The pace at which new development comes to market is expected to improve after the Government released new guidelines for councils on how to interpret a legal ruling that had been derailing projects around the UK.
Lobby groups claim the 2007 European Union “Roanne ruling” had left local authorities in doubt about the legality of development agreements entered into without a formal financial tendering process.
In the case, the European Court of Justice ruled France’s Roanne council should have used an EU-wide procurement process to select a development partner, contradicting the widely-held assumption that development agreements are property deals and do not require compliance with EU procurement rules.
The British Property Federation said many councils had since been taking the safest – but lengthy and most expensive – option of formally procuring development agreements through the Official Journal of the European Union.
The British Property Federation has been lobbying for the new guidelines, which were one of the calls in its manifesto earlier this year. It said the uncertainty over councils’ legal procurement requirements had caused delays to more than 70 development projects, with some schemes being abandoned altogether.
British Council of Shopping Centres’ executive director Edward Cooke, said: “The onerous application of public procurement rules following the Roanne case has been of real concern to the retail property industry for far too long.
“This guidance now needs to be comprehensively communicated and widely understood so that developers and landlords can press ahead with projects that may previously have been held up by the potential risk of falling foul of EU procedures.
“It is now important that local authorities take a pragmatic approach to the implementation of these procedures, so as not to delay vital regeneration projects unnecessarily.”
BPF chief executive Liz Peace said she hoped the new guidelines would lift the fog around the issue and clarify exactly when partnerships required a full tendering process via OJEU.
She said: “While the industry is fully supportive of moves to ensure procurement is democratic and that all deals are carried out in the public interest, it is vital, especially during more challenging periods of the cycle, that over the top democracy doesn’t start to contravene common sense.”