Mid Devon Council in turmoil over housing company row

Cabinet can't operate after four Tories sacked (or quit, depending who you believe)

Mid Devon District Council is in turmoil after more than half of its cabinet left their roles in a dispute over the council’s controversial property development company.

The departures come after the Conservative group recently backed a proposal to continue supporting 3 Rivers Developments Ltd - set up six years ago as a way of building local homes while generating a profit for the council.

But current leader Bob Deed (Independent, Cadbury) does not support the new business plan for the company, and told a scrutiny meeting on Monday [13 February] that he had “fired” the four Tory members of his cabinet.

Conservative group leader Clive Eginton, who was the council’s deputy leader, hit back by claiming Cllr Deed had tried to sack them via another councillor – Chris Daw - and claims they have resigned.

Cllr Daw quit the Conservative group after voting against the new business plan last month. She is now one of just three cabinet members - all of whom are independents.

Cllr Deed says he will look to appoint replacement cabinet members in the coming days, but the Local Democracy Reporting Service understands a vote to oust him as leader could be brought to next week’s full council meeting.

Right now, the council's leadership team is stymied. Cabinet meetings can't be held as there are not enough members and it is unclear whether one scheduled for this morning [Tuesday, 14 February] will go ahead.

Mid Devon is under no overall control with no party having enough seats to command a majority. Full elections are due to be held in May.

3 Rivers has faced criticism and its viability questioned. The company is facing a substantial loss for one of its long-standing projects at St George’s Court in Tiverton, though previously the council has said the development is helping to regenerate the area and that others have been profitable.

The company has also been accused of lacking transparency. Detailed information about its performance often stays confidential and discussed in meetings that not not allow access by the public or press.

Those in charge have claimed this is necessary because of the confidential and commercially sensitive nature of the reports, which could hamper the firm and help competitors.

Monday’s scrutiny meeting discussed a ‘call-in’ of a recent cabinet decision to approve a new business plan for 3 Rivers for the next five years, which includes extra loans from Mid Devon.

Seven councillors asked for the decision to be scrutinised by the committee, including Cllr Deed. As leader he would normally chair cabinet meetings but was absent and recovering from a recent illness when the business plan was approved.

Among their reasons, the councillors believed the plan had received “inadequate consultation” and that there was “insufficient legal and financial consideration.”

However, during the debate, ex-cabinet member Colin Slade (Conservative, Lowman) – one of the four to leave last week and who also presents a programme on Radio Exe - said there had been “in-depth consultation” between senior councillors and Mid Devon officers.

“Maybe we didn’t understand, but the leader gave us the impression that he actually wanted to make 3 Rivers work, and that we should work with 3 Rivers directors to come to a business plan which was acceptable to the cabinet and onward, eventually, to the council.”

He added this would “protect” an income of £900,000 in Mid Devon’s forthcoming budget as interest from 3 Rivers.

If the business plan is not approved, council finance chief Andrew Jarrett confirmed the council would be “about £500,000 short” in its revenue budget next year, which would mean further spending cuts or taking money out of reserves.

He also warned the council would have to find “a very, very significant figure” if councillors decided to close 3 Rivers.

Cllr Slade said he believed this total to be “somewhere in the region of five to ten million pounds,” figures significantly higher than the council’s main revenue reserve which currently stands at around £2 million.

The former cabinet member also questioned why Cllr Deed had sacked one of the four Tories - Cllr Richard Chesterton - as they did not vote on the business plan.

The scrutiny committee decided to back a number of recommendations, including to not support the business plan in its current form. It asked for this item to be returned to full council for consideration.

The committee also suggested an external investigation be carried out into the council’s handling of the process.