AN off-market property deal approved by Glasgow City Council for the benefit of a Labour donor is to be probed by a special scrutiny committee.
The potential sale of local authority land to AS Scaffolding will be put under the microscope this week after questions were raised by opposition councillors.
The role in the process of Labour councillor Paul Carey, who flagged up his party donor’s interest in expanding his business, will also likely be discussed at the committee.
AS Scaffolding, co-owned by Andy Smillie, is a well-known business in the Dennistoun area of the city that posted shareholder funds of £4.6 million in 2013/14.
The firm is active in the private sector but has also secured work from the council’s spin-off construction firm City Building.
In 2012, City Building announced that AS Scaffolding was one of a number of firms on its specialist trade subcontractor framework.
According to official electoral returns, Smillie and his firm have also donated around £10,000 to Labour and party candidates.
Another £10,000 was given by the company to the Glasgow Lord Provost’s Charitable Trust.
At a recent meeting of the council Executive – held after new leader Frank McAveety succeeded Gordon Matheson – politicians approved the principle of selling 2,306 square metres of property to AS Scaffolding covering Glenpark Street, Millerston Street and Duke Street.
Picture: Frank McAveety has returned as Glasgow City Council leader
The land is deemed surplus to “operational requirements” and City Property – another arms length company set up by the local authority – was instructed by the Executive to negotiate the terms of an off-market deal.
However, the SNP group queried the move and managed to get the deal referred to the Operational Delivery Scrutiny (ODS) committee.
Council officers and other interested parties can be called in front of the ODS to explain decisions in greater depth.
One of the councillors on the ODS is Carey, who at the end of last year spoke to the managing director of City Property about AS Scaffolding’s expansion plans.
It is understood he will not attend this week’s ODS meeting.
Smillie is not a constituent of Carey’s and the business is not located in the councillor’s Drumchapel ward, but a council spokesperson said Carey’s intervention was when he chaired City Building: “AS Scaffolding discussed their desire to expand with Councillor Carey who was at that time the chair of City Building. His advice was that they should discuss it with the managing director of City Property and he asked her to contact AS Scaffolding, which she did.”
In 2011, Carey was one of 16 Labour councillors to be informed that they would not be candidates at the following year’s election. However, he had an appeal upheld and was re-elected.
Carey also attracted negative publicity after he tried to block the release of information about hospitality enjoyed by City Building executives.
Susan Aitken, the SNP group leader on the council, said: "When news emerged of donations to various Labour recipients – confirmed by the Electoral Commission – it was deemed vital that this potential deal received a greater level of scrutiny. If the administration had been open about their connections with the company and the owner then perhaps previous concerns around links between City Building and AS Scaffolding would not have re-emerged.
“Whatever the outcome of the call-in, which provides an opportunity to explore the issues around the proposed negotiations and future use of the site, this was a necessary step to ensure all of the facts around the deal could be considered.”
David Meikle, the sole Tory on the council, said: “I support the call-in because I believe all aspects of the disposal of this land should be reviewed by the committee. The public are rightly asking if proper process was followed, why is the sale of the land off market and not in the open market to deliver best value, and who was involved.”
Carey said: "Mr Smillie knew me from my time as chair of City Building Glasgow. He wanted to expand his business and asked me for advice. My advice was that he should speak to City Property and I asked City Property to speak to Mr Smillie. In the last two years, I have made similar approaches to City Property on behalf of Police Scotland, Aldi and Tough Construction."
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