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Melton Grove: The Ombudsman Reports

Melton Grove: The Ombudsman ReportsIn May 2013 we published 'It Ain't Over Yet'. It summarised our view at that time of the Council's decisions and its handling of the disposal of the Clifton (Lytham) Housing Association.

We said the problem at Fylde was institutional, not procedural.

It was, and it remains, our view, that the scandal of Fylde's dealing with Melton Grove was not caused by a failure of procedure.

In most instances proper procedures were in place.

It was caused by the wilful disregard and mis-interpretation of those procedures. It was caused by the beliefs, attitudes and values of those people at Fylde who were involved; those who thought the procedures should not apply to them.

With the exception of one man - Freckleton's Cllr Louis Rigby, who we dubbed 'St Louis the Magnificent' for his courageous, independent, and highly principled stand in refusing to agree to something he simply knew to be wrong - all of those involved in at Fylde have cause to hang their heads in shame.

That's because they know, and we know, and the public of Fylde know, that what was done here was probably the most shameful thing this Council has ever done.

They took what was essentially operating as a worthy and charitable organisation for local people of meagre means, and asset-stripped it for cash to give to Lytham Hall.

If that is not a disgrace, we don't know what it is.

In our 2013 article, we also said the Local Government Ombudsman was asking questions about the matter and, although our own experience of the LGO was that they did not usually do what we believe most people hoped and expected of them, they were taking a long time with their questions, which suggested they were at least taking a thorough look.

The length of time they took (almost a year) suggests they found a lot of issues that merited investigation, and that's probably the case.

Their final report into this matter was published about a week ago, but its reporting was prohibited by an embargo until today.  So the organisations and individuals involved have had a week or so to prepare their responses to the Ombudsman's report.

Needless to say, the two responses do not see things in the same way.

The best perception of what the Ombudsman actually said will come from reading the Ombudsman's full report.

Our readers can follow this link to download a copy of the report, and we would urge you do this before reading this article further, that way, no-one's spin (including our own) will prejudice the view to which you might come.

We're going to present three different takes on the Ombudsman's report.

First we will present the perspective of those who complained to the Ombudsman about Fylde's behaviour in this matter, next we will present the Council's official response to the report, and finally we will give our own take of the situation.


The response from Emma Duffy on behalf of Melton Grove Residents Association says:

"The Ombudsman has now confirmed that Fylde Borough Council were at fault through maladministration and service failure when they sold Melton Grove to a property developer instead of a Registered Social Landlord.

Despite all the platitudes and promises the Council made that residents would see no change but ownership, and would be protected in perpetuity, no worthwhile safeguards were put in place, and any that were are so vague they are unenforceable.

This has left Melton Grove, once an idyllic town asset, available to all local residents of limited means, under constant threat of development and
extortionate rent increases, with the resident having paid up to £5000 more than they would have under a Registered Social Landlord.

Many tenants have now left the homes in which they thought they would see out their days, and others struggling to afford to keep their homes.

Fylde Borough Council Officers and Cabinet drove through the sale against huge public outcry and refused to consult in any meaningful way with or listen to the public.

Whatever spin the Council puts on the Ombudsmans report it is clear they were wrong and negligent in doing so and the Ombudsman agrees."


Fylde's Press Release - issued by their very competent Press Officer, Neil Graham - says:

"COUNCIL WELCOMES SHARE-SALE REPORT

Fylde Council is welcoming the publication of the Local Government Ombudsman’s report into the sale of Clifton Lytham Housing Association shares.

The investigation concluded that the Board responsible for the sale of the shares in 2011 had failed to fully consult the residents – but acquitted
the Board of any impropriety that could have influenced the sale or adversely affected residents.

The Council has accepted the findings of the Ombudsman report and will implement the recommendations made.

The Ombudsman considered 12 specific complaints against the Board, 11 of which were unfounded or not relevant. The Ombudsman concluded, however,
that there was inadequate consultation with residents and that the Clifton Lytham Housing Association board of directors did not properly tell the residents about the progress of the sale. The lack of adequate consultation was considered by the Ombudsman to be an injustice to residents.

Councillor David Eaves, Leader of the Council, said: “This has been a very thorough investigation and one that councillors and officers welcome as the final chapter in the sale of the Clifton Lytham Housing Association shares.

“What is most important is that the Clifton Lytham Association have had all the matters thoroughly investigated and can now draw a line under the issue. The report is very clear: rents have not risen above affordable levels; there was no conflict of interest at any point and that the Board complied with the law at all times.

“We know that this has been a distressing episode for some residents and we accept that there was not sufficient consultation by the Board on the sale of the shares. The Council will take on board the recommendations of the Ombudsman to allow the residents closure on this matter.

“The report states that the insufficient consultation is unlikely to have affected the final outcome of the sale. We hope that the complainant and the people she represented can be assured that no detriment has been caused to them.”

The Ombudsman’s report will be published on the Council’s website www.fylde.gov.uk and available for public inspection for three weeks from Monday 18 August at the Town Hall reception in St Annes.

The Ombudsman recommends that the council should remedy the injustice to residents caused by the Board’s lack of consultation by apologising to the residents and paying each of them £100 in “recognition of the lost opportunity for consultation on the future of their housing” and £100 each “for the confusion caused by the lack of consultation about their housing”.

The Council will be informing the Ombudsman that it supports the recommendations."


So what should we make of these differing responses?

Is it just a difference in tone? Or is there still a gulf between the Council and those dissatisfied with what it has done.

Our own take is that the tone and tenor of Fylde's statement seems almost relieved that they have, or appear to have, escaped so lightly with what they seem to think is a pretty mild censure and a very mild requirement to recompense.

Even so, the statement they have issued attempts to trivialise the wrong that they have caused, and to detach them from it - e.g. "The lack of adequate consultation was considered by the Ombudsman to be an injustice to residents."

This phrasing (intentionally) leaves the reader with the sub-conscious perception that the Council still do not consider it to be an injustice themselves.

Elsewhere, Cllr Eaves welcomes the report, but we note he only welcomes it "as the final chapter" - as what he hopes will be the end of the matter.

As our readers who are used to reading between Fylde's lines will realise, this is actually what they believe.

What Fylde is doing here is *accepting* the Ombudsman's finding in a very detached way. They are not agreeing with it.

There is one fundamental word still missing from the spin of this statement - and that is 'sorry'

Even the apology recommended by the Ombudsman where Fylde should "apologize to each resident for failing to consult them properly on disposing of their housing to the developer" has the apology couched as an action "recommended" by the Ombudsman. It is not an actual apology by Fylde to the wronged residents.

They may yet apologise in the letters they send to residents. That, of course would avoid the need for a public apology and for an apology to the electorate whose asset was stripped by untrustworthy councillors.

We think the word 'sorry' is probably missing because of the corrupting arrogance of almost absolute power exercised by those few same members who caused the problem in the first place.

These people are mostly still in place and are now simply 'accepting' the Ombudsman's findings.

What this shows is that, as yet, nothing has changed.

As we said at the start, we believe the scandal was caused by the wilful disregard of procedures, not the procedures themselves. It was caused by the beliefs, attitudes and values of those people at Fylde who were involved, by those who thought the procedures should not apply to them.

It seems to us from the tone of Fylde's statement this is still the case, and it will take the election next May for the public - who we believe are as disgusted as we are with this shameful episode in Fylde's history - to effect a change, and to remove these people from office.

Cllr David Eaves, the individual who proposed the explicit linking of a payment of £300,000 to Lytham Hall as part of the decision to dispose of Melton Grove thinks they can now draw a line under the issue, and that the Ombudsman's report is the 'final chapter' in this matter.

We're not so sure. But we'll have to wait and see.

So if that's what we think of Fylde's response, what should we make of the Ombudsman's efforts and findings in this matter?

We are critical.

Although the Ombudsman found Fylde to be at fault because of maladministration and service failure, and Fylde's fault had caused injustice, they only found fault on those aspects of the case that could easily be remedied.

We suspect that, because the sale had been completed, and legally binding contracts exchanged, they would have been unable to unpick the contract, so they could not offer a sensible remedy were they to find maladministration on the issues of substance.

In any event, they did not.

So our opinion of the Ombudsman has not changed.

We remain unimpressed with their ability to deliver what we would describe as common-law justice.

Thankfully, the court of public opinion is not bound by such constraints.

Everyone in Fylde knows the founding principle was that this was housing made available to worthy and elderly local people at well below market value rents.

They also know that elements within Fylde Council deliberately set about dismantling the founding principles on which Melton Grove rested.

We consider what we have seen here to be some of the worst civic behaviour by individual officers and members that you could imagine. Behaviour that culminated in an unholy rush to conclude the sale - before a Council meeting called to debate the disposal - could even be held.

So what lessons may we learn?

The first, and most obvious, is to be careful who you vote for.

We urge our readers to give their vote thoughtfully on the basis of the beliefs, attitudes and values of each candidate, not simply the political party to which they belong.

The block vote of those in political parties - membership of which requires adherence to decisions made in party group meetings outside the Council Chamber - corrupts the principle of individual representation in those we elect

Secondly, based on what both Fylde and the Ombudsman has said, we can see no room or justification for any Council to place any of its members (or officers for that matter) on a body that prevents them from acting in the interests of the Council rather than the body to which they have been nominated.

The essence of the justification not to find fault on the substance of the complaint is that neither Fylde nor the Ombudsman appear to believe that the Board of Directors was beholden to the Council that appointed them to that position.

They go further and believe that once appointed, it was perfectly proper for those Councillors to change the purpose for which they were selected and appointed; to change the way they operated; and to remove those who tried to prevent this process.

Whilst that may be right in Company Law (and we take no issue with that), it is fundamentally at odds with their civic responsibility as Councillors - especially when the company's headed paper said "The Clifton Lytham Housing Association Limited is a company controlled by Fylde Borough Council"

We therefore have a fundamental disagreement with this central tenet of both Fylde and the Ombudsman's judgement in this matter.

The whole point of the Clifton (Lytham) Housing Association company being populated by Councillor Directors was to place decisions into the hands of publicly elected and publicly accountable representatives. The Council's directors should not have sought to circumvent this. It may be correct in Company Law, but the company was controlled and appointed by the full council. Usurping this power was, we believe, outside the permitted actions of the Directors *as councillors who were appointed by the Council*

If this had not been the case, why did the full Council have the right and responsibility to both appoint and remove the directors?

Fylde's constitution requires its members to follow both the law *and* the constitution of the council - In this matter we believe they acted outside their constitutional powers by not seeking the authority of the Council to make the change. They were Councillor Directors, not plain vanilla Directors. There were no plain vanilla Directors. They were all councillors.

What this sorry state of affairs shows us in that it is possible (and it may even be a requirement under Company Law) that councillors should disregard their public responsibility as a councillor and act solely in the interests of the company, even where that company is 'controlled by the council' and where the Company has asked Fylde to appoint one or more councillors as its directors.

We find that patently, and self evidently, nonsense.

If that is to be the case (and it flies in the face of all that we hold to be important about democracy), then we believe a company who want a councillor as a wonderful asset on their board, should make a direct approach to the individual, and not approach the Council to appoint or select one of their number.

In our view there can be only one justifiable reason for a council to appoint a councillor to any Board of Directors and that is where the Councillor on that board is there to REPRESENT THE PERSPECTIVE AND INTERESTS OF THE COUNCIL.

To do otherwise negates their position and responsibility as a councillor, and plain common sense dictates that they should not be perceived as being a councillor when in that role if they are not acting on behalf of the Council.

We cannot see anyone on the Clapham Omnibus who might see this in any other way.

So we would urge Fylde to review its approach to appointments to outside bodies, especially where the appointment is that of a Director of a company, and to examine all instances where a member or an officer may not be able to represent the perspective of the Council in votes that are taken, and to remove such representation from the ambit of the Council.


We don't know if this is the end of the matter or not. We can see one further route that might be pursued.

Certainly Fylde Cabinet's actions in this matter will go down in history - along with the closure of the Pools - as being part of a dark age for democracy in Fylde, and that means it will haunt the individuals involved as long as they are Councillors.

And we believe that is rightly so.

Dated:   14 Aug 2014


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