This information has been created in order to respond to requests for information received by NHSGGC on the subject of the sale of land at the site of the former Lennox Castle Hospital.
The former Lennox Castle Hospital (LCH) site was within an area covered by the East Dunbartonshire Local Plan which became operative in 18 February 2005. The land was designated as Greenbelt within that Local Plan. The site was divided into two areas – the “lower site” and the “upper site”. The lower site was designated as being suitable for housing with a capacity of 350 units. This area received outline planning permission for residential use with the first section of that site developed by Mactaggart & Mickel.
The remainder of the hospital site was designated for appropriate countryside uses, with East Dunbartonshire Council (EDC) against development in this area other than for the outlined “appropriate countryside” uses. This is defined as agriculture, agricultural development, rehabilitation of existing buildings, tourism and outdoor recreation. This severely restricted any potential interest in the sale of this land and the Board’s advisors were of the opinion that development for countryside compatible use would be uneconomic.
The Board were approached by Celtic plc in November 2004 with a view to purchasing the upper site for use as a “Sports Academy” – ie a sports and training facility. This was regarded as Greenbelt compatible use and was seen as a positive step forward for the objective of achieving a fully developed former hospital site.
A draft offer from Celtic plc to purchase the land on the upper site to develop this training facility was received and negotiations commenced resulting in an offer to purchase from Celtic plc in the sum of £493,000, which was in excess of the independent valuation of £480,000.
All legal transactions were handled on behalf of the Primary Care Division (PCD) of NHS Greater Glasgow by an independent firm of solicitors, who were the firm appointed for the entire former Lennox Castle Hospital disposal and not just for the Celtic plc element of the transaction. The solicitors provided their report on 16 August 2005.
The finalised property transaction was then scrutinised and signed off by the PCD’s corporate governance approval process – PCD’s Divisional Capital Planning Group on 17 August 2005.
After all negotiations had been concluded the transaction was then required to be presented under the Scheme of Delegation to the Chief Executive Officer (CEO) of Greater Glasgow Health Board (the legal entity at the time of the disposal) for signing as the Board’s Senior Officer empowered to sign such property transactions on behalf of Scottish Ministers. The final Disposition was signed by the CEO on 29 June 2006.
Only the “lower site” was designated as being suitable for housing with a capacity of 350 units. This area received outline planning permission for residential use with the first section of that site developed by Mactaggart & Mickel. The remainder of the hospital site (including the area disponed to Celtic plc) was designated for appropriate countryside uses. This is defined as agriculture, agricultural development, rehabilitation of existing buildings, tourism and outdoor recreation. East Dunbartonshire Council were against development in this area other than for the outlined specified circumstances of appropriate countryside use. The Board’s advisers were of the opinion that Lennoxtown was not an appropriate location for other forms of countryside use or that development for these purposes would be uneconomic, and that the proposal by Celtic plc was a positive step forward for the objective of achieving a fully developed former hospital site.
Independent valuations of the upper site of the former Lennox Castle Hospital were carried out on 2 March 2005 and 16 August 2005. Copies of the valuations are included in the List of Documents below. There were no formal valuations of the site carried out by Greater Glasgow Health Board prior to the expression of interest by Celtic plc.
The land was sold off-market in accordance with Part B, Clause 1.15 of the NHS Scotland Property Transactions Handbook, achieving the best possible receipt. The development of the former LCH site required that outline planning consent for the lower site was granted in accordance with East Dunbartonshire Council’s Local Plan, requiring the upper site to be developed for Greenbelt Compatible use. This severely restricted any potential interest in the sale of the land and it was within this context that a draft offer from Celtic plc to purchase land on the upper site to develop a training ground was received. Negotiations commenced in November 2004 by the Primary Care Division, resulting in an offer to purchase from Celtic plc in excess of the independent valuation. GGHB were not aware of and had no contact with any lobbyists in connection with this proposal.
The Board received an offer from Celtic plc that was in excess of the Independent Valuation and thus a fair market price for the land at that time. The land was within an area designated as Greenbelt within the local plan and designated for appropriate countryside uses. Due to these restrictions the Board’s advisers considered that the price paid was the current market value at that time.
At the time of disposal of the land in question (the upper site) to Celtic plc, the negotiations were executively handled by the officers of the former Primary Care Division (PCD) of Greater Glasgow Health Board together with their appointed Property and Legal Advisors. The officers of the PCD were wholly responsible for the negotiations with Celtic plc and their appointed advisors. The decision to sell the land to Celtic plc was made on 17 August 2005 at a meeting of the Property Management Committee of the Primary Care Division.
A Property Transaction Certificate was completed which required sign-off from the Property Advisor, the Independent Advisor, the Legal Advisor and the Board’s in-house Property Manager. The finalised property transaction was then scrutinised and signed off by the PCD’s corporate governance approval process. The Property Transaction Certificate is included in the List of Documents.
Finally the concluded transaction was presented for signing under the Scheme of Delegation to the Chief Executive of Greater Glasgow Health Board (the legal entity at the time of the disposal) as the Senior Officer empowered to sign such property transactions on behalf of Scottish Ministers.
In accordance with the above protocol no declaration of interest was made or recorded at the time of the sale by the Chief Executive of Greater Glasgow Health Board. We have no recorded information which would indicate that the Chief Executive (or any family members) had a relationship or other interest with the purchaser.
The Scottish Ministers secured the current market value of the land at that time by receiving the purchase price in full from Celtic plc. The bank which facilitated the purchase of the site for Celtic plc has a First Ranking Security in line with standard commercial practice.
The future development opportunity of the site is protected by a significant Clawback Agreement over a 25 year period backed by a Second Ranking Security in favour of The Scottish Ministers (as detailed in the Minute of Agreement between the Scottish Ministers and Celtic plc). The land was sold to Celtic plc to be used as a “Sports Academy” – ie a sports and training facility. If Celtic plc chose to submit a planning application for use outwith the permitted use as a Sports Academy, then the Clawback Agreement would come into force.
Payment for the sale of the land was received by Greater Glasgow Health Board in a single payment of £493,000 on 29 June 2006.
A formal option appraisal was not carried out on the site at Lennox Castle Hospital due to the restrictions on the land use (ie 'appropriate countryside uses'). The property transaction was given an 'A' rating by the Auditors (PricewaterhouseCoopers), indicating that it was fully compliant with NHS Scotland Property Transaction procedures. Information was provided to the Auditors by the Board's Property Adviser and Independent Adviser. The Property Transaction Monitoring proforma is included in the List of Documents below.
The Minute of Agreement for the sale of the land notes that Celtic plc should inform the Scottish Ministers of any notifiable event. The NHS Board has not been informed of any such notifiable event.
There is no recorded information held by NHS Greater Glasgow and Clyde regarding whether the sale of land to Celtic plc should have been classed as a public works contract.
Land on the lower site at LCH was sold to Mactaggart & Mickel as part of the Tripartite Agreement with East Dunbartonshire Council and Mactaggart & Mickel. This was the first phase of development for residential use on the lower site. Subsequent phases are yet to be developed and marketed. As this is an ongoing process which is yet to be concluded the financial terms and conditions remain confidential.
A schedule showing other land and property sales from 2006 to 2013 is included in the List of Documents.
List of Documents