Published On: Sat, Apr 13th, 2024

The UK town forced to sell off six car parks to plug £32m ‘black hole’ | UK | News

A London council is set to sell off six car parks to its own holdings company, Mercury Holdings Ltd, in an attempt to fill a £32.5million budget deficit. Havering Council, which borders Essex, plans to use the sites for new housing developments within the borough.

The sale of these off-street car parks, located in the towns of Hornchurch and Romford, will bring in a substantial £8.69m for the local authority – with the Tories currently the largest party on the council.

As none of the six plots have secured planning permission yet, the council will need to rent the land back from Mercury Holdings at a minimal, or “peppercorn,” rate for now. Once the sales are finalised in return for capital shares, which would later be converted into cash formal planning applications can be expected.

It’s not anticipated that the car parks will be out of commission anytime soon. Despite the potential loss of around £190,000 in direct revenue annually, officials are optimistic that converting six sites into residential properties will pay off. They argue that it would lead to increased council tax income and could potentially decrease the homelessness budget, which are “likely to more than offset” any financial shortfalls, Essex Live reports.

The council is also contemplating hiking rates at nearby car parks. In a July cabinet meeting, members greenlit a business strategy for Mercury Holdings through to 2026.

Details of the proposed developments were kept confidential, with the exact number of homes planned for each site remaining under wraps. Nonetheless, a council report highlighted Mercury Holdings’ pledge to a “significant” project on Como Street.

Mercury Holdings Ltd, wholly owned by Havering Council, was established in 2015 and boasts an extensive array of private-sector housing. The redevelopment process is anticipated to span two to three years.

Should planning permission be unattainable, the council would have to repurchase the land from Mercury Holdings at the initial cost plus cover any incurred losses.

In February 2023, the council’s cabinet sanctioned a ‘medium-term’ strategy to offload public assets until 2028 as a financial bolster. Just last month, it emerged that the council had secured a £54m loan from central government after nearly succumbing to effective bankruptcy.

Finance Minister Simon Hoare has ordered an external financial audit and a reduction in any “superfluous” spending. Despite councillors agreeing that the £54m, due to be repaid over two decades, should have been granted, council leader Ray Morgon told the Local Democracy Reporting Service that it’s unlikely the government will alter its offer.

The car park scheme is set to launch on Tuesday, April 16, unless the report is called in for debate prior to April 15. Initially, officials contemplated selling the land on the open market, but this idea was dismissed as it could potentially “frustrate” Mercury Holdings’ business plans and the council’s aim to generate revenue within the current fiscal year.

The sites listed for sale include Como Street car park in Romford, Keswick Avenue in Hornchurch, Dorrington Gardens in Hornchurch, Angel Way in Romford, Century Youth House in Albert Road, Romford and land off Priory Road in Romford.

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