Council re-opens hotel procurement but says legal claim was “scare tactic”

Bournemouth Borough Council has confirmed that it will reopen the procurement of a hotel development adjacent to the Bournemouth International Centre (BIC), although it maintains that there is no basis for a claim made on behalf of two business with hotels in the area.

The local authority insisted that leave for judicial review would not be granted by the courts, describing the analysis of the claimants as “simplistic, with vague and unsubstantiated arguments throughout”. 

In April law firm Dentons sent a pre-action protocol letter to the council on behalf of Bespoke Hotels and Peel Hotels.

This threatened a public law and public procurement challenge over the council’s decisions earlier this year to approve the funding of the construction of a hotel on the site next to the BIC.

The letter claimed that the project would be "an irresponsible use of precious council resources, with a real risk of harm to frontline services, given the extent of the borrowing necessary to fund a project that the private sector has walked away from”.

Announcing the council’s response, Cabinet Member for Local Government Reorganisation and Economic Growth, Cllr Philip Broadhead said: “We stand wholeheartedly by the proposed model for the hotel development – the funding approach, site location and demand forecasts. On that basis, we fully expect to proceed with the development.

“However, the argument made that the ‘rollback’ part of the procurement stopped other interested parties from bidding on the project has led to Cabinet agreeing to reopen the procurement process, so enabling other bidders to come forward.”

Cllr Broadhead added: “Furthermore, as we enter a hugely intensive period of activity on local government reorganisation, we need council resources focused on that, rather than dealing with distractions such as this. Therefore, Cabinet [has] agreed to reopen the procurement, allowing us to re-advertise the opportunity and so test the market. It is hoped that a new procurement process can commence quickly, enabling this important element of the town's regeneration to proceed.

“I must stress, the recommendation to Cabinet is in no way a reflection on the quality of the bid being advanced and in fact just this past week, significant progress has been made on reaching a position that would have satisfied the council’s previously agreed requirements.”

The final decision to appoint a preferred bidder and enter into the relevant contracts will be taken by full council once the new procurement process has concluded.

Bournemouth said that “regardless of the Cabinet decision”, in responding to the pre-action protocol letter, the council argued that “a careful process of procurement and decision-making has been followed, and that we are satisfied that the decisions made so far would be found by a Court to be lawful”.

It added: “In fact, we consider the threat of judicial review nothing more than a scare tactic constructed as an attack on the decision-making process, via a large number of spurious grounds, aimed solely at disrupting the project. Analysis within the claim is simplistic, with vague and unsubstantiated arguments throughout.

“We remain confident that the funding model is robust and represents the right approach. Industry-backed projections demonstrate the investment will achieve financial return over its course, as well as raising the profile of Bournemouth as an international conference destination and thereby achieving additional benefits to the town's economy. “

The council said it was satisfied that the financial model behind the development of the hotel was robust and that taxpayers' money was not unreasonably being placed at risk.

“On other points, the legal frameworks by which the development is governed are clear and the council is fully compliant,” it maintained.

“We are confident we have the powers within various legislative provisions, to proceed with the development in this form, including the Local Government Act 2003 and the Localism Act 2011, as well as being fully compliant with relevant sections of the Local Government Act 1092 and The Town & Country Planning Act 1990.”