Cornwall Council (17 014 288)

Category : Other Categories > Land

Decision : Upheld

Decision date : 14 Nov 2018

The Ombudsman's final decision:

Summary: There is fault in how the Council considered Mr X’s bid for a licence to operate a business on Council owned land. As a result Mr X cannot be certain the Council properly and fairly considered his bid. The Council has agreed to remedy Mr X’s injustice by sending an apology, making a payment of £500 and considering Mr X’s bid again. The Council will also review its evaluation process to ensure it is transparent.

The complaint

  1. Mr X complains about the Council’s decision to reject his bid for a pop up licence to run a surf school from Council owned land.

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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)

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How I considered this complaint

  1. I have:
    • Considered the complaint and the information provided by Mr X;
    • Made enquiries of the Council and considered the information provided;
    • Invited Mr X and the Council to comment on the draft decision.

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What I found

  1. The Council invited tenders for licences to operate businesses from Council owned land. The Council’s tender application states that tenders will be assessed by the following matrix:
    • Annual rent bid – 40%
    • Quality of proposed commercial concession – 60%
  2. The Council’s application for the tender stated additional points will be given to those proposals that benefit the community, provide a good strategic fit with existing businesses and which can demonstrate environmental sustainability. The tender application also declared the Council is not obliged to accept the highest nor any bid received.
  3. The Council evaluates the tenders after the closing date and scores them according to how well the bids meet its criteria.
  4. Mr X submitted a bid to operate a surf school in one area. The Council does not own the entire beach in this area. The Council’s records of its evaluation show Mr X’s bid was rejected as it could not consider surfing on the site.
  5. The Council notified Mr X that his bid was unsuccessful. Mr X contacted the Council to ask why. The Council explained that it considered its area of the beach to be too small for surf school operations.
  6. The Council invited tenders for licences again. The Council amended the area from the first tender exercise to allow for watersports. Mr X submitted a further bid and explained he had permission from the landowner to operate on their section of the beach.
  7. The Council rejected Mr X’s bid. The Council’s record of the evaluation of the bids notes Mr X’s bid but there is no record of how it was evaluated against the criteria or the Council’s reasons for rejecting the bid.
  8. The Council informed Mr X that it had rejected his bid. Emails between Mr X and a council officer show that the officer advised Mr X that his bid was rejected as his commercial activities would be taking place on land not owned by the Council so it could not issue a lease. Mr X told the Council he had permission to operate on the beach from the landowner.
  9. Mr X made a complaint to the Council about its decision to reject his bid. The Council considered his complaint through its two stage complaints procedure. The Council’s stage one response explained that one consideration was whether the proposed business would conflict with existing businesses in the area. It rejected Mr X’s bid as it considered Mr X’s business would conflict with other businesses in the area.
  10. Mr X requested his complaint be escalated to stage two. In doing so he said that the allocation of a licence to a similar business in a different area would negatively affect the existing businesses in that area so the Council was not being consistent. In a further email Mr X asked the Council to explain which businesses he would be in conflict with as two similar businesses had moved and he catered for a different customer base.
  11. The Council’s stage two response said that Mr X’s bid was rejected as
    • The area owned by the Council was insufficient for Mr X’s proposal so he would need permission from the other landowner to operate and it was not evident this was the case;
    • Mr X’s business was new and in direct competition with other traders.
  12. The Council also explained that it had allocated a licence in another area to a similar business as it was operating from the area of land owned by the Council and was an extension to an existing business. So it would not have an impact on the existing businesses.
  13. Following further contact from Mr X the Council issued a further response to his complaint. In this response the Council acknowledged that Mr X did have permission from the landowner to use their land. But his bid was rejected as the Council considered Mr X’s business was in conflict with other businesses in the area.
  14. Mr X has provided a copy of his licence from the landowner. This is a draft licence. The Council has said that having a licence to operate on the third party’s land is not part of the formal evaluation of the tender but without agreement from the landowner for Mr X to operate the licence could not proceed.
  15. The Council has provided further information on why it rejected Mr X’s bid. I cannot disclose this information as it is confidential. But it shows the Council made its decision to refuse Mr X’s bid based on information which was not part of the Council’s evaluation criteria.

My assessment

  1. It is not my role to decide if the Council should have accepted Mr X’s bid and offered him the licence for the area. My role is to consider if there is fault in the way the Council considered Mr X’s bid.
  2. There is no evidence of fault in how the Council considered Mr X’s first bid. The Council’s record shows it broadly evaluated the bids against the criteria and records its reasons for refusing Mr X’s bid, namely that it could not allow surfing on the site as there was insufficient space.
  3. Councils must be open and transparent in their decision making. The Council’s evaluation of Mr X’s second bid was not open or transparent and this is fault. The record of the evaluation does not show the Council assessed Mr X’s bid against the criteria and scored it. It does not record that Council considered Mr X’s business would conflict with other businesses in the area and why this would be the case.
  4. The Council has now provided further information and reasoning for rejecting Mr X’s bid. These reasons are not included in the Council’s criteria for evaluating bids. They also do not relate to the quality of Mr X’s bid which is what the Council should be evaluating. So the Council should not have considered this information and reasoning when evaluating Mr X’s bid. The Council also cannot rely on a reason for rejecting Mr X’s bid which it will not disclose to Mr X.
  5. The Council has said its requirement for Mr X to have a licence from the third party landowner is not part of the tender bid evaluation. But it has also stated Mr X’s lack of licence as a reason for not granting his bid for a licence. This is fault. If the Council requires bidders to have a licence to operate on third party land it should clearly explain this in the tender application.
  6. The Council’s tender application states it can reject a bid. But councils must give reasons for their decisions in order to be open and transparent. So the Council cannot reject a bid without giving proper and clear reasons for its decision.
  7. The Council has also been inconsistent in its reasoning for why Mr X’s bid was rejected. The officer’s correspondence with Mr X following the rejection of his bid suggested this was because his activities would take place on land outside its ownership. The Council only explained it considered Mr X’s business would be in conflict with other businesses in response to his complaint. The Council also acknowledged Mr X had permission to use the landowner’s land for his business but it now considers Mr X does not have such permission as he only has a draft licence.
  8. The Council did not address Mr X’s position that his business will not conflict with existing businesses when dealing with his complaint. Nor did it address this point in response to my enquiries. So Mr X cannot know why the Council considered his business would be in conflict with others.
  9. The faults identified above show the Council’s procedure for evaluating bids is not open or transparent. Nor can the Council demonstrate it has evaluated Mr X’s bid in a fair, open and transparent way. As a result Mr X cannot be satisfied the Council has properly and fairly considered his bid which causes uncertainty to him. The Council should remedy Mr X’s uncertainty by re-evaluating his bid. This is an appropriate remedy as it puts Mr X back in the position he would have been in had the faults not occurred.
  10. The Council has agreed to re-evaluate Mr X’s bid. But it has also said that re-evaluation would not change its decision. The Council cannot predetermine the outcome of the re-evaluation before it has been carried out. It must approach the re-evaluation with an open mind and it gives the appearance of bias if it does not do so. Mr X’s bid should therefore be re-evaluated by officers and/or councillors who have not previously been involved in the evaluation of his bids. This will ensure the re-evaluation is carried out fairly and is seen to be fair.
  11. The Council has acknowledged that its lack of clear response to Mr X’s requests for reasons why his bid was refused and his complaint may have caused Mr X to lose confidence in the Council. It has also acknowledged that it has been inconsistent in its approach. The Council has offered to remedy this injustice by making a payment of £500 to him. This is an appropriate remedy. It is also a sufficient remedy to acknowledge the uncertainty caused to Mr X and that he has been put to avoidable time and trouble in having to pursue the Council for cogent and consistent reasons for why his bid was refused.

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Agreed action

  1. The Council should:
    1. send a written apology and make a payment of £500 to Mr X for the uncertainty, loss of confidence and avoidable time and trouble caused to him by the faults by the Council.
    2. consider Mr X’s second bid for a licence again to determine if it should offer a licence to him. The re-evaluation of Mr X’s bid should be carried out by officers/councillors not previously involved in the consideration of his bids in order to ensure the re-evaluation is fair and seen to be fair. The Council should notify Mr X of the outcome and give clear and full reasons for its decision.
    3. If the Council decides Mr X’s bid for a licence should be granted following its re-evaluation, the Council should then consider an appropriate remedy to acknowledge that the faults in the evaluation of the second bid meant he was not granted the licence from 2017.
    4. reviews its process for evaluating bids for pop up licences to ensure its evaluation process is transparent, it keeps appropriate records of the evaluation and it can provide clear reasons for why a bid is not accepted. The Council should explain to the Ombudsman what action it has taken to do this and improve its practice in this area.
  2. The Council should take the agreed actions a) to c) within two months of my final decision. It should take action d) within three months of my final decision.

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Final decision

  1. There is fault in how the Council considered Mr X’s bid for a licence to operate a business on Council owned land. As a result Mr X cannot be certain the Council properly considered his bid. The Council has agreed to remedy this injustice as recommended. The remedy is appropriate and proportionate and I cannot achieve any more for Mr X. I have therefore completed my investigation.

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Investigator's decision on behalf of the Ombudsman

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