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Capital Funding Request - Lytham Hall

Capital Funding Request - Lytham Hall"And here's one I prepared earlier"

Surprise, surprise. The Heritage Trust for the North West has asked Fylde Council for £300,000 toward its match funding Heritage Lottery appeal for Lytham Hall.

In his report to Fylde Council's Cabinet on Wednesday next, Fylde's Chief Executive, Philip Woodward, (who is also an officer of the Clifton (Lytham) Housing Association  responsible for administering Melton Grove), appears to want us to believe that it is entirely a coincidence that Melton Grove has been lined up for sale and is about to be sold for a big capital receipt at about the same time as the request for £300,000 is also being reported.

So who are the Heritage Trust for the North West who are asking for money?

Well, they are the outfit that manage Lytham Hall on behalf of Lytham Town Trust (which itself is a Limited Company that actually owns the Hall).

When Lytham Town Trust Ltd. took ownership of the Hall from Guardian back in the 70s, 90's (Typo update) they were also enriched with a sort of 'endowment fund' by being given the leases of several important income-producing farms and other land and properties locally that would to help pay for the Hall's upkeep. We assume that income is still arising.

Both Lytham Hall, and the Lytham Town Trust have connections with Cllr Tim Ashton.

Readers will recall he's the same councillor who recently sent an strongly worded (and in our view entirely unfounded) letter of complaint to Fylde's Mayor suggesting she should stand down from the Mayoralty because, (he said), she exerted undue or improper influence at the last Council meeting. We were there, and she didn't. But exerting influence is probably something Cllr Ashton understands quite a lot about.

He is a Fylde Borough Councillor, and a County Councillor.

He is also a director of the Clifton (Lytham) Housing Association that manages Melton Grove on behalf of Fylde Council

He is, according to their website, also one of the Directors of Lytham Town Trust Ltd. (That's the company that own the Hall, and whose agents have just asked Fylde Council for £300,000 toward it)  Furthermore, his father, who is a really nice and respectable gentleman, is also Honorary Life President of Lytham Town Trust.

So we think Cllr Ashton, with his various hats, and family connections, has a unique perspective on this request for funding.

We were told in confidence, as far back as early January, that at least some of the Fylde Conservative group were hatching a plan that dated back to November (or even earlier) to sell off Melton Grove and use the proceeds to help their election prospects.

We were told two projects had been settled on, one to contribute a large capital sum toward Lytham Hall, and another to spend in Ansdell - possibly doing up the town centre, or some sort of environmental improvement scheme.

Although several sources known to us were hinting that the Melton Grove situation needed a good dose of looking at, we couldn't get any corroboration, not even for part of the story, until Mid February when we published 'Melton Grove Mess'

In that article, we set out for the first time, the tentative threads that were the background to a story that we thought was about to break.

As a result of publishing that story, we had contact from several readers, and were able to corroborate some of what we had heard in January.

Then, a week later we published 'Melton Grove Scandal"

We said....

"It's just possible, that when all the facts come out, some people will believe the end justifies the means.

We disagree.

However laudable the end might be (and we believe it is), the use of deception, sleight of hand and half-truths to keep some elected councillors, residents, (and the public) in the dark until it's too late to do anything - whilst other councillors would be able to line up events that could produce an election-winning, blockbuster news release at the expense of the needs of the (mostly elderly) residents in Melton Grove - is a disgrace that we today expose."

We went on to explain how most of the Councillor Directors of the Clifton (Lytham) Housing Association had connived in secret to sell off this asset intended for the town and the townspeople that was to be there in perpetuity for the current *and future* worthy residents of Lytham St Annes.

Acting as callous, selfish, asset-stripping people, all but one of those in whose trust this facility had been placed were ready to dump the incumbents into the hands of a private developer.

Like Pontius Pilate, they have sought to wash their hands of responsibility in all but the most simplistic and basic sense. They betrayed the trust that had been placed in them to protect the worthy townspeople of Lytham St Annes who are currently residents.

They attempted to salve their consciences by saying no existing residents will be forced out against their will. But they have completely failed to protect the interests of the *future* worthy townspeople of Lytham St Annes in whose interests the scheme was established, and in whose trust the property was conceived.

Not content with that, the Councillor Directors set about putting in place changes to their constitution, and tax avoidance measures that would simultaneously enable the sale, and also tie the hands of anyone wanting to use the money.

Land disposal means that a large chunk of the proceeds will have to be given to a registered charity or it will be 'lost' in tax so they're selling the company.

The comparative ethics of a local authority embarking on tax avoidance measures - in the same way that an Essex-boy might put his frock shop proceeds into his wife's name in an offshore bank account is a moot point, as, indeed, is the Councillor Directors negotiating and offering to accept a first payment from the developer when contracts are exchanged, and another payment when he is granted planning permission by the same council that is selling the land to him.

We'll leave our readers to work out what they think of people who are prepared to do that.

We think it stinks.

We believe this was all part of a plan hatched in late 2010, and we have some evidence to support that.

We also believe this plan shows a greater allegiance to a self-preserving political motive than to the electorate that placed its trust in those it elected to do the right thing.

It certainly shows a lack of care toward the poor folk of Melton Grove who are being driven sick with worry over this matter.

But as we went on to say in earlier articles, the other side of the coin was what the money was going to be used for.

As a result of publishing 'Melton Grove Scandal', we  received confirmation from other sources that a small part of the money was destined for Ansdell, but a large chunk was planned for another purpose. And, as we said in Melton Grove Scandal "We believe the answer, Dear Reader, is Lytham Hall."

In 'Melton Grove Meetings' published on 2 March, we again referred to the Hall being the intended recipient of a large part of the cash, saying "And it might also be because they can sidestep some of the tax liability if they give some of the proceeds to charity and, as we've said before, we think Lytham Hall is in the frame there. Whether those running the hall would be willing to accept it under such circumstances will be an interesting situation to watch."

Well, The Heritage Trust for the North West have now made their ethical position on that very clear, and we don't think its a pretty sight.

We assume they have the backing of the Lytham Town Trust Ltd in their request for money, and if that's the case, they have damaged their own reputation so far as we (and we suspect others) are concerned.

We also said "We've been shocked by this sordid and sorry affair. What we see in this shameful episode is Councillors behaving more like shysters hustling on Blackpool promenade, and officers who are colluding in the process. It is both disgraceful and shameful."

Then, in Political Capital? published on 2 March, we showed how the Cabinet, with connivance from some of the Council's most senior officers (who also act as officers for the Clifton (Lytham) Housing Association - and must therefore be at risk of being perceived as having a conflict of interest), had used deceptive practices to keep the potential income out of Fylde's budget.

We concluded that article with....

"What this means, is that the budget for next year will be set and fixed *before* the income from Melton Grove is taken into account.

We invite our readers to come up with any reason for this state of affairs and this combination of events other than a deliberate intention to create an 'off balance sheet' capital receipt at a time when the ruling group (justifiably in our view) fears for its chances at the May elections, and would welcome some cash to provide 'good works'

There was a time when those running Fylde Council could be trusted to act with honour. There was a time when Fylde Council could be relied upon to be a role model for integrity and honest dealings.

The awful way this matter has been handled brings shame on all who support it and, if it were to turn out - as has been alleged to us - that the income from Melton grove is about an electoral war-chest, then this 'blood money' would be so tainted that no right thinking person could possibly accept the 'benefits' it might bring.

If we were a Councillor who had spoken in support of this scheme, we've be ashamed to go into local shops, or to walk the streets.

Then in 'Rolling in it' we showed how (depending on which version you believe) there was going to be £100,000 (reputedly from the sale of Melton Grove) or £22,000 that Cllr David Eaves spoke of from the Blue Bus money, available for a reformed Ansdell business group to spend "regenerating" Ansdell

And if our readers care to take a look at page 105 of the Cabinet Agenda - the section about 'Lancashire 2012 Open Golf Outline Action Plan' in the part headed "Next Priorities (Projects which could be delivered if additional capital funding were to become available)" (We've heard that one before, haven't we readers!)...., it says

"13. Ansdell (Woodlands Rd) Improvement Project
Improvements to the public realm along Woodlands Road, particularly in and around the station to enhance this as a key arrival point during the event and improve use of this area afterwards"

Ho Hum.

We concluded 'Rolling in it' by saying: "But we're now picking up stories about a sale of the shares in Clifton Housing being lined up for 23 March, and the Cabinet Meeting has just been put back to that same date. But the Call-in date has now been fixed for 24th March."

At the time, that date change puzzled us.

Cllr Fiddler, in his 'Individual Member Decision' gave a commitment to a full detailed debate on the matter, and decided in principle...

1. For the Council to receive the transfer, at a nil or nominal consideration, of all issued shares in the Clifton (Lytham) Housing Association Ltd.

2. Following the transfer of the shares under recommendation 1, to transfer the shares to Windmill Oaks Ltd at the consideration and on the terms negotiated with that company by and on behalf of the directors of Clifton (Lytham) Housing Association Ltd.

This wording, and the change of date, gives us a horrid sinking feeling that the phrase "for the Council to receive the transfer" is the local government equivalent of "all necessary means" (as in the run up to the Iraq war), and it implies an assumption of the shares in the name of the Council - even from a Councillor / Director who might be unwilling to part with his share voluntarily because he disagrees with the sale of the company to a developer.

We are also picking up stories that officers are getting preparations ready to transfer the shares to Windmill on 23rd March, (but we suspect there may be a further step to seal that transfer and actually sign the contracts that could take a few days).

Meanwhile..... Next Wednesday's Cabinet agenda has the following recommendations:

1. That, the Cabinet agrees, in principle, to a capital grant of £300,000 being made to the Heritage Trust for the North West for the Lytham Hall restoration appeal conditional upon the successful sale of Clifton (Lytham) Housing Association Ltd and the council receiving the capital receipt.

2. That the Council be recommended to agree an addition to the capital programme in accordance with recommendation 1, to be fully funded from the Clifton (Lytham) Housing Association sale receipt.

So, if the Cabinet decides in principle to give £300,000 to Lytham Hall, and to recommend that to Council, it will be quite easy for a Scrutiny Committee Meeting the following day to be packed with Conservative hard line supporters, who say that because the Council will be debating it on 28th, there is no need to formally call in Cllr Fiddler's decision (because it will be going to Council anyway)

And then at the Council Meeting on 28th, the Chief Executive or the Solicitor can tell the Council that because the Scrutiny Committee didn't actually call-in the decision, Cllr Fiddler's 'in principle' decision was, by default, confirmed, and the officers have already transferred the shares to the Developer, so the only thing Council can do on 28th is to have Cllr Fiddler's 'full detailed debate' about what to spend the money on. But given that a lot of it will have to go to a charity or be lost in tax, they might as well give it to Lytham Hall.

We really don't like thinking this way - of a conniving, scheming, twisting, deceitful group of people that we should be able to trust - but we have to say it would be entirely consistent with their recent past performance.

One more thing. Remember the puzzle about the date?

Well, the date by which the pledges of funding for the Lytham Hall bid must be made to the Lottery Fund is.... Guess what?

The same date as the Cabinet Meeting.

23 March.

It's the last day the intention to provide money can be declared.

So now we see this matter just as it was alleged to us in January.

We were told then that the ruling conservative group was (with good cause in our view) worried about its electoral prospects. It hatched a plan late last year to generate a big capital receipt, another to keep it off the 'balance sheet' so it becomes useable outside the budget, and another to make sure a large lump of it has to be given to a charity. And they tried to make sure hardly anyone - even other elected Councillors - knew it was going on.

And they cared not a fig about the people in Melton Grove who were being sacrificed on the altar of their electoral prospects.

We warned that Councillors were sleepwalking into disaster when the Council's Constitution was changed, so it will be no great surprise for our readers to know that the whilst the Full Council still has to set the overall "Budget Framework" - in some circumstances, spending priorities can now be determined and made by the Cabinet, and even by individual Cabinet members.

The current Constitution allows the Cabinet (or individual cabinet members) to make decisions in respect of all executive functions, including ....the approval of the principle, content and design of capital or revenue schemes or procuring of goods or services with an estimated value between £15,000 and £100,000 within the approved policy and budget framework. (Over that it has to go to the Council).

Readers will note the Cabinet's £100,000 limit, and the amount spoken of by "someone called Ben" and the Ansdell businessman at the start of our 'Rolling in it' article where £100,000 was also the figure mentioned.

After Lytham Hall gets some dosh, the Cabinet, or even a single member acting alone, can go ahead and spend the rest at £100,000 a pop for say, Ansdell? and another £100,000 for, well, ... what suggestions can our readers come up with for a Council that's about to be rolling in cash and £8 million in debt?

This is a defining moment for Councillor David Eaves.

It is his own 'Swimming Pool' moment.

His own 'Forest sell-off' moment.

If he drops the idea of selling Melton Grove and replaces those Directors who are (literally) incapable of running it properly, he could earn widespread respect from the right thinking people of Fylde.

If he allows it to steamroller through, on a pre-packed Conservative majority vote in Scrutiny and Cabinet, and takes the developer's thirty pieces of silver that the Council patently does not *need*. If he breaks faith with the covenant made with the Clifton family. If he fails in his duty of care to the residents of Melton Grove, then he will be betraying the trust that has been placed in him by many who had hopes for honesty and transparency from his administration - especially after that of the Commissar.

We believe that continuing with the sale of the Clifton (Lytham) Housing Association, and with it Melton Grove, will be seen as an incestuous decision that was both pre-meditated, and intentionally obscured from public view. It will bring the whole Council into disrepute, and, because of that, it will damage his party even more than the closure of the Swimming Pools (which was just as unpopular, but was, at least, transparent), and he will become the Judas of Fylde. The man on whose watch vulnerable elderly people saw their future sold for thirty pieces of sliver.

But none of this has to happen of course. There is no actual need to sell Melton Grove.

In this respect we can't put it better than the lady who's dad is trying to halt the sale until more thought can be given to the options. She said "the money isn't earmarked, the budget is sorted for the next five years without Melton Grove money, The council debt will not be reduced by the sale, the Clifton Housing Association runs at a profit which increases each year, the Tenants have not been properly informed under the Councils, 'Duty to Inform' - and a town asset that was gifted by the Clifton's for the elderly of meagre means ad infinitum is going to be sold unnecessarily and 26 of our elderly and most vulnerable townsfolk are in one way or another going to be upset."

If Lytham Hall is so important - and we can see the argument that it is important - Fylde can find the money needed to help the lottery grant in other ways, not least by borrowing the £300,000.

It is currently £8.3m in debt and has authority to borrow up to £12m, so another £0.3m isn't going to make that much difference for something that important.

The borrowing cost on the loan would be less than £50k a year, so they could chop out the useless spin-doctor service they're currently spending £60k on, and still have some change.

But in any case, they're forecasting to have £2.1 million their reserves at the end of this month, and the minimum reserve recommended is only £750,000 so there's a lot of spare cash sloshing around in the bank. There are alternatives.

It will not bode well if the hand of history records this Council as the one that damaged the cause of the Hall in the eyes of local people by tainting it with blood money from selling Melton Grove and putting both current and future worthy, elderly and vulnerable residents of Lytham St Annes in a worse position in order to do so.

We seriously hope for a change of the Council's head, and indeed a change of heart,  in the matter of Melton Grove.

Dated:  18 March 2011

UPDATE 20 March 2100:  Financial and Legal issues
We'd like to make something we said more clear. The use to which the proceeds of the sale can be put is limited to a charitable use or being 'lost' in taxation if the land and buildings are sold. But if the company itself is sold, we're told that restriction does not apply, and the funds arising could be used for any purpose. If we have said or given the impression otherwise, we're happy to have the opportunity correct or clarify it here and now.

The more startling news is that we've also just had confirmation of two further developments that took place on Thursday/Friday as this counterbalance was being published.

Firstly, on Thursday 17th March, the Councillors who comprise the Board of Clifton (Lytham) Housing Association were called to Emergency Board Meeting to transfer the share that had, until that date, remained in the name of the former and much respected Councillor Bill Thompson.

Thursday saw it transfer to Councillor Roger Small.

It seems they had forgotten to do this after Cllr Thompson died in September 2009, and Cllr Small was appointed to the Board.  (Yes, really).

We have no idea what effect that situation might have on the decisions and votes that took place (including the one to sell Melton Grove) at which Cllr Small was present and upon which he voted whilst he was not a shareholder - and thus not entitled to vote. That's one for the lawyers.

Secondly, and following that logic, we heard that several of the Melton Grove residents now have proper legal representation from the corporate and commercial division of a significant Manchester based firm of solicitors. We understand that after studying just some of the documents, they believe they have seen enough to say that the Council as a corporate body, and most of the individual Councillor Directors of the Lytham (Clifton) Housing Association, may be in breach of the law in several areas, and they are speaking of things like injunctions,   a court setting aside of the decision to sell, pursuing the Council for damages and, indeed, action against the individual Councillor Directors for breach of trust and of their fiduciary duty.

Councillors are generally protected from legal action because the Council insures for claims that arise against elected members in the course of their work as Councillors. Whether that insurance  also covers them when the are acting as the Directors of a private limited company might turn out to be an interesting question. It could be they too will experience the threat of having their lives turned upside down, and maybe even losing their homes - as the people at Melton Grove have felt in the last few weeks. We wonder if Cllr Small's decision to belatedly sign as a Director might turn out to be one he lives to regret.


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