Summary: Mr B complains about the Council’s handling of the adoption of various stretches of highway on housing estates he has developed. He considers the Council has not kept adequate records and acted unreasonably in refusing to adopt one stretch and in refusing to enter into an agreement to adopt the other part. There was fault in the Council’s record keeping and communication with Mr B. The Council will apologise and make a payment to Mr B.

The complaint

1. Mr B complains about the Council’s handling of the adoption of various stretches of highway on housing estates he has developed. He considers the Council has not kept adequate records and acted unreasonably in refusing to adopt one stretch and in refusing to enter into an agreement to adopt the other part.

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The Ombudsman’s role and powers

2. 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)
3. The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended)
4. 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

5. I considered the complaint and documents provided by Mr B and spoke to him. I asked the Council to comment on the complaint and provide information. I sent a draft of this statement to Mr B and the Council and considered their comments.

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What I found

Legal background

6. A Section 38 agreement (S38) refers to a section of the Highways Act 1980. It is used when a developer proposes to construct a new estate road for residential, industrial or general purpose traffic and will offer it to the highway authority (the Council) for adoption as a public highway.
7. The Council cannot insist a developer enters into a S38 agreement. Once a Section 38 agreement is made, the developer has to operate within a set of conditions, terms and timescales. It is supported by a bond or cash deposit calculated by the highway authority and based on the works proposed. This bond or cash deposit can be called upon if the developer goes into liquidation or otherwise defaults on their responsibilities.
8. S37 of the Highways Act provides that someone can give notice to the highway authority when they wish them to adopt a highway. If there is a dispute the matter can be considered by the courts.

Outline of events

9. Mr B owns a property development company. He has developed a number of sites in the Council’s area. This complaint concerns two sites and in particular the adoption by the Council of the estate roads. The first site 1 was largely finished in 2016 and the Council accepted the roads on to maintenance in August 2016. In July 2017 the Council said it would return just under £36,000 it was holding in respect of highway works and retain £10,000.
10. The second site, site 2 has been developed over the course of the last five years or so. A condition on the planning permission required that development could not start until a fully dimensioned layout plan showing road drainage, street lighting and landscaping, together with longitudinal section of the new road and details of construction of the carriageway, footpaths, accesses had been approved by the Council. The Council approved the submitted plans in September 2010. There was no S38 agreement in place. Work proceeded on the site. In August 2015 part of the road was tarred. The officer who was dealing with it at the time said he was unable to attend but if Mr B kept delivery tickets that would be sufficient. In January 2017 a new officer became involved in the site. He said to Mr B he had little information about either of the sites.
11. Over 2017 and 2018 there was correspondence between the Council and Mr B. The Council said it intended to issue a draft S38 agreement for site 2 but asked Mr B for information including copies of plans. By the end of 2018 the Council said it would not enter into a S38 agreement for site 2. The reasons it gave were:
• Outstanding Fees – Mr B had not paid the necessary fee;
• Engineering Drawings – it said Mr B had not provided the necessary drawings despite the Council’s requests;
• Materials Testing – the Council said Mr B had not provided test results for any of the materials used.
12. Mr B complained. He said he had repeatedly provided the drawings and had complied with the Council’s requests as to the materials used as the development progressed.

Analysis

Site 1

13. Mr B provided me with copies of the information he holds in respect of the S38 agreement for site 1. This is over 20 years old and is with the predecessor authority. The Council considers that one of the plans has no legal status as it has not been signed and sealed. It says it is willing to consider adoption of the roads and footpaths subject of the agreement subject to the satisfactory completion of remedial works.
14. It is not for me to decide on the legality of the agreement and plans; that would be something that would have to be determined by the courts. Mr B has a legal agreement with the Council about the extent of the roads that are to be adopted. The way of resolving any dispute about the adoption of the roads covered by the agreements is in the courts; it is not a matter on which the Ombudsman can come to a view.
15. I recognise that in its correspondence with Mr B the Council did ask him to provide plans about the S38 agreement but it has always been open to Mr B to take legal action if he considers the Council is not complying with the terms of the agreement he has. This means I am not going to consider this point further as that is the appropriate remedy for Mr B to use.

Site 2

16. There is no dispute there is no S38 agreement in place. Mr B’s position is that he has proceeded as the Council requested over the course of the development, has provided the information the Council asked for at each stage and the Council has now changed its position. The Council disputes this. There are three key issues here, the plans, the inspections and materials testing and the payment of the fee.
17. It is clear Mr B has provided plans to the Council over the course of the development but the Council says it requires a full set of engineering drawings which have not been provided. In February 2017 Mr B’s agents sent plans to an officer. He replied saying there would need to be some minor revisions to the colouring of the plan. Mr B’s agents sent the officer a further plan in July 2017. The Council replied to say there needed to be some further minor changes and Mr B’s agent sent a revised plan on 10 July. The Council has no record of that email but I have no reason to think it was not sent. In February 2018 a different officer asked for “all plans associated with this phase”. By July it was clear that the Council wanted engineering plans.
18. I recognise Mr B provided plans to discharge the planning condition (in 2009) but this was not the same as providing plans to the Council to meet the highway requirements. I would not, in this situation, expect the Council to use plans submitted for one purpose for another. Nor have I got clear evidence that Mr B has provided the plans the Council requires in exactly the form requested. But Mr B and his agents have provided plans to the Council and the Council was not clear about exactly what it needed until July 2018. It should be a simple matter for Mr B to provide electronic copies of the plans direct to the Council. The remedy I propose below reflects any extra time and trouble Mr B has been put in submitting extra plans.
19. The Council says the fee is necessary and must be paid before it will enter into a S38 agreement. Mr B considers that the Council has not provided adequate detail about how the fee is calculated. He believes it may be incorporating parts of the road covered by site 1.
20. The other sticking point is over the inspections and testing of the highways that have been laid. Mr B’s records show he had contact with officers over the course of the development. In particular there is a record of contact in 2015 about tarring of the road. At that point the officer said he was unable to inspect but it would be sufficient for Mr B to keep the delivery tickets. In August 2017 the Council said it had insufficient notice of the highway works but Mr B should arrange testing of samples taken from deliveries and that core samples may be needed. Later the Council required more testing and says the testing by the firm who laid the tarmac is not satisfactory as they are not independent. Mr B disputes this as he says the testing part of the company is an independent laboratory. He considers the Council is biased against him and imposing requirements on him that it does not on other developers.
21. As the Council has said the entering into a S38 agreement is voluntary on both sides but there should not be fault in the Council’s decisions and approach. There has been fault in the Council’s record keeping and in its communication with Mr B. An officer who was dealing with the site was on long term sick leave and there are no documentary records of site inspections or involvement in the site. The Council should have a record of its dealings with a site that can be accessed by all officers. When other officers took over the matter they said they did not have records and were asking Mr B for his assistance. These faults delayed matters and caused confusion for Mr B as to what was required. This will have increased the time and trouble Mr B was put to and the Council should pay him £500 in recognition of that.
22. The position now is that the Council is willing to enter into a S38, subject to Mr B paying the required sums. Mr B considers the Council’s approach is unreasonable and wrong. It is not for me to determine the detail of the S38 agreement. If Mr B considers the Council is being unreasonable in its requirements then he does not have enter into the agreement. He can proceed based on the provisions of S37 of the Highways Act. He can serve notice on the Council and if it refused to adopt the road then he could appeal the to court. I consider it is reasonable for him to use that route and it would be the proper way to test whether the road should be adopted. As Mr B has this route available to him which I consider it would be reasonable for him to use I am not going to consider whether there is any fault in the Council’s requirements.

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Agreed Action

23. The Council will apologise to Mr B for the inadequate record keeping and pay him £500 in recognition of the injustice to him arising from that failing. It should do that within one month of the final decision.

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Final decision

24. There was fault in the Council’s record keeping and communication with Mr B. The Council should apologise, pay for the cost of a set of plans and pay Mr B £500.

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Investigator's decision on behalf of the Ombudsman