The local government watchdog will interview council officers this week about allegations of wrongdoing concerning the sale of a community pub.

On Thursday, an officer from the Local Government Ombudsman (LGO) will interview planning officers about an agreement to sell a council-owned pub, the 80-year-old Morden Tavern in Central Road, Morden, to developer Reef Estates.

They will also meet Blanchard Road campaigner David Smith, who launched the Campaign for Morden Tavern (CMT) last year and claims the council had failed in its duties to protect the public purse.

Since Reef Estates took over the lease last year, the pub has been vacated and was occupied by squatters in April this year.

When asked about the LGO investigation in April, Chris Lee, Merton Council’s director of environment and regeneration, said: "We are confident that in our proposals for the Morden Tavern site, we have complied with council policy, procedure and government legislation."

The deal to sell the pub for a rumoured £1m– which Mr Smith said is significantly undervalued from the £2.1m he believes the site is worth – is subject to the council’s planning committee granting Reef Estates permission to build flats on the site on Thursday, July 21.

Hundreds of residents have formally written in opposition to the plans and the CMT has told the LGO they believe the council broke its own policy to protect pubs.

This morning, Mr Smith said: “If the LGO come back and say it has not been done right, the contract between the council and Reef Estates could be classed as void and they might even have a compensation claim against the council.

According to Merton Council’s own planning rules, it has a duty to “protect public houses” except where it is proven to be no longer economically viable, has been put on the open market to interested operators and there are alternative pubs in the locality.

But CMT claimed it has evidence the council turned down a previous offer to jointly market the freehold and leasehold to interested pub chains or develops, which it believes would have increased the value of the site.

It is also claimed the council discouraged other developers from entering the bidding for the leasehold of the pub by not making them aware that the freehold may also be up for grabs, making the leasehold a much more attractive option for developers.

Instead, CMT has alleged, the council were in private negotiations with Reef Estates before and during the sale of the leasehold about the potential to develop the site, in which no minutes were kept for meetings between the council and Reef to discuss the deal.

Mr Smith said he also raised concerns in person three weeks ago with the council leader, Councillor Stephen Alambritis, that the council’s own Design Review Panel gave the thumbs-down to Reef Estates plan.

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