In a landmark case the High Court has declared that Winchester City Council committed a serious, procedural and substantive breach of the public procurement regime. The High Court ruled that the decision by Winchester City Council to vary an existing development agreement was unlawful and has quashed a decision by the Council to proceed with the amended agreement.
Councillor Gottlieb, represented by Dentons Planning, Procurement and Public Law team, has won his procurement judicial review claim against Winchester City Council's decision to change an existing £165 million development scheme relating to Silver Hill, Winchester city centre.
The developer, Henderson Global Investors, and the Council agreed changes to a 2004 development agreement including a release from Henderson's obligations to provide 35% affordable housing, construction of a bus station and civic uses (including shop mobility and dial-a-ride premises and a market store). The size of the site was increased to include additional Council land and the amount of retail space was increased to permit the inclusion of a large anchor store.
The Council argued that the existing development scheme was unviable, the changes were needed to ensure that the scheme became viable and the scheme could not proceed without the variations.
Councillor Gottlieb, a local resident and member of the City Council, brought the legal challenge on the basis that the variations were "material changes" to the original contract for the scheme of development. Therefore, the variations amount to a new contract which had been awarded to Henderson without a competitive tendering exercise.
The High Court agreed that the Council's decision was a breach of procurement law and quashed the Council's decision to proceed. This leaves the Council with an existing scheme which it has informed the Court is not viable. The Court observed that the changes merit a rethink of the original scheme and an open competition which would allow new bidders with new ideas to compete.
This decision will have wider implications for other city councils and developers throughout the UK who seek to materially alter original developments.
R(on the application of Gottlieb) v Winchester City Council [2015] EWHC 231 (Admin)
The Dentons team was led by Stephen Ashworth (Partner), assisted by Carroll Dodd (Associate). Counsel Robert Palmer, Monckton Chambers, represented Councillor Gottlieb in the High Court.
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