Peterborough City Council (18 015 948)

Category : Adult care services > Disabled facilities grants

Decision : Not upheld

Decision date : 10 Sep 2019

The Ombudsman's final decision:

Summary: Ms X complained about the way the Council dealt with a contractor she used to carry out works under a Disabled Facilities Grant (DFG). She also complained that the Council failed to monitor the progress and quality of the works properly. The work the Council funded was part of a larger project Ms X funded privately. The Council was not at fault in relation to the DFG. I have discontinued my investigation into part of the complaint as it concerns building control and the Ombudsman could not achieve the outcome Ms X is looking for.

The complaint

  1. Ms X complained that in connection with works under a Disabled Facilities Grant, the Council:
      1. failed to carry out adequate checks under its approval process on the contractor she used, after leading her to believe it would do so;
      2. told her she had to pay the contractor for the privately funded part of the works before the Council would pay any sums under the Grant; and
      3. made a large interim payment to the contractor without carrying out adequate checks to ensure the works were carried out to a satisfactory standard; and
      4. failed to monitor the progress and quality of the works properly.
  2. As a result she says the contractor took the money from the Council and abandoned the project, leaving it unfinished. She says she has been unable to return to her house as it is uninhabitable, and she and her disabled children are having to stay with friends in overcrowded conditions

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The Ombudsman’s role and powers

  1. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
  2. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)
  3. We can decide whether to start or discontinue an investigation into a complaint or part of a complaint within our jurisdiction. (Local Government Act 1974, sections 24A(6) and 34B(8), as amended) For example We may decide not to start or continue with an investigation if we believe:
  • it is unlikely further investigation will lead to a different outcome, or
  • we cannot achieve the outcome someone wants.

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How I considered this complaint

  1. I discussed the complaint with Ms X and considered the information she provided. I considered the information the Council provided in response to my enquiries. I considered relevant law, guidance and policy on Disabled Facilities Grants and building control. I shared my draft decision with the Council and Ms X and considered their responses.

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What I found

  1. A Disabled Facilities Grant (DFG) is for people with a qualifying disability who need adaptations to help them remain in their home. An occupational therapist (OT) carries out the needs assessment. The Council also carries out a means test of the disabled person to work out how much it can award. DFGs are mandatory if the applicant meets the qualifying conditions. The maximum amount of a mandatory grant is £30,000.
  2. The Council has a Care and Repair Home Improvement Agency which provides help to applicants in making an application for a DFG. It also provides a surveyor whose role includes assessing the suitability of the adaptations, managing the contract for the grant-funded works and overseeing the contractors, and visiting to ensure the work is completed and the contractors are paid. The Council charges a fee for this work, usually at the rate of 15% of the grant awarded.
  3. The Council’s ‘Housing Renewal Policy’ says:
    • Unless the Council agrees otherwise, a DFG applicant must provide at least three estimates from different contractors for the cost of the work to be funded under the grant.
    • The Council will pay the DFG direct to the contractor. It may make the whole payment after the work is completed, or pay in instalments. If the Council pays any of the grant before the work is finished it must not pay a total of more than 90% of the amount awarded under the DFG.

Building control

  1. Most building work, whether new work, alterations or extensions, requires Building Regulation approval. The Regulations set standards for the design and construction of buildings to ensure health and safety for people in and about those buildings. Approved documents give examples of how the Regulations can be met but these examples do not have to be followed.
  2. The primary responsibility for building work rests with those who commission and those who carry out the work. When carrying out their functions, local authorities will visit at various stages but they will not be present for the great majority of the project and do not act as a 'clerk of works' or project manager. On request, and when satisfied after taking 'all reasonable steps' that the Regulations have been met, they must issue a completion certificate. This not a guarantee that all works have been done to the required standard.
  3. The case of Murphy v Brentwood District Council [1991] was an appeal to the House of Lords. It established that a council is not liable for the ‘pure economic loss’ of the cost of putting right defective building work resulting from its failure to ensure compliance with building regulations.

What happened

  1. Ms X is a single parent with three autistic children. She owns a house but she found it was not suitable or large enough to meet her family’s needs. In 2016 she decided to build an extension to the property to provide an extra bedroom and second bathroom on the first floor and an extended kitchen/living area on the ground floor. Ms X found a building contractor (‘Contractor C’) who recommended an architect, who produced drawings for her.
  2. As part of discussions with Ms X about her housing options, the Council suggested she apply for a DFG to fund part of the work. An assessment by the OT identified a need for a ground floor bedroom for her daughter. There was an initial visit by the Housing Programmes Manager, Officer B, and the OT to look at the feasibility of the works to be funded under the DFG in early February 2016. The Council records say that at this visit Ms X gave Officer B a copy of the plans for the two-storey extension and Officer B explained that the DFG would only provide funding for an extra bedroom, in line with the need the OT had identified.
  3. After a further visit by Officer B and a surveyor from the Council’s Care & Repair team (‘the C&R Surveyor’) to check the feasibility of the works, the Council made a referral to Care and Repair in June 2016 for a DFG for a ground floor extension for a bedroom.
  4. The Council says Ms X contacted Officer B on 24 June 2016 about the proposed works. It says Ms X explained she already had a quote from Contractor C. The Council says Officer B advised her the Council would only provide funding for the bedroom and would normally ask for three quotes from Care and Repair’s selected contractors and then choose the cheapest. It says the officer advised Ms X to get more quotes for the privately funded part of the works herself so she could compare costs.
  5. The Council does not have a record of the conversation but has provided a copy of an email Officer B sent the C&R Surveyor afterwards with Ms X’s “private plans” attached. The email says:

“[Ms X] is asking whether it is feasible to have the 2-storey extension and I said we will only be paying for the formation of a bedroom so she would have to fund the excess costs. She has a quote from a contractor (not one of ours)…She probably needs to have an estimate of what we would be funding under DFG to find out from the bank how much she can borrow. She said she had agreement in principle and I’m assuming that is based on the quote she already has.”

  1. Ms X says she asked Officer B if she could use her own builder or if she would need to use one of the Council’s approved contractors. She says the Council told her she would need to provide two or three quotes and the Council would choose the cheapest. She says she submitted two quotes and the Council chose Contractor C. She says Officer B told her the Council would need to go through the process of approving the Contractor, which she says it did.
  2. In early August 2016 the C&R Surveyor visited Ms X again and completed the DFG application form with her. In the description of the works on the form it says ‘‘Funding towards extension (client arranging works)”. The Council’s notes of the meeting say the C&R Surveyor “inform[ed] client on the process and the basis of how we would determine the level of grant funding the council could offer (we would base it on the cost of a comparable bedroom extension”.
  3. The Council received a quote from Contractor C on 12 August 2016. It says it has no record of receiving any other quotes. The Council put the company through its ‘supplier approval process’ and added Contractor C it to its supplier list.
  4. The Council approved the quote from Contractor C by comparing it to a quote for a similar scheme of work on another property by another contractor. It also visited another building project Contractor C was working on and observed it from the outside.
  5. At the end of August 2016 the Council wrote to Ms X confirming it had approved the DFG. It awarded her the maximum mandatory award of £30,000, including the Care and Repair fees. The Council applied a reduced fee to take account of the work Ms X had already done in supplying contractor details, drawings and a schedule of works. Also it was only overseeing the work to the bedroom. The cost of the work was a little over the £30,000 maximum and the Council asked Ms X to pay a contribution of £22. The letter set out the conditions for the grant approval including that:
    • the Council would make payments for the works direct to the builders;
    • where the Council agreed to make an ‘interim payment’ she would have to pay her contribution first before it would pay the builder.
  6. Ms X had her own separate contract with Contractor C for over £70,000 for the total cost of the work. She would be funding £30,000 of the total through the DFG. Her contract with the builder included phased payments as each part of the work was completed. She was to make the payments within seven days of the date of the invoice. The contract included other clauses relating to the standard of work and compliance with Building Regulations.
  7. In September 2016 the Council issued a full Plans Building Approval Notice for the whole of the works.
  8. Work started on Ms X’s property at the end of September 2016. A building control inspection took place on 19 October 2016 to look at the foundations.
  9. Shortly after the work started Ms X discovered there had been a mistake in the architect’s measurements which meant there was not enough space on the site for the design drawn. The drawings had to be revised. Ms X says Contractor C took this up with the architect’s insurers and continued to work on the extension using the new drawings.
  10. Ms X says she contacted the Council to explain the problem but says she did not receive a response to her call. So she says she left it in the hands of the builder as she believed the Council was overseeing the work through Care and Repair. She says a few weeks later she contacted the Council to ask if the Council could pay its part of the grant to the builder before she paid her contribution so that she could monitor the works and pay him as items were completed. She says the Council told her this would not be possible and she would have to pay all of her contribution first before the Council paid the builder direct. Ms X continued to pay the builder in instalments.
  11. In January 2017 the C&R Surveyor carried out a site visit and noted that the works was progressing on the first floor brickwork.
  12. There was another Building Control inspection in early March 2017. The note of the visit says there had been changes to the steel work on site. It said “Builder to supply full structural calculations and detail for the new design.” The Council says it did not receive these details.
  13. The C&R Surveyor carried out an ‘interim inspection’ on 13 March 2017. He noted that works were “progressing on the roof and should be complete in the next week or so”.
  14. Around the same time Contractor C invoiced the Council for £24,000 and asked for an interim payment. He confirmed that Ms X had paid her contribution of £22.
  15. The C&R Surveyor carried out a site visit. He noted:

“external construction works to bedroom complete excluding doors and windows – okay to pay interim invoice. Value of works to date far exceeds [the Council’s] payment request.”

  1. The Council then paid Contractor C the £24,000 in March 2017.
  2. Ms X did not know the Council had made the payment at this time. But she said over the previous few months the Contractor had told her the architect’s insurers would not deal with him as their contract was with her. She said she noticed the builder’s behaviour changed and his work started slowing down. Her family’s health started to deteriorate and she says she became very stressed. She engaged a solicitor to deal with the claim against the architect. She moved out of the house with her children and went to stay with a friend, hoping this would be a short-term arrangement. Ms X says when she left the house she had made all her payments to the builder and the roof was underway. However she says there was no plumbing in the house, and no kitchen, and there were no doors or windows fitted to the extension. She raised concerns about the credentials of the gas and electric fitters Contractor C was using.
  3. At the end of May 2017 another Building Control inspection took place to look at the roof.
  4. In late July 2017 following a site visit, the Contractor wrote to the C&R Surveyor saying there had been problems with the works. He referred to the architect’s mistake in the layout dimensions. He said as a result of this and extra requests by Ms X, he had had to do more work than he had quoted for. But he said he would continue to work on the project under his contractual arrangement with Ms X until he had completed the work.
  5. In July 2017 the Contractor left the site, abandoning the work, and did not return to complete it.
  6. The C&R Surveyor, his manager and Officer B met the builder on site in early August 2017. The C&R Surveyor and Officer B then carried out a site visit with Ms X on 10 August. The Council’s notes of the visit say Ms X did not raise any concerns about the construction but was worried about the unfinished gas and electrical installation. It said the officers “confirmed that checks and commissioning could be done as part of the final works to finish the bedroom”.
  7. Ms X says she heard no more for several weeks and wrote to the Council asking for help so she could return home with her children.
  8. On 17 October 2017 the Council wrote to Ms X and to the Contractor along similar lines. The Council said it understood work had ceased because of a dispute between Ms X and Contractor C over financial matters and pending an insurance claim against the architect. It said since the last meeting with Ms X it had met the builder separately. It had also obtained legal advice about the Council’s powers to enforce the contract against Contractor C. But it said the contract for both the privately funded and grant funded work was between Ms X and Contractor C and the Council could not intervene in a dispute between them. The Council advised Ms X to seek advice about dispute resolution. The Council said it was “extremely concerned” that the bedroom was not yet finished and could not be used because of unfinished private work which was making the house uninhabitable.
  9. The Council said Ms X needed to ensure the bedroom and associated private works were completed as soon as possible so that the bedroom could be used. It said until then it would not make any further DFG payments and it would not offer any extra funding for the private works. The Council asked Ms X to provide an update on the dispute with Contractor C and on the insurance claim.
  10. Ms X replied a few days later, as follows.
    • She agreed that the grant was part of a bigger privately funded extension and that she “did indeed choose [Contractor C]” to carry out the work. But she said the Council approved the Contractor.
    • She said when the work started she asked the Council if she could pay the last £30,000 so she could oversee the work as it progressed and she could release payments when each stage was completed. She said “the Council stated I had to pay all of my contribution before the council would pay any of the grant to [Contractor C]”
    • She said the Council paid the £24,000 when the builder asked for it “without any checks”. She argued he was not due this money as she had already paid him £55,000. So “he wasn’t in need of any more payments until he had at least put the windows in”.
    • She said the Contractor then became less interested in completing the work and left the site in July leaving the house with no windows, bathroom, safe electrics or heating and with other problems. This left her and her three disabled children homeless.
    • Ms X did not agree with the Council’s reasons for saying the house was uninhabitable. She said it was because it had no windows and doors and the Contractor had used unqualified people to work on the gas and electric installations.
    • She asked the Council to pay the remaining £3,000 from the DFG to another contractor who could put the windows in.
    • She updated the Council on legal action against the architect and Contractor C.
  11. The Council replied at the end of October 2017.
    • It explained that the only checks it carried out on Contractor C’s company was a check financial probity in order to place it on the Council’s financial system. It had also looked at previous examples of the Contractor’s work and this had not raised any concerns.
    • It said where a grant applicant has privately funded works going on as well, Council policy is that the privately funded payments should be made before the grant payments “to ensure when the Council comes off site the eligible works are completed to the Council’s satisfaction and the adaptation can be used”. It said any money she paid to the Contractor for works outside the DFG funded work was entirely a private matter.
    • It confirmed that when the C&R Surveyor visited in March 2017 to inspect the bedroom he was satisfied there had been enough progress made to make an interim payment. This was despite the fact the room had no window, door or heating. The Council retained the rest of the grant money “for completion of the bedroom and associated heating and electrical works to the bedroom only”.
    • It repeated its view that even when the bedroom was finished the family would not be able to use it as the rest of house uninhabitable because it had no kitchen, bathroom or heating.
    • The Council confirmed that “under these extraordinary circumstances” it would consider funding the outstanding works to the bedroom only, using a Council appointed contractor. It set out the extra works needed.
  12. In early December 2017 Ms X replied confirming she was happy for the Council to appoint a contractor to complete the bedroom
  13. Ms X continued to pursue her legal claims through her solicitor. She was also in correspondence with another contractor about the possibility of completing the works. In March 2018 she told the Council she would be getting an independent report on the work done, as she had received advice that it may not comply with Building Regulations.
  14. In mid-March 2018 Ms X’s solicitor sent the Council an outline of the preliminary findings of the independent survey but the full report was not yet available.
  15. At the end of April 2018 Ms X wrote to Officer B to ask about the checks the Council had carried out on Contractor C. The Council explained the checks it carries out to allow it to add companies to its internal finance system so it can pay them. It explained that normally it uses suppliers on its list that have been through the same process and also have “a proven track record in terms of quality and price” as the Council will have used them before. In this case it said she already had a contractor identified for the “extensive privately funded works” she was planning. So the Council agreed to her request to put this contractor through the same system so she could use the same one for the DFG funded works.
  16. In further correspondence Ms X asked for further details of the checks as she said she had found out Contractor C had employed a convicted offender to work on the house. Also she said the company had dissolved shortly before starting the work. The Council confirmed that it checks Companies House registration, VAT and bank details. It gave the date when according to Companies House Contractor C’s company had dissolved. This date was after the builder had started the work on Ms X’s property.
  17. In July 2018 Ms X told the Council the independent survey was now complete. She asked about next steps for obtaining the funding to finish the bedroom.
  18. On 18 July 2018 Ms X made a formal complaint to the Council that:
    • her family was homeless “due to the council paying the builder £24,000 before any money was due to him”
    • there had been inadequate checks on his firm or individuals working for him.
  19. Ms X also approached her MP who contacted the Council on her behalf. In further correspondence Ms X asked why the checks on Contractor C had not shown one of his workers was a convicted offender. She said she had paid for various materials and wanted to know why the work to install the kitchen and bathroom had not been done.
  20. The Council replied to Ms X at the end of August 2018. It noted that her social worker and the C&R Surveyor understood from a visit to her that the outstanding works were the gas and electrics, and the bathroom and kitchen she paid for and project managed herself. The Council said the bedroom funded under the DFG was now complete. It said it was aware of the pending claims against the builder and architect. It was waiting for a copy of the independent survey report before any further progress could be made. The Council said it did not ‘approve’ Contractor C. Rather he was Ms X’s existing contractor, but it had authorised him for payment through the Council’s finance system.
  21. The independent chartered surveyor produced the report on his inspection In December 2018. Ms X sent the Council a copy in January 2019. The solicitor had asked the surveyor to assess the effect of the architect’s error and whether this resulted in extra costs. He was also asked to inspect the work by Contractor C and assess the likely cost of any remedial work needed. The surveyor’s key findings were as follows.
    • Contractor C had not constructed the building in accordance with the revised plans. There was nothing to confirm the Council’s planning or building control services had approved the revised plans.
    • There was poor quality workmanship in a range of areas including the foundations, roof construction, and brickwork. There were no revised calculations. He recommended gas and electrical inspections.
    • The architect’s error did result in extra costs as remedial work was necessary.
    • To ensure compliance with the revised plans his view was the extension would need to be demolished and rebuilt.
    • But even if the builder had complied with the plans, the poor quality of the work meant there would still need to be major works.
  22. The Council wrote to Ms X in response to the report.
    • It noted that the whole report was based on a comparison between what was built and the revised drawings. But it said it had never received the revised drawings and only had the originals. So it said it could not comment on compliance with the revised plans.
    • It responded to each item raised as it affected building control. In some cases it said building control officers were waiting for revised calculations but there was no record of receiving them. It found some matters acceptable and others not relevant to building control. Others had occurred after the last building control visit and would come up at completion stage.
    • It set out the history of Care and Repair involvement said they were not project managing the rest of the works.
    • It asked Ms X to provide copies of the revised plans and structural calculations requested in March 2017. It said she should then contact building control to ask for an inspection and it would comment further once this was done.
  23. In March 2018 Ms X’s solicitor provided the Council with copies of the revised plans and calculations.
  24. The Council carried out a further building control inspection. It then wrote to Ms X setting out the issues she needed to address before she could continue with the work on the property. It identified a number of potential problems with the works to date and recommended Ms X commission a structural engineers assessment. In some areas there was still work outstanding or she had not provided evidence that it had taken place. The Council did not agree that the independent survey report concluded the structure built was unsafe.
  25. The Council also disagreed that the building control inspections had been inadequate. It said it was not the Council’s responsibility to project manage the build. However given her situation it offered to carry out further inspections when invited, free of charge.

Analysis

Complaint a) failure to carry out adequate checks on the Contractor

  1. Ms X says when the Council told her it would carry out checks on Contractor C it led her to believe this would be in order to approve the builder and add him to its list of approved contractors. As her complaint is that the Contractor was unreliable, produced poor quality work, abandoned the project and employed a convicted offender on site, I understand that she believed the approval process concerned verifying the reliability and quality of the contractor. This is not the case. The Council has explained it carries out financial probity checks so it can make payments through its system. It has provided details of the checking process. It is clear from this that the process is limited to financial checks. Ms X has complained that the company went into liquidation before Contractor C started the work on her property, but this is not the case. The dates show it happened after he started the work. When the Council carried out the checks the business was still running.
  2. Ms X may have misunderstood the position but I have no evidence that the Council actively misled her. There are no records of the discussions between the Council and Ms X about the issue of the checks the Council would carry out. However the Council has consistently explained the nature of the checks and this is in line with the details of the process it has provided. I have no reason to think it would have told Ms X otherwise.
  3. Ms X was already intending to use Contractor C for the building works before she applied for the DFG. She says herself he “seemed to have vast experience”. The Council’s financial checks were no guarantee of his reliability, standard of workmanship or the people he employed. The Council’s policy is to ask for quotes from three contractors and choose one. The Council says it has no record of receiving a quote from any other company. Ms X says she sent two other quotes to the Council. She has provided a copy of one she received in June 2016 although I do not have evidence of her sending it to the Council. Even if she did, the evidence indicates the Council did not receive it. If it had it would have been able to make a direct comparison with the other firm. It would not have based its decision to use Contractor C on a comparison with another similar project by another company and a viewing of the Contractor’s work on another site. Also, receiving other quotes from Ms X would not have made a difference as she says Contractor C was the cheapest. So the Council would have chosen him in any event.
  4. Based on the evidence I have seen I do not find that the Council was at fault in failing to carry out adequate checks on the Contractor before accepting him to carry out the work.

Complaint b) telling Ms X she had to pay the Contractor for the privately funded part of the works before the Council would pay any sums under the Grant; and

c) making a large interim payment to the Contractor without carrying out adequate checks to ensure the works were carried out to a satisfactory standard

  1. The Council provided funding under the DFG to create a bedroom. This was only part of the overall cost of the project as a whole. Ms X had her own separate contract with Contractor C for the works. The Council’s responsibilities under the DFG and Care and Repair related to the works to construct the bedroom only. Care and Repair had no role in project managing the rest of the work.
  2. The Council’s policy is that where it agrees to make an interim payment to a builder who is carrying out grant funded works, the owner has to pay their contribution first. In this case Ms X’s contribution was around £20. She says she had paid him around £55,000 when the Council made the interim payment. But it was Ms X’s own contract with the builder that required her to pay him for the work he did as he completed each stage.
  3. The Council has also explained that in cases where the overall cost of the works is much greater than the funding provided through the DFG, it is normal practice to require applicants to make their payments first before the Council pays the grant to the contractor. It then keeps back a portion of the grant and pays it on completion. This is to ensure the work is completed and the Council does not put public money into a project and then find the building cannot be used. I do not find fault with this approach.
  4. Ms X complains that Care and Repair failed to inspect the work before making the interim payment of £24,000. However the records show this is not the case. The Council inspected the bedroom works before making the interim payment. The Council considered the matter and decided that even though the work was not fully complete, it was enough to make an interim payment. It retained a percentage to be paid when the Contractor completed the work to the bedroom. It is entitled to make this decision under its policy.
  5. Based on the evidence I have seen I, do not consider the Council was at fault in doing so. But even if it was, in my view the Council has taken suitable action to put this right by offering to pay for the rest of works to complete the bedroom using another contractor from its list. I understand that Ms X has not yet taken up this offer.

Complaint d) failure to monitor the progress and quality of the works properly.

  1. This part of the complaint is about building control. The Ombudsman’s role in such complaints is very limited because the main responsibility for any building work carried out lies with the person who commissions it, Ms X, and the people who do the work, Contractor C. We rarely investigate such complaints. I could potentially investigate a complaint about failure to attend a site for a building control inspection when invited. But although Ms X has mentioned this, I have not seen the relevant evidence.
  2. Ms X’s main concern is that in her view the inspections failed to identify defects in the building work. Even if it were possible to investigate this issue, the Ombudsman could not achieve the remedy Ms X is looking because of the court ruling referred to in paragraph 12 above. Even if there was any failure on the part of the Council to properly inspect the works to ensure compliance with Building Regulations, the Council would not be liable for the cost of putting right any defective building work. I have therefore discontinued this part of my investigation.

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Final decision

  1. I recognise that Ms X and her family have been through and continue to experience extremely difficult and distressing circumstances. The problems with the building works have resulted in her having to leave her home and stay in overcrowded accommodation. This has affected her mental health and that of her children. However I could not conclude on the basis of the evidence I have seen that this is the result of fault by the Council in the way it handled the DFG.
  2. I have found that the Council was not at fault in the parts of the complaint relating to the DFG. I have discontinued my investigation into the part of the complaint about building control inspections as it could not achieve the outcome Ms X is looking for.

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Investigator's decision on behalf of the Ombudsman

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