COUNCIL chiefs say York’s controversial Derwenthorpe model village can finally go ahead following a crucial ruling by the European Commission.

The 540-home development at Osbaldwick has been stalled while the Commission investigated a City of York Council decision to sell the site to the Joseph Rowntree Housing Trust without going out to open tender.

The Commission said yesterday the deal had not complied with EU public procurement rules, meaning certain companies might have been denied the possibility to bid for the contract – but it decided not to refer the case to the European Courts.

In return, the trust will go out to tender to allow companies across the EU to bid to construct homes in four phases.

The trust had originally intended to self-build the properties, said Bill Woolley, the council’s director of city strategy.

He said: “The council now expects the development of Derwenthorpe to proceed following a procurement process by the Joseph Rowntree Housing Trust, which will fully comply with European public procurement rules.”

He said the council had in effect exchanged contracts with the trust in 2003 on a deal to sell the land for a guaranteed £6 million plus a profit share and this deal, which had not yet been completed, was binding.

He said the £6 million, which would go towards capital projects, was a good sum to receive following falls in land values.

But Malcolm Kettlestring, former chairman of Osbaldwick Parish Council and a leading campaigner against Derwenthorpe, said the council's interpretation of the commission's decision could be subject to challenge, and the ruling would need to be studied in detail.

Julia Unwin, chief executive of Joseph Rowntree Foundation, said the Trust remained committed to providing much-needed family homes in York.

She said: “Now the European Commission have now made a decision on this matter we will consult our legal advisers about the next steps.”

A commission spokeswoman said the contract awarded by the council had been a public works concession contract – where the contractor is paid in part by being given the right to exploit the development after it has been built.

He said: “Under EU public procurement rules, this type of contract should have been awarded following an EU-wide tender process.”

She said the UK had measures in place aimed to ensure such issues did not arise in future, giving a guarantee that in future, contracting authorities across the UK would comply with EU law.


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