The Ombudsman's final decision:
Summary: Mr X complained about the way the Council dealt with placing a legal charge on his property. The Council was at fault in delaying the charge. It has apologized, and as Mr X suffered no injustice from the fault this a satisfactory response.
- Mr X complains the Council delayed in placing a legal charge on his property after a successful application for a grant to support heritage repair works. He complains the delay resulted in increased costs for the work, less work than originally intended, and a bigger financial commitment from him. He says the Council should compensate him for his financial losses.
The Ombudsman’s role and powers
- We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
- 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)
How I considered this complaint
- I have considered the following:
- Mr X’s complaint to the Local Government and Social Care Ombudsman
- Mr X’s correspondence with the Council
- The Council’s correspondence with Mr X
- The Council’s response to the Ombudsman’s enquiries.
What I found
- The Council invited expressions of interest for a grant through the Keighley Townscape Heritage Initiative (THI) in 2014. The THI was designed to improve shop frontages in the town.
- The THI provided a grant of 75% towards the works and the successful applicant needed to put in 25% of the funds.
- To be eligible for grant assistance an applicant had to submit three tenders for the work.
- Mr X applied for a grant to support external restorations to his property in December 2014.
- Mr X engaged an architect who put in a schedule of works to be completed with the grant in June 2015.
- Mr X’s architect put in an application, with a tender summary and the priced tender return of the preferred contractor, in September 2015. The contractor could begin work in November.
- Before work could start the Project Board had to approve the grant, the contract needed completing and the Council’s legal services department had to place a legal charge on the property.
- On 7 October, the project officer asked legal services to prepare a legal charge on Mr X’s property.
- On 22 October, the architect told the project officer Mr X had agreed to delay commencement of the works until the beginning of 2016.
- The draft legal charge was completed on 30 March 2016 and sent to Mr X for signing.
- In May the project officer noted on file that Mr X’s architect was contacting the contractor. This was to check prices had not increased and work could begin in September or October.
- In June Mr X’s architect told the project officer the preferred contractor could not start work until January or February 2017. He said he would check the availability of the other tendering contractors.
- On 24 June, the architect said none of the original tendering contractors were available to do the work until 2017.
- The THI originally had an end date for completion of the work, though this was extended to June 2017. It was decided to re-tender the work.
- In October Mr X’s architect provided two new tenders and a draft works programme from the lowest tender. At the same time, the architect raised the matter that Mr X would only contribute £30,000, plus VAT to the project.
- To meet this figure, and Mr X’s 25% grant contribution to the project costs, the architect had to adapt the works specification and identify savings.
- The Council issued a draft grant contract to Mr X on 22 November. He returned a signed copy on 2 December.
Mr X’s complaint
- Mr X complained to the Council on 4 January 2017. He complained the delay in applying a legal charge to his property had resulted in the estimated cost of the works rising by over £40,000. Mr X said his contribution to the costs had risen by £7,500.
- Mr X complained the schedule of works had also changed, with less work being completed when compared to the original schedule. He said if the Council had applied the legal charge earlier the works could have started and been completed for much less.
- Mr X complained it should not have taken eight months to apply a legal charge. He said the Council should take responsibility for the delay.
- The Council replied to Mr X on 27 January. An officer said:
- A delay occurred between the original tendering of works, the identification of a preferred contractor, and the issuing of draft legal charge papers;
- The delay was just less than 6 months and included the Christmas period when officers were unavailable;
- The legal services department had limited resources and its officers were needed to focus on higher priorities;
- The Council could not have foreseen the legal charge delay would result in the preferred contractor being unable to undertake the works, resulting in the works needing to be re-tendered;
- The lowest tendered return for the second round was higher than previously;
- The grant percentages applied to the works remained the same as before, so the grant amount was also higher due to the increased costs; and
- Although some of the works in the original schedule would not now be completed this was Mr X’s decision, based on the figure he was prepared to contribute.
The Council’s response to the Ombudsman’s enquiries
- The Council told me there was delay in placing the legal charge on Mr X’s property. It told me it generally took between two and four weeks to apply a legal charge.
- The Council accepted in Mr X’s case there was a delay of three months in applying the legal charge, following his architect’s request for the works to start in January 2016.
- The Council said it was Mr X’s architect who decided to re-tender the works when the original contractor could not start the works when he wanted them to. The Council said this resulted in a further delay.
- The Council told me the new tender returns were higher than the original contractors. It said this was mainly because they were larger companies with higher overheads.
- The Council said it was beyond both its control, and that of the project manager, to source identical contractors who could provide equivalent estimates to the first round of tenders.
- The Council said there was more delay when Mr X’s architect and the project officer had to make several adjustments to the final tender. This reduced the overall project costs down to a figure which matched the contribution Mr X was prepared to make.
- The Council explained the difference in the original schedule of works and the one Mr X was prepared to sign up to was down to his self-imposed limit on his contribution to the overall project costs. It said because Mr X limited his contribution the works specification was reduced.
- The Council told me it was standard THI procedure for any costs accrued in plans and schedule preparation and other professional costs to be at the property owner’s risk. It said these fees could only be subject to a grant contribution where a full contract was entered and the project architect supervised the works to completion. The Council said Mr X would have been aware of this when applying for a grant and entering into a contract with his project architect.
- The Council said Mr X was fully aware of the increased costs after the re-tender for the works. It said Mr X’s project architect presented them to him. The Council explained this resulted in Mr X’s decision to set a limit on his contribution.
- The Council told me it issued a ‘grant in principle letter’ before the draft grant contract detailing the figure for the works.
- The Council said Mr X’s project architect would have made him aware of the reductions in the specification.
- The Council said if Mr X had been in any doubt over the terms of the grant contract, he could have questioned these with the project officer, the project architect, or he could have sought independent legal advice. It said Mr X signed the contract without objection.
- The Council explained the grant contract was a binding contract between the applicant and the Heritage Lottery Fund (HLF), administered by the Council. It said the calculations for grant contributions were set by the HLF and could not be altered.
- The Council said the grant contribution could not be increased above the percentage set. It said it had no additional funds to provide compensation, and did not believe it was appropriate to pay compensation given Mr X’s commitment to a grant contract.
- The Council said the works had been completed to the revised schedule and to the satisfaction of the project architect. It said Mr X had settled his contribution, making payment requests without opposition.
- Mr X has claimed there was an eight month delay in the Council applying a legal charge to his property. This is not correct. From the chronology I have seen, the actual delay, given Mr X’s architect asked for the works to be started in January, was three months.
- I must assess whether those three months were the material contributing factor to the loss of the original contractor, resulting in the re-tender and the increased costs of the works.
- From the evidence I have seen I do not think I can attribute the increased costs of the work just to the delay in applying the legal charge. I say this because it was not until June Mr X’s architect told the THI project officer the original contractor could not be available until January or February 2017.
- I have no explanation for this two month delay. The file note from the project officer in May suggests matters are with Mr X’s architect. I cannot, therefore, hold the Council responsible for all the delay. From that assessment, I find I cannot hold the Council responsible for the loss of the original contractor.
- There was fault by the Council in the way it delayed applying a legal charge to Mr X’s property. I cannot from this, however, ascribe the injustice Mr X claims from this delay and recommend the Council provides any compensation for his increased financial contribution to the works.
- From the evidence I have seen it was Mr X’s architect who decided re-tendering for the works was the only option. This further delayed the progress of the grant and because of this the costs of the work increased.
- I cannot attribute the reduction in the schedule of works to the Council. It was Mr X who set the limit to his personal financial contribution. That was his right, but he cannot blame the Council for the resulting reduction in works.
- The Council has told me within the THI process any costs a property owner accrues during plans, schedule preparation and other professional costs are at their risk. The Council has said Mr X would have been aware of this when applying for a grant and entering into a contract with his project architect. I have no evidence from Mr X to suggest this is wrong. Without this, I find his request for compensation for the first estimate costs has no foundation.
- I find merit in the Council’s position that Mr X signed the grant contract in the full knowledge of the final contribution from the THI project and his own contribution to the costs. Mr X had the opportunity at that point to try and negotiate a different contribution from either party, or to refuse to sign the contract. He signed the contract and I find no fault in the Council’s actions here.
- The Council has apologized to Mr X for the delay in applying the legal charge to his property. This is a satisfactory response for this fault.
- I have found fault in the Council’s actions. This has caused Mr X no injustice.
- I have completed my investigation.
Investigator's decision on behalf of the Ombudsman