Corruption in Fylde?

In 'Asset Mis-Selling' and 'And There's More' we updated readers on the Commissar's plan to put a hostel on Heeley Road.  Whilst this is of special concern to people that live in the area, it should also be of huge concern to everyone in Fylde.

Taxpayers are being ripped off by a Council that was not only incompetent financially, but one that also is now so emasculated and politically directed that proper scrutiny of decisions is virtually impossible.

We believe the Leader of the Council, Cllr John Coombes; The Chief Executive, Philip Woodward; together with the then Executive Manager for Strategic Planning and development Paul Walker and at least one other senior Cabinet member turned down an offer of £310,000 for the land at Heeley Road, knowing they would receive less than the site was worth, in order that they might achieve "other council objectives in the future"

This decision was taken in June 2007 in the middle of the accounting disaster that caused the new Finance Officer who inherited the unholy mess to report a loss of £1.2 million and make a raid on Fylde's reserve account to cover that loss. It went on to cause the closure of the swimming pools. The disaster had other repercussions which are still with us, and there are more yet to come out.

This is a sorry tale we tell. It is a tale that should make good officers and common-sense councillors hang their heads in shame.

It has enough potential for a criminal investigation of the activity that has taken place.

We believe an initially bad decision has been compounded by a subsequent attempt to cover up the whole truth and to manipulate information so as to prevent councillors from knowing the true position.

We assert that even this month, the Council is wasting at least £500,000 to pursue this wholly unnecessary and financially appalling scheme to put a homeless hostel at Heeley Road.

We believe it is doing this in order to hit a Government tick-box to improve its performance target, and to hell with the financial consequences.

According to the YMCA, £500,000 would pay the subsidy to keep St Annes Pool open for another three years

It is equivalent to more than £16 on a Band D Council Tax bill. That's £16 being poured down the drain for every household in Fylde.

It represents a disgraceful triumph of policy over common sense.

So why are they doing it?

Well, the Politburo Cabinet will no doubt say that housing the homeless is their top priority.

We agree.

Housing those people who are unavoidably homeless is probably the most important thing a Council can do.

But the issue here is not about housing the homeless, it is about how you do it, and about what the Council is doing with our money.

• It's about how the Council's own rules are being set aside to sell land in contravention of its own Standing Orders.
• It is about deliberately ignoring the chance to get the best price for an asset disposal.
• It's about not making use of alternative housing arrangements that would provide the homeless facility at no additional cost.
• It's about officers who apparently failed to tell Cabinet members that the Heeley Road Hostel scheme wouldn't be financially viable if it only housed people who were accepted as homeless after the routine checks were made.
• It's about a Cabinet that doesn't seem to know what the officers it employs are doing in their name.
• It's about selling privately and avoiding putting the site out to competitive tender because officers and senior councillors knew full well they would get a better offer for the land from the private sector and didn't want to have to accept it.

It led to attempts to gerrymander decisions at Cabinet, Scrutiny Committee, and Council in order to avoid putting the land out to tender, and it's about an offer in the last three weeks to buy the site for more than the council is planning to sell it to Muir Housing for - an offer any sane person would jump at, but one which this financially incompetent and inept administration is not prepared to accept.

In this matter, Council Leader John Coombes and Chief Executive Philip Woodward are the two people with overall responsibility. We believe both should consider resigning. By not doing so they demonstrate they know no shame and take no blame for this financial madness they have caused and continue to preside over.

The story begins with former Chief Executive Ken Lee's insane decision to build a new town hall funded by asset disposals. As part of this, dozens of sites were identified for possible disposal. This was whittled down to a handful for further investigation, one of which was the Heeley Road depot site - across the road form the former 'Fairways' garage.

As soon as this sort of thing happens, potential developers start sniffing round.

In June 2004, the Fairways site next to Heeley Road depot was the subject of a residential planning application by a company called Top Drawer Developments.

The company heard that the depot site was potentially to be sold, and expressed an interest. They thought a combined development on both sites would generate a better investment return for both them and the Council.

By August the Council had agreed with them that this idea was a way to maximise the income and produce a better development scheme.

According to Top Drawer, after discussion with the Council, they were asked to, and did, withdraw their planning application for the Fairways site alone, expecting to submit a new application for the comprehensive development of both sites as one.

But then the Council changed its mind, saying it had enough land to meet all its housing needs, and it didn't want to jointly develop the site.

In January 2006, a further enquiry was made to buy the depot land. The Council said they thought it would be included in the wider offer of sites for tender, but they were "mindful of the benefits of a private treaty negotiation with the owners of the adjacent site"

In July 2006, the Council's Mr Walker said the Council was very interested in disposing of the depot site, and that marketing of the site would commence in the near future.

In August, representatives of Top Drawer sent an offer of £310,500 to Fylde Councils property agent, offering to buy the depot site for a combined residential development with their Fairways site.

There was no reply

Another letter was sent making a formal unconditional offer of £310,000 in October 2006.

The council replied in November 2006 to say it was prepared to defer a public offering of the land in lieu of a period of private treaty negotiations. This sounded encouraging.

However, in May 2007, the Council said it was withdrawing from negotiations to dispose of the depot site, and in June 2007 said the depot site was no longer on the market for sale.

In October 2007, the storm erupted, when Muir Housing announced their planning application for the homeless hostel.

That planning permission was granted.

In June 2008, the Politburo Cabinet went into secret session to discuss selling the depot site. The secret report they received advised them that if it was sold for 'Affordable Housing' the estimated value was £171,400, but if it was sold on the open market, it was estimated to be worth £285,400.

Quite how the Council's officers had forgotten the offer of £310,000 from Top Drawer developments is a mystery, but they recommended the Cabinet to sell it to Muir at the lower of the two valuations and also to give Muir a grant of the same amount from the Council's 'Affordable Housing' fund.

However, the Heeley Road opposition group made a fuss about the sale price. They said they had a professional valuation of £500,000 and evidence of an actual pro-rata sale price on adjoining land at £407,000 - and that land was on sale at Whitehills for office use at pro rata £346,000. They published these figures to all Councillors and in the press.

When the Politburo met, they disregarded their officer's recommendation of the lower price, and opted to sell at the higher one of £285,400 (Again this included a grant of £285,400 to Muir, so the cost was really nil).

However, this decision was unlawful.

Deciding to sell land at an estimated value conflicts with the councils own code of governance called 'Standing Orders'. These are set out in its Constitution. They say the only way land may be sold is by competitive tender.

So, the Politburo had broken the rules. Did anyone notice and do anything about it? No they didn't.

Did the Councillor in charge of the Scrutiny Committee notice this and call-in the decision? No she didn't

The situation was only put right when the Hostel Group approached former Council leader (the newly beatified - Saint) Paul Hayhurst to request a call in of the decision.

He and others did this, and his action effectively 'undid' the Cabinet's decision (technically called 'recovering' the decision) pending a Scrutiny Committee's review of the decision.

So the illegal decision became undone by Cllr Hayhurst's action, and the Council's brief foray into illegality was brought to an end.

The Scrutiny Committee reviewed the matter and said it should be referred to the full Council for further discussion with a recommendation to sell the land by competitive tender.

This is good practice, common sense, and complies with the Council's Standing Orders.

But it was not what the Scrutiny Chairman wanted. She wanted to refer the matter back to her colleagues on the Cabinet (who share the same political allegiance and a desire not to tender this site) so they could review their own decision. However, she didn't get her way. At least not at the Scrutiny Committee.

But when it got to the Council meeting, the Scrutiny Chairman, Cllr Mrs Buckley, simply noted the decision of her committee, and then proposed an entirely conflicting resolution which was to seek another valuation.

The intention here was to generate another estimate of the value in order to justify the sale of the land without exposing it to competitive tender.

You can see here a clear intention to avoid putting the land up for disposal on open tender that both the Council's Standing Orders and the decision of the Scrutiny Committee required.

Her approach to this matter broke two rules. First, there is a requirement for the Chairman of a committee to propose the minutes of their committee when reporting to council, and secondly the requirement to sell the land by competitive tender still remained.

Furthermore, if she had proposed the minutes of her committee as she should have done, she would have been morally obliged to vote in favour of her own resolution. This would have depleted the vote of her own political party, and added it to the vote of the 'opposition'. Not a good idea in a 'close vote' situation.

Technically, the minutes of that Scrutiny Committee do not exist so far as the Council is concerned. They have been neither proposed, nor seconded nor accepted nor rejected. This is quite disgraceful, and something experienced officers like the Chief Executive and Solicitor should not have allowed to happen.

So it was, that her improper resolution, (which itself contravened Standing Orders), was allowed to proceed by the Chief Executive and by the Council's Monitoring Officer and Solicitor, (both of whom were officiating at the meeting). It was proposed by Mrs Buckley, seconded by a primed Councillor Threlfall, and voted through at Council by a majority of the ruling group of Conservative councillors.

The adopted resolution referred the matter back to the Cabinet with a recommendation to get another valuation of the land.

Such is the contempt of propriety at Fylde these days, such is the arrogance of power; such is the incompetence, or perhaps intimidation, of officers that these situations now go unchecked.

It is clear there was a deliberate intention not to allow this land to be sold on tender. Whether that was because those involved knew it would mean the Muir scheme would be outbid by private sector prices is open to conjecture. From documentation we have seen, we suggest several people knew or ought to have known the private sector would want to bid, and they would bid more.

When the Council's decision was reported to the Politburo Cabinet meeting on 4th September 2008, the group from Heeley Road made a presentation to the Cabinet. In fact this was the first exercise of the public prerogative to address Cabinet.

Group Chairman Bob Dagnall spoke of standing orders being contravened, the risk of a housing association cartel operating, and how in his view, Councillor Mrs Buckley had demonstrated a bias in favour of the outcome desired by her party political colleagues.

Another said the principle of concentrating homeless people was wrong, especially where it was used (as was planned) for sometimes troubled and unvetted adults sharing communal rooms with each other and with children. He argued for dispersal of homeless families to avoid stigma for them, and potentially inappropriate behaviour from residents who were 'troubled'.

Another said with property values depressed by the credit crunch this was not the time to be selling land at all. But, he went on to say, there was a way to provide for the homeless at no additional cost to the Council.

He said New Fylde Housing has plans to increase the number of units it owns on the second half of the Heyhouses estate from 80 to 111, and the Council had already agreed to fund at least some of the extra units. He said the Council should make it a condition of its funding that 11 of the extra 31 units were designated for use by homeless people. He argued that this would produce the 11 homeless units and leave the Council with an asset at Heeley Road worth £400,000 or more once property values recover, adding that in the short term, the depot could also produce revenue income if it was rented out for light industrial use.

Another person spoke, and pointed out that homeless presentations at Fylde were falling. They had gone down from 200 presentations four years ago to only 100 last year, just as the number of presentations accepted as being homeless (and that Fylde has a duty to house) has gone down from 78 four years ago to just 11 last year, and that sort of number didn't warrant a building of its own. There would not be enough people to fill it year round unless unvetted people were admitted.

A local mother also spoke of fear of crime and property value decline as had been experienced elsewhere with similar schemes.

The Cabinet seemed to have been shocked by these revelations. Cllr Roger Small said "I would not be speaking here tonight and I would not vote for any scheme if I thought it would be a bail hostel, or one that imported criminals into the area. I wouldn't support it full stop" later adding "I repeat I would not support any scheme that could be dangerous to local residents in any shape or form"

Cllr Karen Buckley present at the meeting said "I think the major concern is that people may be placed in the accommodation whilst the checks are being carried out, and that's a huge concern, and I share that concern and I can't support that taking place"

Cllr Simon Renwick said "I share some of Councillor Buckley's concerns as well and I think she's come up with a couple of very valid points. I'm not 100% sure we are getting those assurances from the housing team tonight and I'd like to say that if Councillor Buckley's concerns aren't addressed, in a more concrete manner then I don't think I will be supporting this tonight." And "I'm still not 100% convinced what the Chief Executive's saying is reflecting the criteria that Councillor Buckley was talking about. I know what the Deputy Leader is saying that in as much as when the management team or management structure is being put in place we can put conditions on it, but are those conditions going to be the conditions that Councillor Buckley is talking about - that this won't be the first port of call for anybody that presents themselves....."

Patently, senior Councillors had no idea what the scheme was about. They had no inkling that it was intended to house people (whose background and circumstances were unknown) whilst these checks were carried out.

It was not intended for those who had been accepted as being homeless.

The meeting proper began and the Cabinet was told that new valuations had been obtained

This alone is interesting.

The Council's resolution was actually that the Cabinet should call for a further valuation, but the valuation had already been sought (ie without the Council's or Cabinet's authority for the expenditure). We asked the Council's solicitor about this. He indicated that the additional valuation probably shouldn't have been obtained before authority to pay for it had been given (we believe the cost was in the region of £1,000), but it had been done, and there was no real point trying to do anything about it now.

The fact is that he, or the Chief Executive, ought to have stopped this from happening. Clearly, someone was in a hurry to get this moved on.

The report to Cabinet summarised a series of valuations. Four different professional valuers (between 2005 and 2008) had estimated the full market value of the site as being:

• £265,000;
• £285,400;
• £242,590 - £256,860;
• £250,000.

At least one of these, (probably two), and certainly Council officers, were aware of Top Drawer's unrestricted offer of £310,000 in 2006.

The valuers also said that if the land use was restricted to just "Affordable Housing" (Which actually means subsidised housing), then the estimated land value would be:

• £195,000;
• £175,000;
• £171,400;
• £145,690 - £154,260;
• £100,000.

And if the land was restricted to use for the proposed Muir scheme? - The land would be worth nothing. Literally.

So what did the Politburo Cabinet do?

They decided to suspend their Standing Orders so they could set aside the rule that required land to be sold by open competitive tender. Council Leader John Coombes led the cabinet in this decision, despite his having being party to a discussion with Chief Executive Philip Woodward and Paul Walker about the earlier £310,000 offer from Top Drawer Developments.

Both Mr Woodward and Mr Walker were at the meeting. Neither sought to persuade the Cabinet to abide by the Council's Standing Orders and sell the land by open competitive tender to obtain proper value for taxpayers.

Cabinet also decided to note the valuations in the report and to agree the nil valuation of the Heeley Road site for delivery of the Hostel.

They agreed to sell the land at Heeley Road to Muir for £250,000 and to release (ie give Muir a grant of) the same amount (£250,000) so the real price paid by Muir would be the 'nil' valuation.

That's how they justified giving away land claimed to be worth up to £500,000

They also agreed to create a team to meet with the Heeley Road group to consider the future management of the proposed facility.

So the land was to be given away for nothing, yet it was worth up to £285,000 on their own valuation; they had an offer of £310,000 that they had deliberately declined; and the Hostel Group provided evidence of pro rata local land sales of up to £500,000 for the Heeley Road site.

We understand that in a subsequent meeting with the Heeley Road Group it was admitted by the Council's officers that the hostel scheme would not be economically viable if admissions were limited only to those people the council accepted as being homeless.

What that means in practice is that there are not enough homeless people in Fylde to produce the rental income that would fund the ongoing operation of the Hostel.

Members of the Heeley Road Group told counterbalance they watched as this truth dawned on senior councillors when they realised the mess they had got themselves into.

Then the Heeley Road Group withdrew from talks with the Council.

We understand this breakdown in talks arose when the Council's representatives refused to consider using accommodation in the redevelopment of Heyhouses (that FBC was already funding) to provide the 11 units the Council claimed it needed. The group said there was no point in further discussions if legitimate alternative schemes would not even be considered.

Then there was an attempt by Councillor Howard Henshaw to call-in the decision of Cabinet on the basis that it represented bad value to the taxpayers and residents of Fylde. Having spent part of his former life with the World Bank, he knows a bit a bout money. His call was supported (as required) by nine other Councillors. But the Chief Executive refused to call a Scrutiny Committee meeting to consider this properly authorised call in request. This blocked further discussion of it at all. We understand the Heeley Road group is currently looking into the possibility of a Judicial Review of this decision as being unlawful.

So Mr Woodward blocked the prospect of discussion on a scheme that would have provided the 11 units at no cost; would have saved £250,000 of expenditure as a grant to Muir; and would have saved the Government over £1million in grant for Muir to actually build the Hostel (and God knows the Government needs all the help it can get at the moment).

He did this knowing there has been a firm offer of £310,000 for the site.

This year, after a budget deficit that increased from £300,000 at the start of this year, to a reported £800,000 at the last meeting, the Council is still planning to give the land away to Muir.

But in the last three weeks, there has been a change.

A fresh approach has been made to Fylde Council on behalf of a company called Town Manor Developments Limited.

Agents acting for the new owners of the Fairways site (which has just been bought by Town Manor), want to resurrect the plan to do a comprehensive development of the site using both the Fairways and the Heeley Road Depot site to increase the value for everyone and to put some affordable houses on the land.

On 29th January 2009, they wrote to the Council to say they oppose the sale to Muir on the basis that it does not give local people what they want; that it is bad value for all taxpayers in Fylde; and because the sale price of the site to Muir is not the true value of the site.

We understand the Hostel Group agree, and have been telling FBC this almost right from the start.

Town Manor has said they are willing to pay at least £310,000 for the depot site and will provide affordable houses on it.

And they don't need any grant to build the affordable houses.

This would represent a huge cash saving for Fylde Council.

To resolve this matter sensibly would only require,

• 11 of the 31 extra units FBC is already paying for on the Heyhouses estate to be designated for supported housing.
• That would save FBC £250,000 of money it can then spend on more affordable housing for young couples.
• It will also allow the sale of the Heeley Road site for something in the order of £310,000 or more, and provide even more affordable housing.
• It would give an overall saving of £560,000. More than half a million pounds for a council verging on bankruptcy and nervous of commissioners being installed to take over its finances.

You might think that anyone with half a brain would be snapping their arm off.

So what has happened?

Well, a week after making the offer, we understand that the people acting for Town Manor Developments were still waiting for a reply.

Is there any wonder we use terms like financially incompetent and inept in connection with this present administration?

Is there any wonder we call for a change of leadership on both aspects of the Council?

Is there any wonder that the thousands of people who read counterbalance each month will wonder if there is something rotten and corrupt at the core of Fylde Council?

Those responsible for this, and for all the other financial disasters we have catalogued on these pages, are (literally) ruining a once sensible, practical, prudent council that delivered the public services people wanted.

There are now only two routes out of this mess. Either the threatened commissioners should take over (which, sadly, would be even more of a disaster than the present arrangement), or there needs to be a wholesale purge of all those tainted with the incompetence of this administration - and that means the people at the highest levels. This will involve an unpleasant and wholesale change of personnel including all or most of the Cabinet responsible for the decisions, and senior officers who have allowed the situation to exist. Like the credit crunch bankers that were imprudent, this toxic, policy-driven council now cannot escape root and branch reform.

There also needs to be a complete policy reversal to change this ruined, almost bankrupt, council back to being to a budget-driven council that works within its means, not one deluded with policy and grandeur that tries to find the money for its grandiose ideas.

They could start by saving the £500,000 as shown in this article.

And do it quickly.

Dated:  13 February 2009