FOI - Planning application - Patmos/ Lothian Estate [Oct 2022]

Your request 

A formal application from Pacca TMO Ltd was received on 13 March 2019 by the GLA.

The application proposes that 234 tenanted council homes and 50 leaseholder homes located on the Patmos/ Lothian Estate are acquired by a new landlord (Vision Homes Lambeth Ltd), replacing the existing landlord (London Borough of Lambeth). 

I wish to be provided with copies of all written submissions to the GLA, including but not limited to, the following: 

1. A copy of the business case (in writing) which was submitted as part of this submission by Pacca or Vision Homes upon which this decision was made. I understand that the proposal is being made by a 'for profit' organisation. I would like to understand how the applicant intends to generate revenue from this venture, and also what level of expenses they intend to incur to create a profit; how will any profits be disbursed to investors, finance providers or shareholders and whether the creation of profit will detrimentally impact council tenants and leaseholders.
2. Provide any details (in writing) about the loans that Pacca or Vision Homes Lambeth Ltd intends to enter into to finance the purchase of the housing stock, as well as to invest in upkeep of the housing stock submitted as part of the business case.
3. Details and backgrounds of all parties who have made the application; registered company numbers, directors' names, shareholders and all parties with a direct or indirect interest in the proposal (financial or otherwise), proposed investors of the proposals.
4. Provide all details and documentation which provides details of what grounds the GLA decided that this was an acceptable proposal when it was declined the first time around.

Our response

We are able to provide publicly available information regarding Pacca TMO Ltd and Vision Homes (Lambeth) Ltd. 

Pacca TMO Ltd 
Company number: 04976826 
Registered office address: 81 Lothian Road, London, SW9 6TS 
Active Directors: Adeline Aina 

Vision Homes (Lambeth) Limited 
Company number: 10733822 
Registered office address: Anthony Collins Solicitors LLP, 134 Edmund Street, Birmingham, England, B3 2ES
Active Directors: Peter Fortescue Hubbard

We do not hold personal information for the individual tenants and leaseholders who make up Pacca TMO Ltd. These details have been verified by Anthony Collins Solicitors LLP. 

We are also unable to provide information about the companies who are providing funding to the project as this is contained within the business case and is considered commercially confidential. 

We consider that the information we hold in relation to parts 1, 2 and 4 of your request is exempt from disclosure under Section 41 and Section 43 (2) of the Freedom of Information Act 2000: 

• Copy of the business case
• Part 2 of MD2887 - Assessment of an application to transfer homes on the Patmos
• Annex 12 GLA assessment of the business case

Section 41(1) of the Act provides: 

Information is exempt information if (a) it was obtained by the public authority from 
any other person (including another public authority), and (b) the disclosure of the 
information to the public (otherwise than under this Act) by the public authority holding 
it would constitute a breach of confidence actionable by that or any other person 

For the exemption to apply, it must be demonstrated that disclosure would constitute an actionable breach of confidence. The Information Commissioners Office (ICO) have long advised public authorities to be mindful of the test of confidence set out by Judge Megarry at the High Court of Justice in Coco v A N Clark (Engineers) Limited [1968] FSR 415 as a framework for assessing whether a disclosure would constitute a breach of confidence:

'…that three elements were usually required to bring an action for a breach of 
confidence: the information must have the necessary quality of confidence, it must 
have been imparted in circumstances importing an obligation of confidence, and there must have been an unauthorised use of the information to the detriment of the confider.'

Therefore, we consider that the following applies:

1. Section 41 is designed to give those who provide confidential information to public authorities a degree of assurance their confidences will continue to be respected. The information contained in Part 2 and Annex was obtained from another ‘person’ and is of a confidential nature, it has been imparted in circumstances importing an obligation of confidence, and its disclosure is not authorised.
2. Pacca TMO (Pacca) have confirmed that the information has the necessary quality of confidence, given publication would infringe the duties imposed on London Borough of Lambeth (LBL) and the GLA by the Housing Transfer Manual, Schedule 3A of the Housing Act 1985 and the statutory guidance on tenant consultation. The information was imparted in circumstances of confidence. This is obvious from the context: as well as the commercial considerations set out below, the information does indeed relate to financial or business affairs, or is legally sensitive. Part 1 of MD2887 refers to what should and what should not be made publicly available. The GLA marked Part 2 of MD2887 as “sensitive information” and so any communications regarding that decision clearly import the same obligation of confidence.
3. It would be prejudicial for Pacca in future negotiations through disclosure of the commercially sensitive and confidential information contained in Part 2 and Annex 12. By way of example, in relation to the proposed shareholder agreement which was explained in Pacca’s outline business case and in further clarifications; There is clearly scope for the Regulator of Social Housing (RSH) to influence the terms of the shareholder agreement when assessing the registration application against the Governance and Financial Viability Standard, but its ability to do so would be significantly undermined if information about the proposed shareholder agreement is published before there has even been a consultation with tenants. Further, the disclosure of such information would effectively relinquish the parties’ right to agree to keep the terms of the shareholder agreement confidential.

This is an absolute exemption and not subject to a public interest test, however we are required to carry out a test to determine whether it would have a public interest defence for the breach of confidence. We consider that there are strong reasons why it is in the public interest to uphold Pacca's right to confidentiality (which are further evidenced in our s.43(2) public interest arguments weighing in favour of non-disclosure). 

Section 43 (2) (Commercial interests) provides that information can be withheld from release if its disclosure would, or would be likely to, prejudice the commercial interests of any person, including those of the GLA. A commercial interest relates to a person’s ability to participate competitively in a commercial activity. 

In this instance, the assessment relates to Pacca’s application for a transfer of housing stock in which there are significant commercial interests. However, Pacca’s ability to proceed with that application is contingent upon a successful tenant ballot, registration with the RSH and permission of the Secretary of State. Consequently, the full detail of Pacca’s proposal will be subject to further discussion and negotiation between Pacca, LBL, the GLA and RSH, and there is a serious risk that those discussions would be prejudiced by disclosure of the commercially sensitive and confidential information. 

Section 43(2) constitutes a qualified exemption from our duty to disclose information under the Act and consideration must be given as to whether the public interest favouring disclosure of the information covered by this exemption outweighs the public interest considerations favouring maintaining the exemption.

The GLA acknowledges that there is a public interest in the application process whereby homes are transferred under the Housing (Right To Transfer from a Local Authority Landlord) (England) Regulations 2013 (“the 2013 Regulations”). 

However, it is important that public authorities can have a safe space to engage with third parties to improve policy and decision making without prejudicing their commercial interests. It should also be acknowledged that there is already an appropriate level of transparency in this area which will be met through the next stage of the transfer process, namely formal consultation with tenants. This achieves the necessary degree of transparency without needing to prejudice Pacca's commercial interests. That is clearly the reason why the statutory guidance requires comprehensive information to be provided 'on a single occasion…without unnecessary
repetition.” LBL would be unable to follow that statutory guidance if the GLA publishes Part 2 and Annex 12 in advance of the tenant consultation.

The Leaseholder Advisory Service is a government funded service which provides independent advice for residential leaseholders. You can contact them online or via telephone on 020 7832 2500. 

The Housing Transfer Manual includes requirements that the transfer contract should include a requirement to cap leaseholder service charges for capital works at no more than £10,000 (or £15,000 in London) in the five year period following transfer.

If you have any further questions relating to this matter, please contact us, quoting
reference MGLA200922-9460.