Select Committee Report is out!

Transport Select Committee Smaller Airports Inquiry

The House of Commons Transport Select Committee report investigating issues surrounding Smaller Airports has now been published. We’ve made a summary of our favourite parts below. The full report can be access on the Committee’s website here, the case study on Manston Airport runs from pages 16 to 21.

The Supporters of Manston Airport team are very happy at the contents of the report, and it is understood that RiverOak are equally pleased.

The Committee have uncovered further layers in the mystery surrounding the airport’s ownership and control. It also seems the committee have seen through Ann Gloag and Pauline Bradley’s attempts to appear as though they wanted to run the airport on a long-term basis. As we have continued to believe, Ann Gloag still holds considerable authority and decision making power over the site.

It is now plain for all to see that RiverOak did offer the £7 million asking price to Ann Gloag and Pauline Bradley before the airport closed. The report also makes clear Kent County Council’s failings with particular reference to Leader Paul Carter’s support of Musgrave and Cartner.

We now await the report commissioned by the Department for Transport.

Ann Gloag

“If Ann Gloag’s motivation was to run Manston as an airport, accepting RiverOak’s £7 million offer would have allowed her to correct her initial error in purchasing the airport and left her with a generous profit.”

Roger Gale said “I believe now that I was completely misled, that I was lied to and that Mrs Gloag had no intention whatsoever of running this as an airport, and every intention of seeking to turn it into an asset-stripping property development.”

RiverOak

“In late April 2014, RiverOak began a dialogue with Mrs Gloag regarding a possible purchase of the airport. Mrs Gloag provided full financial disclosure based on which RiverOak offered to pay the asking price of £7 million. The offer was rejected.”

“Manston Skyport contested RiverOak’s claim that it had offered £7 million to purchase Manston airport. RiverOak later provided documentary evidence to back up this claim.”

Manston Airport Ownership

“The articles of Lothian Shelf 718 state that a decision at a directors meeting requires a unanimous vote involving at least one A director and one B director.61 There are two A directors, Mr Cartner and Mr Musgrave, and one B director, Pauline Bradley, who was appointed by Ann Gloag. Regardless of her minority shareholding, Ann Gloag, as holder of the 20 B shares and having appointed the B director, holds equal decision making power to and a de facto veto over Mr Cartner and Mr Musgrave.”

“Ann Gloag holds a legal charge over the Manston airport site. This charge relates to a loan to Lothian Shelf 718.”

“Because the joint venture agreement between Mr Cartner, Mr Musgrave and Ann Gloag to redevelop Manston is not in the public domain, it is unknown how any profits derived from the redevelopment of Manston might be shared. The allocation of profits might not be in line with the 80:20 share allocation.”

“We recommend that Ann Gloag places the joint venture agreement between herself, Chris Musgrave and Trevor Cartner to redevelop Manston in the public domain to make it clear who would benefit from the proposed redevelopment of Manston and to repudiate allegations of asset-stripping. We would be happy to publish this document on our website.”

Thanet District Council

“We question whether a small district council has sufficient funds or legal and financial expertise to handle a case of this magnitude. TDC told us that it spent £26,000 on legal advice in relation to the proposed CPO. That sum was unlikely to provide TDC with adequate advice in relation to indemnification by a US company or to allow it to understand RiverOak’s business plan and operating model.

We expect higher-tier local government bodies to fulfil their strategic oversight functions by supporting local planning authorities in resolving one-off, complex cases involving nationally significant transport assets.”

Kent County Council

“Kent County Council has the legal and financial resources to assess complex CPO cases. Despite having agreed a motion to support Thanet District Council, it failed to deploy those assets. In failing to support Thanet District Council’s scrutiny of the proposed CPO at Manston, Kent County Council also failed to fulfil its strategic oversight function as the local transport authority.”

On 17 July 2014, KCC considered the case of Manston airport and unanimously agreed that KCC supported TDC in actions so far to retain the airport, and that KCC would explore options with TDC to support the retention of the airport.

Leader of KCC Paul Carter attended and voted at that meeting. In September 2014, Paul Carter commented on the sale of Manston, praising Chris Musgrave and Trevor Cartner and stating he had “every confidence” in what they could do in the re-development of the airport. The select committee concludes that “Paul Carter’s remarks in September 2014 were inconsistent with the motion agreed by KCC on 17 July 2014.

“We asked Paul Carter to explain his position. He told us that ‘the motion that was supported unanimously by the county council said we would be prepared to support Thanet district council in a CPO process at Manston, provided a viable and thriving airport could be delivered at Manston.’ He subsequently admitted that there was no such caveat to the KCC motion. He also reiterated his enthusiasm for the redevelopment of the Manston site rather than its operating as an airport. We asked him whether Trevor Cartner or Chris Musgrave had shown him detailed plans for the redevelopment. He replied, ‘They showed me nothing.’”

Department for Transport

“The DfT interceded in the Manston case following TDC’s decision not to proceed with a compulsory purchase order. In December 2014, the Minister of State, DfT, John Hayes MP, chaired a meeting with interested parties and agreed to co-ordinate work across Government to explore all options to secure the airport’s future. That the DfT judged it necessary to intervene in the Manston case shows the extent to which Kent County Council failed to fulfil its strategic oversight role.”

“We welcome the DfT’s decision to appoint a consultant to examine the Manston case. The uncertainty faced by the public and other interested parties could have been reduced if it had not taken three months before the DfT acted.”

“The DfT should set out clear terms of reference for the consultant who is contracted to examine the Manston decision-making process and place them in the public domain. Those terms of reference should include (a) an explicit requirement to assess whether RiverOak is an appropriate indemnity partner for Thanet District Council; (b) a deadline for the consultant to report back to the DfT; and (c) an expeditious timescale for subsequent DfT decision making. To ensure that similar cases are handled promptly and effectively in future, the Government should clarify precisely how (a) central Government and (b) higher-tier local authorities are responsible for supporting lower-tier planning authorities in cases where a strategic transport asset is subject to a proposed compulsory purchase order.”

“The DfT should review what powers it has to intervene in cases where strategic transport assets are at risk and whether those powers are fit for purpose.”