the Council has failed to comply with its duty under s.123 of the Local Government Act 1972 to obtain the best value reasonably obtainable for the disposal of its property interests under the agreement and (ii) that the agreement was within the scope of the Public Contracts Directive and Regulations and therefore ought to have been subject to public procurement under those provisions. A parallel claim under the Regulations has been conjoined with the judicial review proceedings.
The procurement grounds raise issues of potentially wide significance as to the circumstances in which development agreements must be subject to public procurement.