Summary: Miss X complains the Council failed to make a formal record of, or disclose, its reasons for refusing some applications for Community Infrastructure Levy and Section 106 funds. We have found fault with the Council’s actions. The Council has agreed to apologise to Miss X and make changes to its procedures to remedy the injustice caused.

The complaint

1. Miss X complains about the way the Council records decisions about allocating Community Infrastructure Levy (CIL) and devolved S106 funds. Miss X says the Council rejected her proposal for funding without making public its reasons or criteria. This made it difficult to understand why the Council rejected the proposal and to make necessary changes.
2. Miss X also says some meetings are not open to public scrutiny, allowing the potential for conflicts of interest.

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The Ombudsman’s role and powers

3. 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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How I considered this complaint

4. I considered information provided by Miss X and discussed the complaint with her.
5. I considered information provided by the Council.
6. Miss X and the Council had an opportunity to comment on a draft version of this decision. I considered their comments before making a final decision.

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Relevant legislation and guidance

Community Infrastructure Levy and Planning Obligations

7. The Community Infrastructure Levy (CIL) is a charge local authorities can levy on new developments in their area. CIL funds can be used for a broad range of purposes, including green spaces and cultural and sports projects. Healthcare, educational and community safety projects can also be funded through the CIL.
8. Similarly, planning obligations are intended to mitigate the impacts of a development proposal. Obligations are formalised in a planning agreement under section 106 of the Town and Country Planning Act 1990. Funds obtained through these agreements are commonly referred to as “S106 funds”.

Principles of Good Administrative Practice

9. The Ombudsman published the Principles of Good Administrative Practice (the Practice) in 2018. The Practice sets out the Ombudsman’s benchmark for the standards expected when investigating local authorities’ actions.
10. The Practice stresses the importance of being open and accountable, explaining the reasons for decision making, and keeping proper, suitable records.

Open and accountable local government

11. The Openness of Local Government Bodies Regulations 2014 and The Local Authorities (Executive Arrangements)(Meetings and Access to Information)(England) Regulations 2012 set out the rules for openness for councils. The Government has produced an accompanying document called Open and Accountable Local Government (the Guide). The Guide provides information about what these rules mean for members of the public attending council meetings. This includes meetings of a council’s committees and sub-committees.
12. Part 2 of the Guide explains how the public can access meetings of a council’s executive, its committees and sub-committees, and records of executive decisions taken by individual members or officers. A council’s executive (the council’s cabinet) is its main decision-making body consisting of an elected mayor or leader, and elected councillors.

The Council’s Area Committee terms of reference

13. The Council’s Area CIL/S106 Committee terms of reference document sets out how the Area Committees operate. Area Committees decide how to allocate the local element of CIL funds raised within the relevant area. The Committees also decide how to allocate devolved S106 funds.

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What I found

14. The Council has six Area Committees that decide how local funds are spent to support improvements in their areas. In this case, “local funds” refers to money available from the CIL and S106 agreements.
15. The Area Committees are made up of local councillors, who work with the communities in their wards to identify priorities for neighbourhood improvements. These improvements can be funded using money available from S106 agreements and the CIL. The Area Committees decide their priorities once a year, in three stages:
• At stage one, residents and groups can suggest ‘outline’ proposals, which councillors can approve in principle. Councillors prioritise projects based on feedback from community events. The Area Committees then meet to review the priority projects, assess which projects will best improve their communities, and work out how much CIL and S106 money is available. The Committee members will agree which outline proposals they wish to put forward to stage two.
• At stage two, successful outline proposals are developed into full proposals, with more details on costs and the benefits the project will bring to the community. The proposals may be subject to technical assessments. The Area Committees will then meet and decide if they should approve CIL and S106 funds for a project, as well as whether to impose any conditions on the project’s delivery.
• At stage three, funds are awarded, subject to the completion of the relevant paperwork and checks.
16. Miss X put in a bid for funding, which did not progress beyond stage one. Miss X told us she asked for more information about why her proposal did not move forward, such as a record showing the reasons for the decision. She says the Council told her it did not provide a public record of the stage one meetings about ‘outline proposals’.
17. Miss X complained to the Council about this. She said:
• the stage one meetings were not open to public scrutiny and the Council produced no written record of the meeting, so it was not possible to know how the committee made its decisions;
• the lack of scrutiny made conflicts of interest possible;
• Committee members were not best placed to decide how to correctly allocate funds; and
• Committee members might eliminate bids because of incorrect information, with there being no opportunity to correct this and no right of appeal.
18. Miss X also highlighted a potential conflict of interest concerning one member.
19. The Council responded to Miss X’s complaint. The Council said the terms of reference for Area Committees allowed the Chair and other interested parties to meet with relevant officers before the stage two public meeting. This was to agree what matters would be heard. The Council said:

“The informal meeting of the Area Committees at the end of Stage 1 of the process takes this form. Its purpose is to enable councillors from all the wards in the Area Committee area to share the Outline Proposals for projects together, to consider the amount of funds from CIL and S106 they have available to them and to agree which proposals they want to invite to submit Full Proposals as the business they will transact at their Public Meeting later in the year. As such it is not a Public meeting and no funding decisions are taken there. No public minutes are taken (although notes are made in preparation for the Public Meeting by officers).”

20. The Council said councillors would have considered any ‘outline proposals’ put in before the meeting and ranked them in accordance with local priorities, in consultation with their wider communities. The councillors therefore came to the informal meeting already having this information. The councillors would then agree which proposals they wanted to bring forward for formal business decisions at the next public meeting. Residents or local groups could re-submit to the next Area Committee cycle any outline proposals not brought forward this time.
21. The Council said the informal meetings were private, as allowed for in the terms of reference, and there were no public minutes. Councillors based their decisions on advice from officers about cost, feasibility, and alignment with other relevant delivery plans. These discussions helped councillors decide which ‘outline proposals’ they may consider as ‘full proposals’ at the public meeting.
22. The Council said there was no right of appeal, as the terms of reference did not allow for this.
23. The Council said Committee members declared conflicts of interest at public Area Committee meetings, as set out in the terms of reference. The Council managed conflicts of interest in line with its policies. Councillors were not required to declare any interests to other members of the Area Committee in the informal stage one meetings, but did so as good practice.
24. The Council said councillors used information given to them by the authors of outline proposals, as well as local knowledge and information from officers. It said bidders could communicate with their councillors throughout. Bidders could also re-submit proposals to future meetings of the Area Committee if they felt the members had missed or misunderstood important information. The Council also responded to the conflict-of-interest concern Miss X had highlighted.
25. Miss X said the Council was excluding bids at stage one from consideration for funds later, so these were consequential decisions. Miss X said her concern was not whether the Area Committees had followed the rules, but the rules themselves were open to abuse.
26. In its final response, the Council restated its position that no rules had been broken, but confirmed it had passed Miss X’s concerns onto its Monitoring Officer (MO). It said it was not awarding funds at stage one, so it believed decisions to reject proposals at this stage were not funding decisions. It also gave Miss X details of how to make a complaint against a councillor if she wished to do so.
27. Miss X referred her complaint to the Ombudsman.

Analysis

28. As outlined in paragraph 10, the Ombudsman expects local authorities to be open and accountable in their decision-making, to explain the reasons for decisions, and to keep proper records.
29. As mentioned in paragraph 12, the Guide says all meetings of the executive, including its committees or sub-committees, must be open to the public, except in two specific circumstances:
• when public attendance is likely to result in a council breaching a legal duty to keep information confidential; or
• to maintain orderly conduct or prevent misbehaviour at a meeting.
30. The Guide also says members of the public cannot attend pre-briefing meetings with officers.
31. The Area Committees can decide which proposals to develop because they have delegated executive responsibility. The Guide says when a member or officer takes a decision on matters that are the executive’s responsibility, this must be recorded in writing. The Guide says the form of the written record is for the council to decide, but it should include:
• details of the decision and the date it was made;
• reasons for the decision;
• any alternatives considered and why these were rejected;
• details of any conflicts of interest declared by any executive member consulted about the decision; and
• a note of dispensation granted for any declared conflict of interest.
32. The Council says costs, feasibility and wider delivery priorities are considerations at stage one. It should therefore be possible to document why certain proposals are rejected at this stage. Additionally, these decisions have potentially wider implications for the local area. In accordance with examples given in the Guide, it is my view these decisions should be recorded in a manner accessible to the public. I consider this is fault by the Council.
33. I consider this fault has caused Miss X an injustice. In my draft decision, I criticised the Council for not explaining to Miss X how it made its decision about her proposal. In response, the Council has shown it did provide an explanation to Miss X. The explanation addresses some of the injustice caused to Miss X; however, this information should have been readily available and Miss X should not have had to go to extra effort to obtain it. I consider the Council should still apologise to Miss X for the frustration caused, which it has agreed to do.
34. Beyond the injustice caused to Miss X, there is a wider public interest in this case, as the same fault would apply to any other application decided at stage one. Applicants cannot pursue complaints meaningfully without clearly understanding the Council’s reasons for rejection. The Council has agreed to change how it documents its decision making to address this concern.

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Agreed action

35. Following the final decision being issued, and before this year’s stage one meeting, the Council has agreed to:
• change the procedure followed by the Area Committees, to ensure the reasons for rejecting outline proposals at stage one meetings are clearly recorded in a format available to the public, consistent with the principles of the Guide and the Practice.
36. Within four weeks of the final decision being issued, the Council has agreed to:
• provide a written apology to Miss X acknowledging the frustration caused.

Final decision

37. I have completed my investigation with a finding of fault causing injustice. The Council has agreed to recommendations to remedy this injustice.

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Investigator's decision on behalf of the Ombudsman