Lancashire County Council (15 003 889)

Category : Transport and highways > Highway adoption

Decision : Not upheld

Decision date : 01 Feb 2016

The Ombudsman's final decision:

Summary: There was no fault by the County Council in the way it used its powers as a Highways Authority in dealing with the road on a housing estate.

The complaint

  1. Mr Y complains for Mr X and the residents of his estate. Mr Y complains the Council failed to use its powers properly to set up a bond with the developer under either the Advanced Payments Code or a Section 38 agreement to ensure the road on Mr X’s housing estate was built to a standard the Highways Authority would adopt and maintain at public expense. Mr Y says the Council’s failure has left residents on the estate liable for the costs of bringing the road up to standard for adoption.

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The Ombudsman’s role and powers

  1. The Ombudsman investigates complaints of injustice caused by maladministration and service failure. I have used the word fault to refer to these. The Ombudsman cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. She must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3))
  2. If the Ombudsman is satisfied with a council’s actions or proposed actions, she can complete her investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i))

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How I considered this complaint

  1. I have considered the following:
    • Mr Y’s complaint for Mr X to the Local Government Ombudsman
    • The Council’s correspondence with Mr X and Mr Y
    • My correspondence with Mr Y
    • The Council’s response to my enquiries.
  2. I have written to Mr Y and the Council with my draft decision and given them an opportunity to comment.

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What I found

  1. The Highways Act (the Act) at Sections 219 and 220 provides for owners of land on which new buildings are to be built to make payments to the relevant “street works authority”. This applies to new buildings where developers have to put in plans under the Building Regulations. These provisions are known as the Advance Payments Code (APC).
  2. The council acting as the building control authority must tell the highway authority within a week of building regulation approval it has passed the plans. Within six weeks of passing the plans the highways authority must serve a notice on the builder. This notice requires the builder, before beginning any building work, to pay to the highway authority, or secure through a bond, a sum of money to cover the cost of the street works.
  3. The APC is meant to ensure developers deposit enough money with the highway authority to cover the cost of making up the street to adoption standard. Its aim is to ensure house buyers do not have road charge liabilities under the Private Street Works Code if a developer defaults.
  4. Generally the County Council is the highway authority and relevant “street works authority”.
  5. The Act allows for exempt categories, one of which applies if a Section 38 agreement is made. S.38 gives highways authorities the power to enter an agreement with the developer liable to maintain the highways on a development. It does not allow the authority to force a developer to enter an agreement. On agreement the developer deposits a bond for use should they default and fail to complete the highway works. When an agreement is made under S.38 the highway becomes maintainable at public expense.


The Highways Agreement between the County Council and the Borough Council

  1. The County Council made a Highways Agreement (the Agreement) with the Borough Council on 1 July 2003 under Section101 of the Local Government Act 1972 and Sections 2 and 19 of the Local Government Act 2000. This allowed the Borough Council to carry out the County Council’s Highway Authority role for three years.
  2. Under the Agreement the Borough Council agreed to ‘discharge the Relevant Functions in the relevant areas act in accordance with the policies, relevant codes of practice and appropriate standing orders of the County Council’.
  3. Under the Agreement the Borough Council adopted the functions of the “street works authority” and became responsible for ‘administration of the functions under the Advance Payments Code’. This included serving Section 220 notices under the Act.
  4. The Borough Council was the Building Regulation authority.
  5. The Borough Council granted planning permission on 13 June 2005 for the development. The Borough Council granted the developer permission to build three pairs of semi-detached houses and a two storey block of four apartments.

Mr X’s complaint

  1. Mr X bought a house on the housing development in August 2006. He says his solicitor told him there appeared “to be an agreement with the District Council for maintenance of the roads. We have requested a copy of this from the seller’s solicitor”.
  2. Mr X discovered after he had moved into his property there was no signed S.38 agreement and the highways authority had not adopted the estate road.
  3. Mr X and other residents complained to the County Council and Borough Council about the un-adopted road.
  4. Mr X could not progress the complaint with either the County Council or the Borough Council so he asked Mr Y to take his complaint forward in July 2014.
  5. Mr Y explored the circumstances and after some delay formally complained for Mr X to the County Council on 5 June 2015. Mr Y said:
    • The County Council was guilty of maladministration because it had failed to exercise its powers to adopt the road on Mr X’s estate
    • The County Council had failed to serve a S.220 on the developer within the prescribed timescale after Building Regulation approval was given
    • The County Council allowed the developer to start work on the development without an APC bond in place
    • The County Council did not have a S.38 agreement in place with the developer
  6. Mr Y asked the Council to investigate the complaint he made for Mr X.

The County Council’s response to Mr X’s complaint

  1. The County Council responded to Mr Y’s complaint for Mr X on 17 August 2015. It said:
    • Under the Highways Agreement the Borough Council acted as the highway authority including service of S.220 notices as part of the Advanced Payments Code
    • The County Council could not have served a S.220 notice because the Borough Council did not notify it of Building Regulation approval within the six weeks time frame
    • The County Council would not adopt a private street unless it was at an adoptable standard and would not fund highway works to a private street
    • The County Council could use its powers under Section 205 of the Highways Act to bring any road up to adoptable standard under a private street works agreement
    • The County Council had discussions with a developer to get him to bring the road up to adoptable standards. It might consider a private street works agreement though it believed residents were not prepared to support this action.
  2. Mr Y was unhappy with this response and complained for Mr X to the Ombudsman.

The County Council’s response to my enquiries

  1. The Council told me the Agreement between it and the Borough Council in force in 2005 delegated its “street works authority” powers to the Borough Council. It said this included service of S.220 notices as part of the Advanced Payments Code
  2. The Council explained, even if the Ombudsman did not accept the Agreement delegated responsibility for service of S.220 notices to the Borough Council, it could not have served a S.220 notice. It told me the Borough Council did not notify it of Building Regulation approval.
  3. The Council told me the lack of notice about the Building Regulation approval meant it could not follow the statutory procedure and serve the developer with a notice under S.219 in the time scale required. It said legally the County Council could not secure the deposits from the developer for the cost of the roads on the development before construction began.
  4. The County Council explained the Borough Council, and a neighbouring District Council, from where the estate road was accessed decided the District Council would prepare a S.38 agreement with the developer. The District Council also had a Highways Agreement with the County Council.
  5. The District Council prepared a draft S.38 agreement for the developer on 3 January 2006 but neither party signed it.
  6. The County Council explained the draft S.38 transferred to it from the District Council in August 2006 when the Highways Agreement ended.
  7. The County Council says it tried, but could not get a signed S.38 agreement with the developer before he went into liquidation.
  8. The County Council says it is still trying to resolve the issue. It says it is consulting with another developer to see if he would agree to do work on the estate road as well as a potential new access road.
  9. The County Council says until then the development remains un-adopted. It says some issues with the road need correcting before it would consider adoption.
  10. It says S.38 agreements are voluntary and both parties have to agree them. The County Council says without a formal S.38 in place the conveyancing solicitors of each resident should have told potential buyers the highway was un-adopted.
  11. The County Council has suggested it could carry out the works to the road itself, using its powers under S. 205 of the Highways Act to bring any road up to adoptable standard. It says it could adopt the highway through a private street works resolution but this would require the owners of the properties fronting the road to pay the costs. The County Council says owners may object and its understanding is residents are not prepared to support this action.


  1. I believe the Highways Agreement between the County Council delegated “street works authority” to the Borough Council and this included responsibility for S.220 notices under the Advanced Payments Code.
  2. The Agreement could be changed or amended ‘by express agreement in writing by both parties.’ I have seen nothing that shows changes or amendments were made to the Agreement to remove from the Borough Council its highway authority functions. The County Council took those functions back in July 2006, well after the grant of planning permission in June 2005.
  3. The legislation does not allow a council to force a developer to deposit funds under the APC if the six week deadline is breached, as it was in this case. I cannot find the County Council at fault for the lost opportunity to use the APC provisions.
  4. It is not unusual for developers to take a long time to complete a S.38 agreement. Developments can often be almost or wholly complete before reaching an agreement. Given that, an APC is the best method of protecting residents’ interests in circumstances where a developer may default.
  5. Additionally, it should be recognized a S.38 agreement is just that, an agreement. If the County Council could not reach an agreement with the developer it could not set a bond and use it if he defaulted on the development or, as in this case went into liquidation. I cannot find the County Council at fault for failing to achieve a S.38 agreement.
  6. The Ombudsman must take account of all the relevant information available to her, including the purpose of the Council’s powers and what steps individual complainants might take to protect themselves. When he bought his home Mr X, and other residents of the estate, employed solicitors to protect their interests.
  7. The Ombudsman’s lawyers say home buyers can expect the average practising solicitor to do the following:
    • Check to see if planning conditions are discharged;
    • Check to see if there is a private road management scheme or S.38 agreement in place;
    • If the S.38 agreement is not signed, check whether there is an APC bond or payment;
    • If there is no S.38 agreement, APC bond or payment, the solicitor should secure a covenant with the seller requiring him to have the road adopted or withhold a sufficient sum to meet the client’s potential costs.
  8. It seems, from what Mr X has said, his solicitor did not do what was expected of him. That is not the fault of the County Council.
  9. It is not the role of the County Council to spend public money on the private interests of individual residents. There has been no fault by the County Council and I cannot ask it to be responsible for making up the road on Mr X’s estate to adoptable standard.

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Final decision

  1. I have completed my investigation. The complaint is not upheld.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman

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