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Town Hall ‘rip off’ claim over £193m Mount Pleasant sale

Town Hall says Islington residents are losers of the scheme approved by Boris Johnson

08 September, 2017 — By Koos Couvée

Councillors Diarmaid Ward and Richard Watts at the Mount Pleasant site this week

ROYAL Mail was this week accused of “ripping off ” Islington residents after it emerged it made a £164million “profit” on the sale of the Mount Pleasant site.

The privatised postal giant sold the six acres of land in Clerkenwell to developer Taylor Wimpey for £193.5m in a deal announced last week.

But the land was valued at just £29m in its asset portfolio when it was sold off in 2014 amid accusations the then Coalition government had undervalued the company’s true worth and landed taxpayers a very bad deal.

Islington Council leader Richard Watts said the government should now insist Taylor Wimpey build more affordable homes on the site than was agreed by former London Mayor Boris Johnson. He controversially took the decision out of Islington and Camden councils’ hands and agreed a 681-luxury flat scheme with just 163 “affordable” homes.

“The sale of Mount Pleasant has exposed the true extent of the rip-off which Boris Johnson and the now privatised Royal Mail Group subjected the residents of Islington and the whole of the country to,” Councillor Watts said. “There was a consistent effort to undervalue Royal Mail’s assets [before it was privatised].”

An artist impression of the scheme approved by Mr Johnson

The Town Hall boss said that Royal Mail had always refused to speak to Islington, instead focusing on lobbying Mr Johnson’s office. In an unprecedented move, the former Mayor then took the decision out of the local authorities’ hands before Royal Mail’s planning application had even reached planning committee stage.

“This is a genuine scandal,” Cllr Watts added. “They denied ordinary people affordable homes on that site by Royal Mail suggesting and Boris agreeing a ludicrous planning permission that we would never have given permission for. The pretext on which Boris made the decision, that it would
be [approved] quicker, was always nonsense and has been exposed by the fact that three years on, nothing has happened on the site.”

“This was always about Boris taking it upon himself to give Royal Mail a cushy deal. The losers from that are the people who live in Clerkenwell and King’s Cross who need rehousing.”

Cllr Watts said that around 537 new council homes could be built on the site – at £305,000 cost per unit – if the government introduced a windfall tax on Royal Mail to recoup the £164m.

A Royal Mail spokeswoman said: “We believe that the sale price properly reflects the current market. Investors were provided with sufficient disclosure to assess the potential value of Royal Mail’s property portfolio in the prospectus. Net book value doesn’t represent the value of properties if they were to be sold. The majority of our sites and properties are in operational use, and as such they are valued in relation to the cost of purchase – not what they could be sold for.”

Liberal Democrat leader Vince Cable, the former minister responsible for the privatisation of Royal Mail, said: “The Mount Pleasant valuation was carried out by an inde- pendent valuer and that report factored into the share price via the prospectus. A higher share price would have risked the failure of the offering itself, at a much higher cost to the taxpayer.”

The Department for Communities and Local Government had not responded to a request for comment when the Tribune went to press.

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