The breakthrough deal which would see Swindon's beloved Oasis leisure centre reopened might be considered ‘unlawful’.

That’s according to the private and confidential legal advice offered to Swindon Borough Council by solicitors and summarised in a paper attached to the report to cabinet on Wednesday (November 15).

The meeting will see members of the Labour administration discuss and vote on whether to approve the deal between the council and developer SevenCapital which could see the Oasis - shut since November 2020 - refurbished and re-opened, but no indoor ski centre on the North Star site.

The issue, according to the summary of the advice which has been seen by the Adver despite not being publicly available, is that the new deal might be considered a significant variation to the agreement with Oasis landlords SevenCapital, where the snow centre and houses were to be built.

If the new agreement is a variation, then there could be an issue because there has been no competitive tendering process for the new arrangements.

The summary of the legal advice says: “From a procurements perspective, two key questions are relevant:

“1. Whether the [original] Development Agreement and leases are public works contracts (PWC) for the purposes of Public Contracts Regulations 2015 or its predecessor and 2. If so whether the Head of Terms [the new agreement between the council and Seven Capital] would constitute an unlawful modification to this contract and therefore breach the Public Contracts Regulations.”

“On balance we consider both questions should be answered in the affirmative.”

The advice clarifies what the issue would be: “If the DA and leases are subject to PCR any amendment must be made in compliance with procurement law [which] generally prohibits substantial changes to regulated contracts.

“One of the circumstances in which a change is considered substantial is where the change shifts the economic balance in favour of the contractor.”

“By its very nature the Heads of Terms aim to improve the viability of the scheme and therefore we consider the change is likely to be substantial.”

Because of that, the legal advice is that a challenge, in law, to the new agreement could succeed: “We consider there is at least a medium to high risk of this challenge being successful”

It adds that the council considers a challenge to be unlikely.

The advice discusses some possible responses to a challenge, putting forward an “untested argument” on the potential separate treatment of the Head of Terms from the underlying agreement but it adds: “It is not clear that the courts will accept this.”

The solicitors say the main risk is that a challenger could seek to cancel the contract or seek damages.

There are two separate agreements between Swindon Borough Council and SevenCapital for the Oasis and the North Star site.

The first is the 99-year lease SevenCapital has on the Oasis site, which has about 89 years to run.

The second is the development agreement for the cleared former Clares factory site nearby, where SevenCapital would construct the indoor snow sports centre and after that would be able to put up hundreds of flats and houses on the rest of the land. 

The new agreement announced last week would see the developer refurbish the Oasis, and possibly then buy the land and building from the council for at least £6m, although it is understood there is a buyback clause the council may be able to invoke.

The new agreement says the snow centre plan is unviable post Covid-19 and will allow SevenCapital to use the site for housing.

A Swindon Borough Council spokesperson said: “We have received confidential legal advice and, due to it being confidential, we will not comment at this stage.”