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EU red tape threatens regeneration

Councils are getting tied up in EU bureaucracy, putting vital regeneration projects at risk says the British Property Federation (BPF).
The chief executive of BPF Liz Peace will accuse local authorities of adopting an 'over-cautious' interpretation of EU procurement rules, at a regeneration meeting in the capital, scheduled for today.

EU procurement rules require local authorities to tender for development partners for public sector contracts (valued above a certain threshold) within the Official Journal of the European Union (OJEU). However, many councils have followed their own selection processes and signed development agreements without tendering through the OJEU and a fear of legal action from Brussels has led some to re-tender for a partner, causing costly delays.

The BPF is concerned that where OJEU procedures are not clearly understood, large-scale urban regeneration projects in the UK could be delayed or halted. Liz Peace is calling for more clarity on OJEC and has in her armoury a sorry list of projects which have become casualties.

Liz Peace said: 'Many councils are now too afraid to proceed with development agreements and are re-tendering projects. In the case of new development opportunities, some councils are choosing to go through the lengthy and bureaucratic process just to be on the safe side'.

She said: 'With the regeneration sector already on its knees due to the current financial turmoil, the BPF wants clarity on how the OJEU process should work to avoid unnecessary and expensive procurement'.

Liz Peace says such guidance should underline there is no need for a tendering process when:

- the local authority effectively has only one credible prospective partner.

-the bidding costs would be so disproportionate as to deter any credible partners from coming forward.

The chief executive added: 'We need clarity from the UK government or even the EU as to what kind of project should go down the OJEU route. Local authorities need to be given the confidence that they won't be caught out if they sign an agreement with a developer.'
20 January 2009

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