Hamilton College of Education (Hansard, 1 December 1983)

§ Lord Taylor of Gryfe
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Minister of State, Scottish Office (Lord Gray of Contin)
My Lords, the former Hamilton College of Education premises were sold for the best price that could be obtained in the open market. The circumstances of the sale are at present being examined in another place by the Committee of Public Accounts, whose report will be carefully considered when it is available.

§ Lord Taylor of Gryfe
My Lords, while thanking the Minister for that reply, may I ask whether he is aware that the Auditor and Comptroller General quotes the Scottish Office valuation of these premises as £6 million, not £600,000, the price at which the college was disposed of? Is he aware that in a similar instance a few years ago, the disposal of Robroyston Hospital, the premises were sold for £400,000 and within two years the property speculator realised over £2 million? The Scottish Office laid down certain rules under the Halliday Report affecting the disposal of these assets. Why were these procedures not followed in the case of Hamilton College?

§ Lord Gray of Contin
My Lords, perhaps I should first point out to the noble Lord that the chief valuer's provisional estimate was based on the possible outcome in a situation most favourable to the sellers. That situation did not prevail. I have no evidence to suggest that a better price would have been obtained had different procedures been followed. In view of the fact that the Public Accounts Committee is examining the whole question at present, it might be more beneficial if we were to wait until we have their report before we make a judgment.

§ Lord Glenkinglas
My Lords, may I give my noble friend my congratulations on his good fortune in not being there at the time? When the appropriate committee has made its recommendations, will he ask 799 his right honourable friend to make certain that the people responsible are not rewarded by promotion?

§ Lord Gray of Contin
My Lords, I am grateful to my noble friend for his comments. It might be best if we waited until we see what the report contains before making a judgment.

§ Lord Ross of Marnock
My Lords, is it not true that, after the last case of a similar scandal with the Robroyston Hospital, the present Secretary of State in 1980 asked the advice of the Halliday Committee? The committee recommended that the chief valuer should be consulted and, following that, private estate agents, experienced and qualified, should be used to negotiate the sale. Did that take place? If not, why not? Lastly, and with a view to getting at culprits, did the Secretary of State approve the sale?

§ Lord Gray of Contin
My Lords, the noble Lord has asked me who was responsible for taking the decision not to use private estate agents. The decision was taken by the governing body of Jordanhill College, to which responsibility was given after the rationalisation took place and the decision to close Hamilton Collegewas realised. It was for that body to decide who would be most fitted to carry out negotiations on its behalf. It had every confidence in its solicitors and decided that that firm should act on its behalf. The firm in question had experience of substantial property deals and was thought to be perfectly competent to act. As to the final decision, the noble Lord knows only too well that the Secretary of State is always made aware of the situation when such a sale takes place. The Secretary of State would not necessarily approve it but he decided not to hold up the sale.

§ Lord Taylor of Gryfe
My Lords, I welcome the assurance of the Minister that this matter will be deferred until the Public Accounts Committee has discussed it in full. May I simply ask how he can be sure that the market price was realised for this property when reputable estate agents were not employed in the sale and the property was not advertised in estate journals or property magazines of any kind?

§ Lord Gray of Contin
My Lords, the situation is that the property was advertised. It was advertised in the press. There were no fewer than 40 brochures circulated to various interested people. There was wide interest in the sale and. after sifting, there were about 15 serious bidders. In the long-term, there were four final bids which came in for serious consideration. So there is no question but that there was full advertising and that full opportunity was given to those who might be interested.

Lord Morris
My Lords, who decided who was interested?

§ Lord Gray of Contin
My Lords, the solicitors who were acting on behalf of the governing body of Jordanhill College advised the college on each step in the negotiations.

§ Lord Hale
My Lords, can the noble Lord say how the chief valuer makes a very provisional valuation and why he used this summary method for a substantial operation and, further, whether anyone else was told that it was very provisional before his advice began to become operative?

§ Lord Gray of Contin
My Lords, as I have earlier explained, the situation was that the chief valuer made his provisional estimate on the basis of the possible outcome of a situation most favourable to the seller. As it transpired, at the time that the sale took place the situation was not necessarily most favourable to the seller. Therefore the original estimate—and it was a very rough estimate—by the chief valuer could not be held to be accurate in those circumstances.

§ Lord Mackie of Benshie
My Lords, with regard to the Minister's reply to the noble Lord, Lord Ross of Marnock, why was it that the governors of Jordanhill were exempt from the Secretary of State's ruling that properties of this substantial character had to be sold through estate agents?

§ Lord Gray of Contin
My Lords, I must advise the noble Lord that that was not a ruling, and the remit had been passed to the governing body of Jordanhill College. It was for them to decide. They considered the possibility of employing outside agents but, in view of the fact that they had every confidence in their firm of solicitors, Messrs, Wright, Johnston and MacKenzie, who in the past had carried out substantial conveyances of that kind, they believed that they could get as good advice from their solicitors as they could from estate agents. The noble Lord will appreciate that the practice of selling property through the medium of solicitors rather than estate agents is one which has been commonplace in Scotland for very many years.

§ Lord Ross of Marnock
My Lords, the noble Lord has not given me a proper answer. Will he tell us what was the advice of the chief valuer of Scotland, even in respect of estate agents? Secondly, is he also telling the House that the Scottish Education Department was not concerned about this matter?

§ Lord Gray of Contin
My Lords, the chief valuer gave his initial estimate of the price. The noble Lord must be reasonable with me on this point. He gave his initial figure. When he was asked a second time to comment, in view of the fact that it was not a sellers'market which he had anticipated in the first instance, he declined to revise his figures.

§ Lord Ross of Marnock
My Lords, what about the Education Department?

§ Lord Kirkhill
My Lords, in the light of the recent Robroyston difficulty, would not the Minister agree that Scottish Office management stands condemned yet again?

§ Lord Gray of Contin
No, my Lords, I certainly would not accept that Scottish Office management stands condemned. I would rather save my judgment until we have the report of the Public Accounts Committee and perhaps see what is its finding, after 801 which the Scottish Office will have its opportunity to respond.

§ Lord Taylor of Gryfe
My Lords, I am sorry to press this matter, but will the Minister confirm that, while the property was advertised in the Glasgow Herald, the Scotsman, and the Times Literary Supplement, it was not advertised in any reputable property journal or estates journal, and consequently had a limited appeal in that market?

§ Lord Gray of Contin
My Lords, the noble Lord is correct. It was not advertised in the journals to which he referred. Nevertheless, there was still a large number of interested persons, and more than 40 brochures were applied for and distributed.