European Commission closes case against UK and York CC over land development contract

The European Commission has closed its legal case against the UK over the award of a contract by City of York Council relating to the development of a piece of land.

This was despite the fact that the Commission found that the initial contract for the Osbaldwick site did not comply with EU public procurement rules.

City of York Council awarded a contract for the land directly to the Joseph Rowntree Housing Trust in 2002.

This was a public works concession contract, the Commission said, and so should have been awarded following an EU-wide tender process. The failure to follow the correct procedures meant certain companies could have been denied the opportunity to bid for the contract, it argued.

In June 2009, the Commission issued a “reasoned opinion” under EU infringement procedures that formally requested the UK to change the procedures followed.

The UK authorities have since taken measures to reopen the contract to competition. As a result, the project will not be realised on the basis of the original concession contract but instead be carried out in four distinct phases – each of which will be awarded following a separate tendering process.

The Commission said another reason behind its decision to close the case – rather than refer it to the European Court of Justice – was that the UK had also put in place measures to ensure a similar situation did not arise in future.

In particular, it cited guidance on how public procurement rules apply to the award of concession contracts for land development. “This gives the additional guarantee that in future, contracting authorities across the UK will comply with EU law in this area,” the Commission said.

York chief executive Kersten England said the local authority was pleased that the EU Commission had decided to close the case regarding Osbaldwick and that the council was no longer in infringement of procurement rules.

She added: “The council is now considering how this decision will impact on the authority's disposal of the site to the Joseph Rowntree Housing Trust. The council has long recognised the importance that this new development will have in the city, providing much-needed homes for the future."