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Melton Grove Mess

Melton Grove MessThere are a number of threads that come together for this story, and we ask readers to bear with us as we explain the background of each before drawing them together.

There is a plan to sell what appears to be a council asset (but it might not be owned by the Council at all). There's a secretive change to the rules of a Limited Company to allow such a sale to take place. There's a disgraceful change about asset disposal procedure that was railroaded through Fylde's Constitution - a change we have already predicted the Council and its officers will live to regret, and there's an issue about what happens next in what we believe is about to become the shameful saga of 'Melton Grove' - a peaceful and trouble-free enclave of retirement bungalows in one of the leafiest parts of Lytham (or at least that's what it should be).

1). SELLING OFF THE ASSETS
Way back on 23 August 2007 there was a Special Policy & Service Review Scrutiny Committee at Fylde Council. The press and public were excluded from the meeting whilst matters were discussed in secret. The chief item on the agenda was the 'Review of Council Assets', and fifty or so 'assets' (essentially areas of land) were considered for disposal. They were graded into one of four categories:

  1. An asset that could be or should be disposed of to achieve income.
  2. An asset that could potentially raise increased revenue.
  3. An asset that could or should be disposed of to others to continue to provide the council objectives.
  4. An asset that should be retained and if necessary improved/adapted.

One such 'asset' was a piece of land belonging to the Clifton Lytham Housing Association (that's is the official name for what most locals know as Melton Grove), and the Committee decided to recommend to Cabinet that if the Directors of Clifton Lytham Housing chose not to dispose of the Association to a registered social landlord, the Council would no longer support the administrative costs to the Association.

Then, in The Great 2007 January Sale? in Feb 2007, we showed how Melton Grove had been included on the list of 'Category 1' asset disposals - which were "Things that could or should be disposed of to achieve income".

We now realise we should have been much more puzzled by that, than we were at the time.

The Melton Grove bungalows were acquired from the Clifton Housing Group, and that was first established in 1952 by the Clifton family to provide social housing in Lytham.

But the Clifton (Lytham) Housing Association is a private limited company, so what was Fylde Council doing deciding to sell it off?

That said, it has always been perceived locally as being owned by 'The Council' who (at least up to 2007) also paid the administrative costs for the company - and it was council officers who ran the operation (and as far as we know, they still do).

As at January 2011, the Company Secretary was Ian Curtis (who is also the Council's Solicitor). The Directors of the company were:
- Councillor Brenda Ackers,
- County Councillor Timothy Ashton,
- Councillor Patricia Fieldhouse,
- Councillor Albert Pounder,
- Councillor Louis Rigby, and
- Mr Roger Small (who is also a Fylde Councillor but not listed as such on the Company documents.)

So there is a puzzle as to whether it is the Council's property, or whether it is owned by its Directors.

WHO OWNS MELTON GROVE?
Well, the plot thickens.

According to the data at Companies House, it is owned by The Clifton Lytham Housing Association Limited as a Limited Company (No: 00511329). Its address is: The Town Hall, LYTHAM ST. ANNES, FY8 1LW

Not much help or clarity there then.

Each of the six Directors owns one share in the company.

But the Directors are appointed by (and therefore can presumably be removed by) Fylde Council.

From memory we seem to recall they are usually appointed as Directors at the start of a new Council term, and we understand that once appointed, the Directors have the power to borrow or raise money and to mortgage the undertaking and similar things. So arguably they have the ownership and control of the finances.

But their latest accounts (Year ended 31 March 2010) say "by virtue of the fact that the shareholders in the company were also Councillors for Fylde Borough, the company was effectively controlled by Fylde Borough"

It also says under the glorious heading of "Post Balance Sheet Event" that "At a meeting of the Directors on 3 November 2010, it was resolved to dispose of the shares in the company to an external third party before the Company's next year end. (that's by 31 March this year)

However the definitive ownership issue is still not clear to us (or to Companies House it seems) because the Directors certainly continue to make decisions about the future of the Company.

THE SECRETIVE RULE CHANGE
On 5 January this year, a little over a month ago, the Directors, without reference to the Council, (and so far as we can see without reference to anyone else), changed their Memorandum and Articles of Association as follows:

In Article 6 (which is about control and transfer of the shares), they omitted the words

'shall not allot the same except to members of the Fylde Borough Council (hereinafter called "The Council") nominated by the Council'

and they substituted some new wording which said:

'may allot and dispose of or grant options over the same to such persons, on such terms, and in such manner as they think fit'.

They also deleted Articles 7, 10 and 14, and parts G and H of Article 18.

Those changes have now gone through, so the current M&AA no longer tells us what has been deleted.

We wouldn't be surprised to find it was something to do with providing social housing - because that was the Clifton family's intention in establishing the estate, and we would have expected to see such a limitation as part of the M&AA when councillors took over from the Cliftons - partly as a requirement to ensure it would carry on providing of social housing, and partly because of the honourable and straightforward way business was done in those days.

We could find nothing in the current M&AA that limits the company to provide social housing.

So the deeds done on 5th January removed the restriction that prevented the Directors being anyone other than a Fylde Borough Councillor - and that has cleared the way for the company to change hands to someone outside the Council's control.

Or at least it might have. - More of that later.

FYLDE WAIVES THE RULES
In Extra-ordinary Council, we reported an extra-ordinary Fylde Council Meeting held on 26 October 2009.

This meeting was outside the normal programmed meeting timetable. It had three very big items on the agenda Changes to the Constitution; a plan to reconsider a planning application; and 'Council Accommodation.'

We were critical of some of the proposed changes to the Constitution. We said.......

"Property Transactions
The property transaction changes are disgraceful and exceptionally dangerous.

Still stinging from being caught-out doing things wrong when they tried to give away the Heeley Road site (which turned out to be worth at least £400,000), the rules have now been changed so they no longer have to sell land either by competitive tender or by making a formal suspension of their Standing Orders in order to sell it at an estimated valuation.

As Cllr Buckley told a public meeting recently, this change was necessary because they were having to suspend Standing Orders so often to sell land, and it looked suspicious.

Too right it did.

The whole point is that suspension of Standing Orders should be something used in extremis - in exceptional circumstances when the proper process of selling public land by tender cannot be met for some fundamentally unavoidable reason.

The requirement to sell on tender is there for a good reason. It's to minimise the risk of 'insider trading' and favouritism. It's there to reduce the potential for fraud and dodgy dealings. It's very much easier for that sort of thing to happen when the safeguards are not in place.

Those with longer memories than the Commissar will remember the huge Poulson and T Dan Smith scandals of the 1960s which brought Local Government to its knees just as the expenses scandal has done for parliament.

So when Fylde was 'caught out' by not selling on tender and not suspending their Standing Orders to sell the Heeley Road site, instead of solving it by reminding all concerned that all land disposals MUST be by competitive tender unless there was an exceptional reason, they have simply changed the rules so now the default position when selling land is no longer that it must be sold on tender.

The key change is that "All disposals of Council land and buildings will be referred to the Councilís Principal Estates Surveyor, who will recommend a method of disposal and marketing strategy for the approval the Director of Strategic Development."

This is very dangerous for the officers concerned and for the good governance of the Council. It puts officers in the lead of how land is disposed of. Where this happens in a council that has a bullying, dogmatic Leader, it can subject staff to intolerable pressure to bend the rules under threat.

Just as bankers have been found wanting and have brought nations down by bending the rules on loans by allowing individuals to offer loans there was no real prospect of being repaid, so without the scrutiny and experience of the full council, sitting in open and transparent public session to approve both a disposal and the method of sale, there is the same risk of deals behind doors that few are aware of and we predict it will eventually lead to civic disaster, just as the excessive loans by bankers have done. This decision is bad for Fylde."

We simply couldn't understand how so many of Fylde's sensible councillors could have allowed such a change to be made.

But then, as we have seen many times before, with a Cabinet system in place, inappropriate decisions such as the delegation of asset disposals to an officer, can be railroaded through by a toxic mixture of keeping most councillors in the dark, and the brute force of a party-political block vote.

This Cabinet system is an awful way to run a Council.

The policy to change the Constitution and sell assets out of the public gaze was railroaded through by the former Commissar when the Council's 'Constitution' changed late in 2009.   Given that there has been no committee consideration on the Melton Grove matter, and no 'Individual Member Decision' on it has been published, the likely remaining option for the decision to dispose of the Council's Interest in Melton Grove is, (or will be), a 'delegated decision' to dispose of Melton Grove.

This is a process that stinks.

At a Council meeting on 24 January 2011, Councillor Kevin Eastham complained about reading of decisions made in the Councils name in the press rather than from official documents.

He said that nowadays, Councillors were now not even being informed - let alone involved - in decisions that affected their electorate. He asked whether in future Councillors could at least be told of decisions made before the press were advised. He referred to residents in his ward, and gave the example of the decision to sell properties in Melton Grove, Lytham St Annes without a committee decision.

Answering his question (or rather not answering it, but side-stepping it) Cabinet Leader Cllr David Eaves said "The Board of Clifton (Lytham) Housing Ltd had been in contact with the residents at Melton Grove on the current situation."

We were very uneasy with that reply, and have been concerned for some time about the procedure surrounding what appeared to be an asset disposal by FBC.

At the head of that concern is the issue of whether there should have been sale at all, and we're not yet convinced of that.

The follow on from there, is whether ALL the Councillors we elect ought to have had a say in that decision, or whether it has been done in private, by a small number, behind closed doors, using a process cloaked in secrecy.

But even if you disregard the 'whether' it should have been sold, there's another issue...

We know (from the inside) that at least one, probably two, (and possibly more) local Registered Social Landlords of substance (other than the one being mentioned as the 'new owner') were interested in Melton Grove if it was to have been sold.

But for whatever reason, the Council failed to choose them.

Because of the process used to dispose of the asset, we can't even tell whether other Registered Social Landlords were properly considered.

We can't tell whether the selection of the buyer was weighted in favour of price at the expense of social considerations. We can't tell what sort of scoring was used to assess competing bids. We can't even tell if there was any form of advertisement - or even whether there *were* any competing bids.

So it could turn out that someone has - in effect, said - sod the social implications, let's see how much we can get for it at a market rate.

And on that basis (assuming that existing tenants remain protected as we would expect them to be - and then at least for a decent period) if the brakes of social housing have been taken off future development of the site - we could, for example, see the nice green leafy area at the front of the site become 'market value' housing in the future.

But then again, it could be that the right decision has been made.

They might have chosen the right organisation to sell to, for the right reasons, and it will all work out better.

But when that decision is hidden from public view, and is not transparently made, it isn't possible for the voting public to come to a view about it, and we argue that is their right, and that is the Council's responsibility.

SO WHAT HAPPENS NOW?
With such secrecy involved, even we haven't had access to the sort of information we can usually get. This matter has been kept very tightly under wraps and, for a while, we had been wondering how to approach the story for our readers.

They will have seen a couple of letters to the paper that were critical of the sale, and a couple more that said the new owners were fine and it was all 'motherhood and apple pie' - and whatever was anyone thinking about to write such critical letters.

But now the answer as to how to approach the issue has arrived.

A brave man called John Ingham has set up a public meeting next Saturday 19th February at 2pm at Lytham Cricket Club and is calling for the community to support him.

We will be there, and we hope a lot of our readers will be able to attend as well.

We've reproduced his letter below. As you'll see, you're invited.

"Dear All

We have all received letters this week inviting us to a meeting at Lowther Gardens on February 23rd where we will be notified of the future arrangements that will be enforced upon us once our homes have been sold to developers.

This came as a great shock to me as I know it did to many other Melton Grove Residents. Apparently we had been invited to comment "sometime ago" and I have now found and read with more care a letter dated December 2009 which I thought at the time was only to notify us that there would be surveyors visiting the estate. In very small print after a long and drawn out explanation of the cost of running the estate it does mention, once, the words "new owners". This hardly constitutes, I quote, "inviting comments on the Board of Clifton Housing Associations intention to offer Melton Grove for sale"

After taking advice I believe that not one of us individually will have a hope of safeguarding our estate against development and the loss of our homes but as a collective we have a good chance of stopping our homes being sold.

I believe the way forward is to come together and form a constituted Residents Association not only for the 30 existing residents but for all those who do not want to see one of Lytham towns best assets lost forever.

We need to act quickly so I invite you all to a meeting to form this Association on Saturday 19th February (a week today) at 2pm at Lytham Cricket Club and ask you to bring along family, friends and anyone you know who wants to save Melton Grove for us who are resident now and all those who will benefit, as we do now, in the years to come.

If you have problems getting to the Cricket Club next Saturday please contact me this week and between us all we can make sure every resident is included.

Until then my daughters will be contacting our Councillors and the papers, civic society and the Defend Lytham Group. If you know anyone who may be able to help please invite them along on Saturday.

Its time for us all to act as one.
Yours Sincerely
John Ingham
12 Melton Grove"


And that letter might be the end of this article - except for one little thing.

Of the six Councillors who own the shares, five are Conservatives, and one (Cllr Louis Rigby) is Independent. The five might be expected to toe the party line (otherwise they risk being thrown out, as Saint Barbara Pagett was when she voted with her conscience against the introduction of the dreadful Cabinet system).

But the sixth might be a different case.

We know Cllr Rigby to be someone who works from practicality and common sense, and someone who is concerned about his fellow man. His time as Mayor admirably demonstrated that, and we would be surprised if he had willingly put the future of social housing at Melton Grove at risk.

He is not given to being led by the nose, so we wonder whether he has yet signed up to this move, and whether he has agreed to transfer his share to a new owner, and / or whether he has agreed to the winding up of the existing company.

If he has not yet done so, we suspect he could be holding a single share that is worth a great deal more weight than it appears to hold.

We think there's a lot more to come out on this matter.

Dated:   13 February 2011


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