Stoke-on-Trent City Council (19 001 378)

Category : Housing > Other

Decision : Upheld

Decision date : 11 Sep 2019

The Ombudsman's final decision:

Summary: The Ombudsman found no fault by the Council on Mr D’s complaint of it failing to properly investigate his report of a possible conflict of interests of 2 of its officers under its employee code of conduct. The Council properly investigated it. There was poor record keeping as it failed to provide evidence of the officers notifying and obtaining consent to start their business. The fault caused no significant injustice.

The complaint

  1. Mr D complains the Council failed to properly investigate his report of a conflict of interest under its employees’ code of conduct of a private sector housing enforcement manager who is also a director of a company that lets private properties; as a result, he considers the officer has an unfair advantage against competitor landlords such as himself.

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The Ombudsman’s role and powers

  1. 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)
  2. 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)

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Council’s Constitution: private business arrangements

  1. The Council does not wish to prevent employees from engaging in any private work of a voluntary or paid nature. However, there may be no apparent distinction to an outside observer between the work done as an employee and other paid or unpaid work. The Council has a responsibility to ensure all employees are aware of the circumstances in which private work may or may not be undertaken. (paragraph 27.1)
  2. Employees paid in accordance with Level 10 or above shall devote their whole-time service to the work of the Council and shall not engage in any other business or take up any other additional appointment without obtaining the express prior consent of the Council, through a Director or other nominated senior manager. (paragraph 27.2)
  3. Employees must not undertake any type of private work or engage in any private business interest which conflicts with the Council’s interests or in any way weakens public confidence in the Council. Work undertaken outside of the Council must not prevent the employee from fulfilling the terms of employment. If an employee is in any doubt as to whether any work they intend to do may conflict with their employment with the Council, they must seek advice in each case from a Director or senior manager. (Paragraph 27.4)

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How I considered this complaint

  1. I considered all the information provided by Mr D, the notes I made of our telephone conversation, and the Council’s response to my enquiries, a copy of which I sent him. I did not send him a complete copy. This is because the Council sent information that needed to remain confidential. The copies I sent him were redacted to protect the confidentiality of this information. I sent a copy of my draft decision to Mr D and the Council. I considered the Council’s response.

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What I found

  1. Mr D is a landlord and rents out a property which is a house in multiple occupation. A house in multiple occupation is a property rented by at least 3 people who are not one household. They share facilities, like a bathroom and kitchen for example. Landlords renting out a large house in multiple occupation (5 or more tenants) need a licence from a council. Landlords of these properties have extra responsibilities such as fire safety measures, gas safety checks, and ensuring there are enough facilities for those living there.
  2. Mr D saw an online reference which included the name of Council Officer X who he had contact with through his role as landlord. After some research, Mr D discovered Officer X had formed a limited company 4 years earlier with a former Council officer, Officer Y. The company is a property letting agency. Mr D believes there is a conflict of interest with Officer X’s job at the Council. Officer X’s job is to inspect houses in multiple occupation, issue licences, and consider enforcement action. Mr D argues the properties the company rents out are in the area Officer X covers when working for the Council.
  3. The Council told Mr D it was aware of Officer X’s role in his company. It did not consider his private interest conflicted with its own or weakened public confidence in the Council. Officer X’s property is not a licensable house in multiple occupation. Nor has it received any complaints about it which needed investigating.
  4. It had no concerns about Officer X’s conduct. If any of Officer X’s properties need inspecting, the Council said it would be done by an officer from another part of the Council. The strategic manager responsible for the private sector housing service will sign off and review any inspection and enforcement action proposed.
  5. In response to my enquiries, the Council provided the following information:
  • The officers bought their properties 5 years ago and initially lived in them as their main homes;
  • Officer X’s property is outside the city boundary, Officer Y’s is within it;
  • It received no complaint about the officers misusing their position or information and nor is there any evidence of them doing so;
  • They let and managed their 2 properties through the company. They do not own any other properties;
  • They do not offer services to landlords as letting or managing agents;
  • Both officers previously spoke to their managers about their intention to form a business and rent out the properties;
  • Their Council roles were mainly inspecting accommodation for disrepair and taking enforcement action if the landlord failed to carry out repairs. Other tasks, including giving advice about houses in multiple occupation and licensing, were shared between them and another 4 officers; and
  • It does not have notes of communication and meetings with either officer about their potential conflict of interest from their company.

Analysis

  1. I am satisfied the Council properly investigated Mr D’s report about the officers and a potential conflict of interest. This is because I have seen copies of the notes made during the investigation of his complaint which involved getting information from Officer X. The stage 1 and 2 responses explained why the Council concluded there was no conflict of interest. I found no fault on this complaint.
  2. I found some fault with the Council’s procedures because:
      1. the Council could not provide evidence showing the officers notified and discussed their business proposal with senior officers as required by the Code of Conduct before setting it up; and
      2. despite saying the officers obtained the express consent of their manager and strategic manager, it failed to provide evidence to support the claim.
  3. I am not satisfied the fault found caused Mr D an avoidable injustice. This is because the evidence the Council provided of the information gathered during the complaints process confirmed:
  • The officers only had 2 properties, both of which they had previously lived in;
  • Neither property was a house in multiple occupation;
  • They offered no services to other landlords or agents;
  • Their roles involved checking disrepair, taking enforcement action about it, and giving advice about houses in multiple occupation;
  • It remained satisfied there was no conflict of interest; and
  • It took action to ensure any complaint linked to either officer is not dealt with by them. Another team would investigate them under the supervision of a senior manager.
  1. In addition, I note the Council confirmed it put in place procedures to ensure communication and notes of meetings with officers are made and retained in the future about a potential conflict of interest.
  2. In its response to my draft decision, the Council said the Code makes no mention of the need for written consent. This is correct. The finding of fault is based on the Council’s failure to provide evidence of either Officer X notifying and discussing the Council of the business proposal or senior officers giving express consent. I cannot accept claims of what happened without evidence in support.
  3. The Council was also unhappy the investigation of Mr D’s initial statement of complaint found no fault but, found fault with it record keeping. I do not accept the Council’s assertion the fault finding is punitive. During an investigation, fault may be identified that a complainant did not identify or allege initially. That is the nature of any investigation.
  4. Proper record keeping is essential as this provides evidence of what happened. Decisions on complaints are rooted in the evidence placed before the investigator. Decisions not rooted in evidence run the risk of becoming arbitrary.

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Final decision

  1. The Ombudsman found fault causing no injustice on Mr D’s complaint against the Council.

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Investigator's decision on behalf of the Ombudsman

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