The Ombudsman's final decision:
Summary: There was fault in how the Council decided to dispose of land near Mr X’s home. The Council agreed to apologise to Mr X as this fault falsely raised his expectations of securing the land. But the fault is not likely to have affected the Council’s decision or, therefore, the position in which Mr X now finds himself.
- Mr X says the Council did not follow its procedures and was not open and fair in disposing of land near his home. Mr X says what happened caused confusion and tremendous stress and he is angry at the Council’s lack of transparency in disposing of the land. Mr X also has concerns about possible financial and other bad effects on his home if the land is developed in the future. Mr X wants the Council to overturn its decision or, at least, stop its development.
The Ombudsman’s role and powers
- 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)
- 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 Mr X’s written complaint and supporting papers;
- talked to Mr X about the complaint;
- asked for and considered the Council’s comments and supporting papers about the complaint;
- shared, where possible, the Council’s comments and supporting papers with Mr X; and
- shared a draft of this statement with Mr X and the Council and considered their responses.
What I found
- Councils have powers to buy, sell and lease land. Excluding details not relevant to this complaint, the law says councils should not sell or lease their land for less than the best price achievable on the open market. However, councils may ask the Government’s Secretary of State for consent to dispose of land at less than ‘best value’. The Government has also issued a ‘general consent order’ to cover disposals at less than best value provided any undervaluation does not exceed £2million. The general consent applies where a council considers the disposal will help promote or improve the economic, social, or environmental wellbeing of its area. The consent also says councils should ensure such disposals follow normal and prudent commercial practices. Such practices include getting advice from a professionally qualified valuer on the likely undervalue.
- The Council owns land that, in practical terms, is ‘landlocked’ by neighbouring properties. Mr X owns a neighbouring property. Another neighbour (‘the Third Party’) approached the Council about using the land to benefit local people. The Third Party also contacted the local councillor for the area (‘the ward councillor’) about using the land. The ward councillor contacted a senior Council officer and another councillor showing support for using the land as proposed by the Third Party.
- The Council decided to contact all owners of property adjoining the land to ‘test the market’ before responding to the Third Party. The Council then wrote to the owners including Mr X and the Third Party (‘the Letter’). (The evidence shows neither the Third Party nor the ward councillor knew about the decision to ‘test the market’ before the Council sent the Letter.) The Letter said the Council was considering disposing of the land and so inviting neighbouring owners to state an interest in buying or leasing it. The Letter gave a deadline for replies. The Letter also said, “further details will be provided to all parties who have expressed an interest so as to enable a more informed decision to be made”.
- Mr X replied confirming his interest and asking what would happen next and when to expect more information. The Council said it had to wait until the deadline for expressing an interest passed and it would then be in touch “with the next steps”. The Council also asked Mr X to confirm if he preferred to buy or lease the land. Mr X said his preference was to buy.
- The Council’s deadline for responses passed. Senior Council officers then further discussed the future of the land with the ward councillor (‘the Meeting’). None of those taking part have any written record of the discussion. However, later, another officer said councillors had asked for the lease of the land to the Third Party for the proposed public benefit.
- Council officers then prepared a report about the land (‘the Report’). The Report referred both to the need to get best value when disposing of land and the effect of the Secretary of State’s general consent order. The Report recommended the lease of the land, which it described as “unused”, to the Third Party. The Report said the Third Party proposed using the land in a way that would benefit the public. The Report also said the lease should have a five year ‘break clause’ to cover the possibility the proposed public benefit did not take place. The Report said the alternative was to dispose of the land to other neighbours for the best achievable amount. The Report did not expressly set out if other neighbours, like Mr X, had expressed an interest in buying the land.
- Council officers considered the Report at a meeting of the Council’s Asset Management Strategy group. The officer group agreed the recommendation and sent the Report to the ‘Portfolio Holder’ Councillor responsible for making a decision. The Portfolio Holder agreed the recommendation for the Council.
- The Council then wrote to Mr X and told him it had decided to lease the land to the Third Party for a public purpose. Mr X replied expressing his ‘deep disappointment’ and ‘grave concern’ about how the Council had dealt with the land. Mr X said he could use the land to benefit the Council, but it had not asked him about this or provided the further details promised in the Letter. Mr X said he was now forced to challenge the decision. Mr X’s letter set out questions for the Council to answer before he ‘sought further advice and possibly involved a barrister’.
- In reply the Council set out what had happened referring to the Meeting, Report, and the officer group’s recommendation to the Portfolio Holder. In answering Mr X’s questions, the Council said it had followed up Mr X’s expression of interest in the land by telling him of its decision to let the land to the Third Party. It could give no details of the lease, which it had yet to prepare and agree with the Third Party. And the proposed use of the land would need planning permission. Mr X’s concerns about the impact of that use were planning matters for consideration once the Third Party applied for planning permission.
- Mr X remained dissatisfied and said the Council should have asked local people for their views about the future use of the land. Mr X also said the Council’s response showed its decision to lease the land to the Third Party ‘was a foregone conclusion’. And that asking neighbours to express an interest had been a ‘box ticking exercise’. Mr X also stressed that telling him about the decision was not providing more information as promised in the Letter. Mr X said he had now “sought specific legal advice”. Mr X also said the Report did not show that people had expressed an interest in the land and this omission meant the Council had not made a transparent and informed decision.
- The Council replied noting Mr X’s disappointment with its decision to let the land to the Third Party rather than selling/leasing it to him. The Council said it had considered all expressions of interest in the land. And, it was under no obligation to dispose of the land to any particular party and Mr X was not entitled to buy/lease the land.
- Mr X continued to challenge the Council’s position repeating the Report did not show it had received and considered other expressions of interest. Mr X stressed that sending only the Letter was not engaging with interested parties about the sale/lease of the land. Mr X also commented on the behaviour of the Third Party in seeking support from the ward councillor and local Parish Council. Mr X said he had never considered he was entitled to the land but did expect transparency in the Council’s decision making. Mr X said there had been ‘administrative negligence and procedural irregularities’ in the Council’s decision making. Mr X referred to his earlier legal advice and asked the Council to resolve matters before he went ‘to the next step’. To resolve his concerns, Mr X said the Council should either restart the disposal procedure or ensure no development took place on the land.
- The Council referred Mr X’s correspondence to its lawyers, who then wrote to Mr X. The lawyers asked Mr X to provide details and evidence of his administrative and procedural concerns so they could better understand his complaint and legal claim against the Council. Mr X replied saying his correspondence with the Council set out his concerns and questions. Mr X said he would now, as suggested by the Council in its earlier responses, contact the Ombudsman.
- My role is to consider whether the Council acted with fault in reaching its decision to let the land to the Third Party and, if so, whether that fault caused Mr X injustice.
- Mr X says the Third Party has long been interested in the land. This may be correct. And yet, any such interest had not resulted in the Council agreeing to sell or lease the land to the Third Party before the events in this complaint took place. And, when the Third Party contacted the Council last year, the available evidence shows the Council did not simply enter into negotiations with the Third Party about the land. Rather, the Council decided to ‘test the market’. I find this was a suitable and reasonable response to the Third Party’s approach.
- The Council then sent out the Letter. Mr X and the Council have differing views about the meaning and effect of the Letter. The Council says its later letter to Mr X, telling him of its decision to lease the land to the Third Party, was a suitable follow up. I disagree. The Letter reads that, if neighbours express an interest in the land, the Council will provide further details to allow them to make a more informed decision. Indeed, after expressing an interest, Mr X asked what would happen and the Council replied it would be in touch about ‘next steps’.
- The Letter and Mr X’s following correspondence with the Council created an expectation of further involvement before the Council decided what to do with the land. If, as it seems, the Council was not necessarily going to further engage with all parties that might express an interest, it should not have phrased the Letter as it did. The available evidence shows the Council did not act on its written commitment to provide more information to Mr X. The wording of the Letter and the Council’s correspondence with Mr X therefore unreasonably raised his expectations about what would happen. I therefore find both fault by the Council and resulting injustice to Mr X on this point.
- Mr X claims greater injustice and says the Council did not properly and fairly consider his expression of interest and so suggests it should retake its decision. Mr X has referred to the behaviour of the Third Party. I have no jurisdiction to investigate the actions of the Third Party. I also have seen no evidence Council officers involved in the case or the Portfolio Holder had links to the Third Party.
- The evidence does show the Third Party contacted the ward councillor seeking support for leasing the land, which support was forthcoming. The evidence also shows the ward councillor shared support for the Third Party’s proposal with Council officers and other councillors. People may approach their local councillors, which councillors may present residents’ views to their council. I find this happened here, and the evidence does not suggest there was fault by the Council on this point.
- Mr X has concerns about the Report. The Council says the Report explains the Third Party’s proposal would provide significant local benefits. I recognise Council’s view has merit. And yet, the Report ought clearly to have set out all expressions of interest in the land received by the Council. And, in Mr X’s case, the Report should have shown his interest in buying the land, which would have produced a capital receipt for the Council. Each expression of interest ought then be assessed to demonstrate how and why officers reached their recommendation to lease the land to the Third Party. In the circumstances here - a small unused parcel of land - doing this would not be demanding or need detailed analysis. It would, however, have avoided the foreseeable concerns raised by Mr X about the lack of demonstrable evidence the Council properly considered his interest in the land. On balance, the Report did not adequately address all interests expressed in the land and fell below acceptable administrative standards. I therefore find fault here. I further find such fault is likely to have caused Mr X avoidable frustration.
- I recognise Mr X may not share the Council’s view of the extent of the benefit to the wider community of the Third Party’s proposed use of the land. And yet, having considered what both Mr X and the Council say, I recognise use of the land as proposed by the Third Party would have such a benefit. I therefore find that if the faults I have identified at paragraphs 21 and 24 had not taken place, the Council is likely to have reached the same decision. Mr X is therefore likely to have been in the same position in which he now finds himself. I do not therefore find Mr X has been caused any greater injustice than that I have identified at paragraphs 21 and 24 of this statement.
- To put right the injustice to Mr X caused by the fault identified at paragraphs 21 and 24, the Council agreed, within 10 working days of this decision, to send Mr X a written apology. The Council also agreed to copy that apology to the Ombudsman when sending it to Mr X.
- I completed my investigation, finding fault causing injustice, on the Council agreeing the recommendations set out at paragraph 26 of this statement.
Investigator's decision on behalf of the Ombudsman