Labour controlled Glasgow Council is facing the possibility of a police investigation after questions were raised over property deals involving land used for the Commonwealth Games.
Police are to look into a number of multi-million pound deals after SNP MSP James Dornan asked them to investigate what he described as “an outrageous abuse of tax payer’s money”.
The complaint centres on a deal involving millionaire property developer Charles Price that saw the local authority pay the property tycoon £17 million for land purchased by Mr Price for £8 million.
Price has claimed that he didn’t know the site he bought between 2002 and 2005 would later be developed for the Commonwealth Games Village. In 2008 a consortium, Progress Property Developments (PPD), led by Mr Price was shortlisted to build the Games’ village.
Mr Dornan contacted Strathclyde Police Chief Stephen House and Scotland’s Auditor General, Robert Black back in October asking them to investigate the land deal between Glasgow City Council and Mr Price.
Mr Dornan, then a Glasgow Councillor, had obtained information through a freedom of information request that indicated the local authority had inflated the value of the land by nearly £1 million.
In August of 2008, the council’s then director of Development and Regeneration Services, Steve Inch, told councillors that, according to survey firm Colliers CRE, £17 million was “an accurate reflection of the value of the sites”.
As a result, the council’s Executive Committee – chaired at the time by disgraced former council leader Stephen Purcell – agreed to pay Mr Price the full £17 million, plus an additional £3 million VAT.
However following the release of the valuation report, commissioned by the Council at a cost of £30,000, it was discovered that Colliers had valued the land, in the East End’s Dalmarnock area, not at £17 million but at just over £16 million.
Speaking at the time Mr Dornan said: “This is an outrageous abuse of tax payer’s money. Myself and other councillors on the committee were clearly informed by Council officers that the land was worth £17 million, and we now find out that this figure was inflated by nearly £1 million.
“And of course we could have got this land for a much cheaper price under the Compulsory Purchase legislation that was available to Glasgow City Council during these negotiations.”
The revelations angered campaigners who had been protesting against the so called ‘Dalmarnock Evictions’ where residents were evicted from their homes by Glasgow City Council through the use of similar compulsory purchase orders.
The most bitterly contested eviction was that of Margaret Jaconelli who was eventually forced out of her home which stood on land earmarked for Games’ development.
A spokesman for Glasgow City Council said that compulsory purchase powers were not used against Price’s company because officials had been able to agree a deal with him.
Two other land deals are to be scrutinised by officers. One saw council-owned land given away free to another property developer who donated cash to the Labour party. The land was bought back three years later with £1.3m of public cash.
Another Council transaction under the spotlight involves former Rangers owner David Murray whose company were paid £5.1m for land it bought for just £375,000 a few years earlier.
Mr Dornan said he was very encouraged by the police response and added:
“Clearly, the council tax payers of Glasgow have to be confident that public money is being spent wisely.
“Any suggestion to the contrary – that public money is not being spent wisely – has to be fully investigated.”