OMBUDSMAN WATCHERS RESOURCE CENTRE

Mr and Mrs Wain’s Report

Photos

A photo gallery of one of the houses mentioned in this report

Supplementary Reports
The Local Government Ombudsman's(LGO) Report

Parliamentary Ombudsman's (PO) Report

European Court of Human Rights (ECHR) Report

Examples of incompetence of Council in other areas

Summary

1.The events of 2001 to 2003

2.Evidence that the Council did not act in good faith in the negotiations in 2001 over the purchase of the two houses

3.The Council renegued on its promise to pay 10% of property valuation plus £1,500 for upheaval allowance

4.The Council refused to take into account the house price inflation that occurred between 2001 and 2003

5.The Council refused to take into account our lost rental income

6.We were subjected to economic duress by the Council

7.The Council’s allegation that one of our houses was unfit for human habitation

8.The Council did not follow its own rules for acquiring properties voluntarily

9.Details of the losses we suffered as a result of the Council’s actions

10.Comments on the report of the Local Government Ombudsman (LGO)


1. The Events of 2001 to 2003

1.1 On 19 January 2001 we received from the Council Requisitions for Information under Local Government (Miscellaneous Provisions) Act 1976 asking us to state in writing the nature of our interest in Nos. 8 and 32 Berkeley Street, as they were starting clearance procedures, [supplementary document 1]. These two properties were let to students and provided us with half of our retirement income, the other half being provided by the rent from two other properties we owned. We had enjoyed the rent from these four properties for a number of years.

1.2 An Estate Agent acted on our behalf to agree the sale of Nos. 8 and 32 Berkeley Street to the Council, [supplementary document 2]. On 31 August 2001 we received a letter from the agent informing us that a sale had been agreed [supplementary document  3] The Council has agreed in writing that a verbal sale agreement was made [supplementary document  4]

1.3 We intended to use the sale proceeds from Nos. 8 and 32 Berkley Street to buy two houses to replace those two houses for the coming academic year, and we began actively seeking replacement properties. On the basis of the Council’s offer [supplementary document 3] we put in an offer on a house we had viewed at 37 Cotesheath Street. This offer was accepted [supplementary document 5] and it was anticipated that completion of the sale to the Council and completion of purchase would come together, and we would therefore have no need for a bridging loan. This did not come about because of the Council’s actions; however we were hopeful that there would only be a short delay and so took out a private loan for a short period and bought the house at 37 Cotesheath Street.

1.4 There followed a long period of unanswered letters from my agent to the Council [supplementary document  6] My agent had to resort to delivering letters by hand to the Council, as he could not get acknowledgement. We were feeling anxious as the new term was not far away.

1.5 We later discovered that the Council did not in fact have the money to pay for the houses.

1.6 There was no indication from the Council at this time of how long it was going to be before we would be paid. We could only assume it would be a minor delay. If the Council had been upfront and said right away that they were suspending payments, instead of failing to communicate properly, and in particular failing to reply to letters (see above supplementary document  6) we would certainly have let the houses for another year. Our tenants were willing to stay, and we would have stopped searching for replacement houses

1.7 During this period the lender asked for the loan repayment, as it was now a far longer period than we had agreed. We had to sell our remaining houses (which were situated in another area), because we had now been 20 months without income from Nos. 8 and 32 Berkeley Street.  Our income had been taken away and our assets frozen. We could neither insure nor let the houses, as the area was blighted. We had various break ins. The police advised us for our own personal safety not to enter the properties, as squatters and drug users had moved in. The Council then brought out a priority list for payment. (a priority list that was later to be proved unlawful) We were not put on that list; negotiations for other properties took priority over negotiations for ours.

1.8 In December 2001 we lodged a complaint against the Council with the Local Government Ombudsman (LGO):  [supplementary document  7]

1.9 In January 2003 our agent informed us that the Council had contacted him to say they were now ready to buy our houses at the price offered in August 2001 but excluding the (10% of property valuation and £1,500 for upheaval allowance).

1.10 On Jan 27th 2003 we wrote to the LGO [supplementary document  8] to show our concern at being directly approached by the Council, as we thought that the LGO had been acting on our behalf for the past year while investigating the Council’s actions. The LGO’s reply via my MP [supplementary document  9] was that the price offered was of no concern to the LGO; it was a matter for our advisers. We also complained to our MP about being obliged to sell at a grossly unfair price because we only had one bidder [supplementary document  10]

1.1 We refused the Council’s offer for each house, as we now valued these houses far higher [supplementary document  11] Our valuation was proved by irrefutable statistical evidence (see below) to be correct. Our agent negotiated a further sum for each house, which we again refused. He then came back with a further offer, the Council’s final offer. Anxious and under duress, desperately short of money, We had no alternative but to accept under protest (see above supplementary document  10 )   There was only one buyer, with the threat of compulsory purchase in the background. What else could we do? we accepted the offer subject to additional compensation by the LGO [supplementary document  12]

1.12 The Council did not provide us with information about what a compulsory purchase process would involve, nor about the rights of those affected by their plans, nor an indicative timetable of events.

1.13 The implementation of the Council’s clearance policy left the clearance area derelict and our properties worthless, and we did not receive adequate compensation for the reduction in the value of those properties.

1.14    The LGO found that there had not been maladministration on the part of the Council paragraph 68 [supplementary document  13]   (a finding which we find bizarre). The LGO did not investigate any of the items 2, 3,  4, 6, 7, and 8 listed in the Summary above and with regard to item 5 (lost rental income) did not dispute that we had suffered from lost rental income, but said that any compensation to us for that loss would be unfair to citizens who had not complained ! paragraph 66. [supplementary document  14]

1.15 As the Council officials had pointed the finger of blame for the mess that had been created at government officials at the Government Office for the West Midlands (GOWM)  paragraphs 26 to 31[supplementary document  15] we asked the Parliamentary Ombudsman to investigate GOWM. The GOWM officials promptly put the blame back on the council officials paragraphs 7 and 8 [supplementary document  16]

1.16 The LGO stated that our losses were real and significant and arose through no fault whatsoever of our own. Summary. Finding. [supplementary document  17] No one, including the GOWM and the Parliamentary Ombudsman, disputes that statement. Nor can anybody dispute that the crushing financial losses we suffered were the consequence of actions/ inaction by officials: they were not occasioned by an act of God.

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2. Evidence that the Council did not act in good faith.

2.1 On 31 August 2001, after negotiations with our agent, the Council put in an offer for each of the two houses we owned in Berkeley Street [supplementary document  3] There is reason to believe that the Council was not acting in good faith in this matter, because by August 2001 the Council must or should have known that they did not have the money to make that offer.

2.2 The Council admits that they knew in December 2000 that it would not have the money to execute its proposed clearance scheme paragraph 21 [supplementary document 18] and, as the Local Government Ombudsman pointed out, should indeed have reacted to the situation in July 2000  paragraph 58 [supplementary document  19] GOWM have stated that in November 1999 and May 2000 the Council were given information about the amount of likely available funds and that the processes and timing of the annual funding allocations had been in place for some years and that the Council therefore would have been very familiar with those processes paragraphs 22, 23 and 24  [supplementary document  20]

2.3 The Council have made two separate excuses in an attempt to exculpate themselves from the trouble they caused by offering to buy the houses when they did not have the funds to buy them. Firstly they have attempted to blame GOWM for not informing them that there was not the finance available to buy the houses  paragraphs 18 to 34 [supplementary document  21] That excuse has been dealt with in the paragraph above. If the Council knew in 2000 that they did not have the money to buy the houses, they had even more reason to know in August 2001.that they did not have the money to buy the houses.  Secondly they have attempted to attribute the mess they created to the “rush to sell” paragraphs 15 and 35 [supplementary document  22]

2.4 The “rush to sell” excuse simply does not stand up to a close examination of the dates. Please see the final sentence of paragraph 35 of the LGO Report (supplementary document  22 above). The Council admit that they knew or should have been aware of the problem in April / May of 2001, and that they were aware of the real demand in June 2001. Yet they made an offer for our two houses on August 28 2001 – four months after they should have been aware of the problem, and at least two months after the real demand had become apparent.

2.5 The LGO himself acknowledges in the first sentence of paragraph 55 of his Report [supplementary document  23] that the “rush to sell” was not a sufficient explanation of the mess that occurred; it occurred after and was a consequence of the “the truth coming out”.   By “the truth” we assume that the LGO means that the Council had made a gaffe in its financial estimates.

2.6 We are in any case sceptical of the “rush to sell” excuse for the following reasons


2.7 The excuse about the rush to sell obfuscates the real issue of the failure of the Council to take action in December 1999 or July 2000; and the failure of the council officials to assess correctly the magnitude of the rush to sell and take measures to deal with it are themselves examples of maladministration. It was the Council’s responsibility to make proper financial provision for all the people who were able to claim compensation.

2.8 There are more comments on “The rush to sell” excuse in section 10 below.

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3. The Council renegued on its promise to pay 10% of property valuation plus £1,500 for upheaval allowance.

3.1 The sale price agreed in August 2001 for each of the two houses in the clearance area was market value plus 10% of property valuation plus £1,500 for upheaval allowance. [supplementary document  26] Neither the LGO nor the Council has at any time disputed that the promise of 10% of valuation plus £1,500 for upheaval allowance was made. The promise of 10% of valuation plus upheaval allowance was a factor in us accepting the price offered in August 2001, which at the time we considered too low. We did not pursue the matter at the time because we had nothing in writing and because we were anxious to get on with the purchase of the property at Cotesheath Street.

3.2. The losses described above are quite aside from the loss I sustained through the Council ignoring the house price inflation that took place between August 2001 and February 2003 and ignoring the loss in rental income that I describe in the following sections. Naturally we objected to the Council breaking its promise, but to no avail [supplementary document  9] The LGO did not mention anywhere at all in her Report the failure of the Council to honour its promise, although the reneguing by the Council on its promise was stated as a complaint in the LGO’s letter of 4 January 2002 [supplementary document  26] which was copied to the Council.

3.3 When we took this matter up with the Council in August 2004 [supplementary document  27] the Council did not dispute that we had been promised 10% of valuation plus upheaval allowance, and instead produced the excuse that such a payment would be illegal.[supplementary document  28] If the Council made an offer that was illegal, that is the Council’s responsibility. If the Council made an offer of 10% of valuation plus upheaval allowance that induced us to accept their price in 2001 and then failed to make good on that offer that is the Council’s responsibility as well. 

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4. The Council refused to take into account the house price inflation that occurred between 2001 and 2003

4.1 Although the price offered in January 2003 was based on the price offered in August 2001, the Council ignored the vast house price inflation that took place between those two periods.

4.2 The Council offered 3.4% more for the houses in February 2003 than it had offered in August 2001. Between August 2001 and February 2003 house prices in the West Midlands rose by 37.8% (source Nationwide Building Society Index of UK House Prices for the West Midlands); if we had been treated fairly, we should have been able to purchase houses of a value equivalent to that of the houses that the Council had acquired. However, we simply could not go into the market in 2003 to replace our houses with two of a similar value, because the Council had deprived us of one third of the value of our properties.


5. The Council refused to take into account our lost rental income

5.1 The Council did not compensate us for the loss of rental income. Please see section 9A below and [supplementary document  26] The LGO gave as an excuse for the Council not compensating us for lost rental income that such compensation would have been unfair to citizens who had not complained!  paragraph 66 [supplementary document 14] and Section 10 below)

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6. Economic Duress

6.1 In January 2003 the Council offered to buy our houses at the price offered in August 2001 but excluding the 10% of property valuation and £1,500 for upheaval allowance). We refused this offer as we now valued these houses much higher. [supplementary document  11] The Council made a further offer for each house which we again refused; the Council then came back with still a further offer. Anxious and under duress, desperately short of money, we had no alternative but to accept under protest. [supplementary document  10] There was only one buyer, with the threat of compulsory purchase in the background. What else could we do?

6.2 We had no alternative but to accept the Council’s grossly inadequate offer for our properties because the Council exploited our grievously weak bargaining position. The Council knew that we had no alternative but to accept the offer made in January 2003 because of the situation we were in, and which they had created, and because they were the only possible buyer.

6.3 The Council was fully aware of our desperate financial situation, which was entirely due to their failure to honour their promise of August 2001. [supplementary document  29] They were also aware of the effect of the stress on my wife’s and my health caused by the Council’s actions.

6.4 On 24 September 2001 the Council was warned very clearly of our pressing financial problems caused by their actions and of the consequent mental stress [supplementary document  30] Yet on 23 November 2001 the Council resolved that priority for the purchase of houses by the Council was to be given to residential occupiers item 55 [supplementary document  31] Our names was accordingly excluded from the list of people on the priority list for house purchase, and we were given no date at all for the purchase of our properties. The result of this action of the Council was that our financial plight and our anxiety were made worse - facts of which the Council was aware, as they must have been aware of the worsening of our already weak bargaining position. We question the reasonableness of the Council’s decision to exclude us from the priority list. In two vital respects our financial position as landlords was worse than that of the residential occupiers: We had lost our income, and our assets had been frozen.

6.5 On 4 December 2001 a letter was again sent to the Council emphasising our financial hardship and its effect on our health [supplementary document  32] That letter (as well as another sent to the Council on 2 January 2002, which also stated our financial and health problems) was sent and received while the acquisitions programme approved by the Council in November 2001 was still being formulated. The Council in fact only approved the programme of acquisitions on 14 February 2002. Item 83 resolution ii [supplementary document  33]

6.6 In April 2002 we supplied the Council, as requested, with medical evidence of the effect on the health of my wife and myself of the stress caused by the Council’s actions. In January 2003 – nine months after the submission of the medical evidence and sixteen months after informing the Council of our financial plight – we received payment for our properties. We can see no reason why, if the Council had acted promptly, we could not have received payment very much sooner than we did. Our bargaining power had been virtually eliminated because of the dilatory attitude – and delaying tactics of the Council.

6.7 Aside from its awareness of the effects of our loss of rental income, the Council was also fully aware that, because it had in effect frozen our assets, we desperately needed the purchase monies from the sale of the houses to purchase other properties to make up for the lost rental income para’s.2 and 4 [supplementary document  34] or simply to live see paragraph 13 [supplementary document  35] and LGO Report Summary paragraph 2).

6.8 Council officials withheld information from us about money allocated by the Council for people such as ourselves who were suffering from financial hardship or health problems. We only found out about the provision of £300,000 for this purpose item 55 paragraph 2 in August 2005 [supplementary document  31]. The provision of £300,000 for people suffering from financial hardship or health problems was deliberately omitted from the Council’s statement of the decision of the Executive Committee dated 9 January 2002 [supplementary document 37] That letter gave the clear impression that only residential occupiers were being considered for priority. We were not sent the questionnaire sent to other applicants about their needs. Landlords such as us, who had not been informed of the £300,000 available and who had not been provided with a questionnaire on which to state their needs, could only conclude that they were not being considered for payment for months, if not years, ahead. Indeed that was the impression created by the Council’s letter of 7 March 2002 paragraph 3) [supplementary document  38] The correct and reasonable procedure would have been for the Council to inform landlords and others of the £300, 000 provision and then send them a questionnaire to enable the officials to establish the degree of financial hardship and medical difficulties from which they were suffering. Indeed, how was the Council “to consider individual cases on their merits” if it did not make inquiries about those individual cases? The failure of the Council to inform us of the true position served to turn the screw of the pressure on us and to heighten the mental and economic duress to which we were exposed.

6.9 We protested to the LGO, to my agent and to my MP about the grossly unfair settlement that had been forced on us against our will by the Council. When the LGO said he was investigating the Council’s broken promise of August 2001 and the hardship created by our loss of rental income and the house price inflation [supplementary document  26] we had assumed in our naïveté that he was investigating the Council’s broken promise of August 2001 and the hardship created by our loss of rental income and the house price inflation. However, when we presented him with evidence that the Council was continuing to break its promise of August 2001 and to ignore the hardship created by our loss of rental income and the house price inflation [supplementary document 8] the LGO was not in the least interested in our protest [supplementary document 9] we also complained to our MP about being obliged to sell at a grossly unfair price because we only had one bidder [supplementary document 10] 

6.10 The Council did not provide us with information about what a compulsory purchase process would involve, nor about the rights of those affected by their plans, nor an indicative timetable of events. Our estate agent was not acting for us in an advisory capacity with regard to compulsory purchase procedures or connected matters. He was acting for us on normal estate agent business; he put pressure on the Council to complete the sale when we asked him to, as any estate agent would.

6.11 As for the threat of a compulsory purchase order (CPO) we were never informed by the Council of what our rights would have been in respect of a Lands Tribunal nor of any other rights should we have had in the case of a CPO. Also, at the time the Council had not applied for a CPO, and it would have been months, if not years, before a CPO had been implemented and we could have exercised any right of appeal we might have had against a Council decision under a CPO. we could not have afforded to wait that long.

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7. Allegation by Council that one of our houses was unfit for human habitation.

7.1 We have already given evidence of unconscionable actions on the part of the Council. A particularly stark example of an unconscionable action on the part of the Council is their utterly unfounded allegation that one of our houses was unfit for human habitation.

7.2 The Council alleged that one of our houses was identified as legally unfit for human habitation when inspected in 2000 this utterly unfounded and offensive allegation led to more stress for us, particularly for my wife, who took pride in the houses. We had agreed between ourselves that we would not have houses that we would not be prepared to put our own children into. We have letters from students’ parents congratulating us on the standards of our houses [supplementary document  39] and Nos. 8 and 32 Berkeley Street both held a Premium rating from the University. We have bills for the installation of central heating throughout, double glazing throughout, new flooring, doors, kitchen units, and carpeting throughout: hardly a basis for a house unfit to live in. We have bills totaling more than £7,400 for work done on No. 8 Berkeley Street, including installation of central heating and double glazing.

7.3 This is not the only occasion on which the Council has been caught making unfounded and damaging allegations about other people’s properties in its own interest. Please see [supplementary document  40] 

7.4 We challenged the allegation of the Council. The LGO ignored our letter, and the Council has never produced for us any proof to support their allegation.

7.5 The Council had never contacted us about the matter.  If the Council considered that the house was unfit for human habitation, should they not have issued a notice in accordance with section 352 of the Housing Act 1985? The allegation was based on an inspection made by the Council in 2000. The Council knew that the houses were occupied and would be until June 2001, so that the Council allowed people to live in a house that they alleged was unfit for human habitation for more than six months after they decided it was unfit for human habitation.

7.6 If the house was unfit for human habitation, as the Council alleges, would that factor have affected the price that the Council offered for it? I should have thought that the Council would not have offered the same price for both houses if one was unfit for human habitation. Do the normal rules of the market not operate in these cases?

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8. The Council did not follow its own rules for acquiring properties voluntarily. The Compulsory Purchase Order (CPO) compensation code for valuation was not applied in my case.

8.1 The Council has stated that in acquiring properties voluntarily it makes valuations on the basis of a confirmed CP paragraphs 9 and 17 [supplementary document 41] We have assumed that "voluntarily" means an agreement made in the absence of a CPO and that it is the Council’s policy, when acquiring properties voluntarily, to apply the principles applied under the law to compulsory purchase in relation to property valuation.  In our case the Council most definitely did not follow the rules which are applied when an authority acquires property when a CPO has been confirmed.

8.2 According to Denyer-Green (Compulsory Purchase and Compensation edition 7, 2003, chapter 12) “the statutory and judicial rules concerning market value seek to establish a price that the owner ....would have obtained had there been no compulsory purchase”. Those statutory and judicial rules were disregarded by the Council in our case.

8.3 Any person affected by compulsory purchase has “the right to be put, so far as money can do it, in the same position as if his land had not been taken from him. In other words, he gains a money payment not less than the loss imposed on him...” (Scott L. J. in Horn v. Sunderland Corporation. [1941] 2 KB 26). The loss imposed on us by the actions of the Council in the acquisition of our properties against the background of a threat of compulsory purchase was tens of thousands of pounds greater than the compensation we received (see sections 1, 3, 4 and 5 above and section 9 below).

8.4 Another rule is that the value of the land should be the amount which the land would realise in the open market if sold by a willing seller. We were most certainly not treated as willing sellers in the negotiations over the price we received for the two houses (see sections 1 and 6 above). We understand from Denyer-Green (op. cit. p. 182) that “The value of the land shall....be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise.” We were not willing sellers. We anxious sellers. (op. cit. p. 184)

8.5 We have also read that “in compulsory purchase the vendor is to be regarded as a ‘willing seller’ at the time of assessing compensation, and the price is assessed according to the state of the market at that time.” (op. cit. p. 182. Emphasis added). The state of the market for houses in the West Midlands, and particularly the house price inflation that had taken place in that market, were quite simply ignored by the Council. (Please see section 9 below.)

8.6 Under the law relating to compulsory purchase there is an obligation on the local authority to negotiate in good faith, and damages can be awarded against an authority that does not negotiate in good faith (op. cit. pp. 61 and 96, quoting Bremer v. Haringey London Borough Council [1983] ChD). Please see section 2 above.

8.7 Most revealing is the method the Council used when assessing the value of the two houses in 2003. They at first made an offer for each of the two houses, and then offered a final figure. In other words they exploited their position as a single buyer. They did not consider in their calculations the market value of the houses and what they would have been worth in the absence of a threat of compulsory purchase. In fact, we are not sure that they made any calculations at all. The evidence is that they just concentrated on exploiting their position as a single buyer.

8.8 The failure of the Council to follow its own rules in the acquisition of my properties was not investigated by the LGO and is not a part of his Report.

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9. The Losses We Have Suffered as A Result of the Actions of the Council

A. The Financial Losses

9.1 On my retirement in 1994 we used our savings to buy four houses in Stoke-on-Trent. The rents from these four houses were to provide us with an income (pension) for the rest of our lives. This they were doing successfully until January 2001, when the Council set out on the procedure for the purchase of the houses that lay in the clearance area. We were deprived of income from these two houses (which income represented about one half of our income from all four houses) and was not paid for them until April 2003. In October 2002 we had to sell the two remaining houses, as our income had been almost halved because of the actions of the officials, we had to use the money from the sale of those two remaining houses to replace the income we had lost. We were now in a situation where, through no fault of our own, we are left with no income. We give below an outline of the financial losses we have suffered.

9.2 In the first half of 2001 we were asked by the Council to sell the two houses in the clearance area, and sale prices were agreed in August 2001. Although the Council approached us to sell the houses, and although the Council agreed a figure for the purchase of the two houses, the Council did not in fact have the money to buy them. We could not let out the two houses because the area in which they were situated was allowed to fall into a state of disrepair after it had become known that it was a clearance area. Thus, because of the officials’ actions we were deprived of almost half our income and half our capital.

9.3 The two houses we owned that were not in the clearance area were sold in October 2002. They were sold because, having lost our income from the houses in the clearance area, we needed the money to live.

B. The Effect on the Health of My Wife and Myself

9.9 We had to watch innocent, frustrated and powerless as the major element in our livelihood was taken away by the Council’s failure to inform us of what was happening, to honour its commitment to buy the houses and later to offer us a reasonable price for them. Inevitably the incessant worry, sleepless nights, the almost unbearable stress took their toll on our health.    [supplementary document  30]

9.10 The Council told us that if we provided evidence that our health was being affected, we would be a priority for payment. As we were already receiving treatment from our doctor for the stress we were under, we had no difficulty in providing the requested evidence for both for my wife and myself. The evidence we gave was ignored, we are still receiving treatment for the stress caused by the Council’s actions.

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10. Comments on LGO and Parliamentary Ombudsman Reports
 
10.1 Our view is that whatever the view of the LGO about the degree of responsibility of the Council for the financial mess in 2001, the Council was under an obligation to compensate us adequately for the loss of our property and income caused by the implementation of its clearance scheme.

10.2 Our view appears to be in accord with what the LGO said in the second paragraph of his letter of 4 February 2003 to my MP [supplementary document 9] The problem with the LGO’s letter of 4 February 2003 is that it is inconsistent with his letter of 4 January2002 [supplementary document 26] in which he states that he is enquiring into the matters which he claims in February 2003 are of no interest to him. In other words the LGO changed his mind on the crucial issue of what his role was in this matter in the course of his investigation.

10.3 There is a fundamental conflict between the two reports. The LGO devoted a large part of her report to the arguments advanced by the Council officials that GOWM was responsible for the financial mess over the clearance scheme  paragraphs 20, 21, 25, 26 and 28 to 34 [supplementary document 42] In paragraph 57 the LGO supports the Council officials’ arguments, as he does in the second two sentences of paragraph 58. Please note the phrase “for reasons quite beyond its control” in the third sentence of paragraph 57 [supplementary document 43] The Parliamentary Ombudsman flatly rejects those arguments paragraphs 7 and 8). [supplementary document  16]There is thus a fundamental conflict between the two government bodies. We do not know which of the two government bodies is to be regarded as superior, but as the Parliamentary Ombudsman’s office has been in existence for longer than the LGO, we should have thought the Parliamentary Ombudsman’s finding would be at least as important as that of the LGO.

10.4 If the Parliamentary Ombudsman’s report is accepted, there is not very much of substance left of the LGO’s report. The LGO’s defence of the Council rested on the allegation that GOWM was responsible for the financial mess – an allegation demolished by the Parliamentary Ombudsman – and the “rush to sell”. The “rush to sell” excuse turns out to be suspiciously weak on examination.

10.5 It is far more than likely that the “rush to sell” was a consequence of the Council’s miscalculations over the funding than an independent phenomenon that came like a bolt from the blue: please see the comments on the “rush to sell” argument in section 2 above.

10.6 It is interesting to match the Council’s assertion, accepted uncritically by the LGO, “that the rush to sell voluntarily to the Council would have given rise to the problems even if the Council had received the hoped for level of funding” LGO Report paragraph 16 second sentence - repeated uncritically by the LGO in paragraph 56 with the figures as they can be gleaned from paragraphs 21, 38 and 39 of LGO report. [supplementary document  44] Those figures show that the spend (on house purchase in the clearance area) in fiscal 2001/02 was £5.2M, when the GOWM allocation for the private sector was £4M and when £1.2M came from other (Council) sources. (Actually only £3.2M was budgeted for in 2001/02 and so £2M must have come from other sources – but we do not think those facts alter the basic argument.) £3.4M was available for spending in this area in 2002/03. If the Council had received the £7.5M on which its plans were based and added to that figure £1.2M, it would have had at its disposal in 2001/02 a sum of £8.7M – which is more than the amount it spent in 2001/02 (£5.2M) plus the amount allocated in 2002/03(£3.2M), by the end of which period the Council seems to have cleared at most, if not all, of the backlog of the “rush to sell”. From the LGO figures the sum of £8.2M had been enough to fund the purchase of all the complainants' houses: yet the Council are claiming that £8.7M would not have been enough.

10.7 Another factor which indicates that a sum of £8.7M would have been sufficient to deal with almost any contingency is that, according to the figures given in paragraphs 21, 38 and 39 of the LGO Report the sum of £8.7M for one year would have been more than half of the total (£15.4M) to be spent over a six-year period!

10.8 The LGO has not given any figures on the extent to which the Council had cleared up the backlog caused by the “rush to sell”, and of course refuses to divulge any figures or papers connected with his enquiry.

10.9 We are not knowledgeable on matters of local government finance, but I wonder if there is a reason why, if the Council could find an extra £2M (£5.2M less £3.2M) in 2001/02, it could it not find another £2M or £3M to clear the backlog of the “rush to sell”. The Council was responsible for this mess, and it should have been the Council, not innocent people like ourselves, who picked up the bill for its incompetence. Interestingly, the minutes of the Council Executive Committee Meeting of 23November 2001 [supplementary document  36]  which show at item 55 the report on housing clearance also show (at item 62) a sum of £1.4M set aside for a failed legal action for arbitration costs until a final figure could be agreed. The failed legal action in the Cultural Quarter Project fiasco, described in [supplementary document 45] had actually racked up a bill of £8M, and the Project itself had cost the taxpayer £15M. In his damning report on this Project the District Auditor makes the point that the overspend (a mere £15m) affected the Council’s ability to deliver vital front-line services. The Council’s inability to find sufficient funds to cover the mess it created over the housing clearance is not unassociated with the Council’s squandering of its funds elsewhere?

10.10 Among the criticisms of the LGO Report are the following:

10.11 There is a stark contrast in presentation between the Parliamentary Ombudsman’s report and that of the LGO. The former is clear cut and decisive, with undisputed factual evidence, while the LGO report is indecisive and lacking in conviction vide Appendix 2 paragraphs 58, 60, 62 and 65.

10.12 In paragraph 66 the LGO seems to be advancing the proposition that complainants who have not been given proper compensation should continue to be denied compensation because other victims of the Council’s policy have not complained. Does that proposition not fly in the face of justice and the law?

10.13 In the third and fourth sentences of paragraph 89 of the October 2005 LGO Report on an Investigation into Complaint against Norfolk County Council dated 5 October 2005 [supplementary document  46] the LGO condemns the use by Norfolk County Council of the very argument which the LGO himself uses in paragraph 66 of his June 2003 report on my case paragraph 66 on p.14). [supplementary document  14]

10.14 When we signed the agreement with the Council for the sale of our properties [supplementary document 12] we had a reasonable expectation that the LGO would examine our case logically & fairly: his use of the argument he deployed in paragraph 66, which contradicts the argument used in the Report on an Investigation into Complaint against Norfolk County Council, indicates to us that he was not examining our case logically and fairly.
 
10.15 Paragraph 89 of the 2005 Report [supplementary document 46] states that “...the Council has to be in a position to have full regard to individual circumstances and to respond accordingly”. This the Council could hardly do in our case because the officials purposely excluded me from the questionnaire they used to establish priorities. (Please see 6.8 above.)

10.16 In paragraph 66 the LGO mentions only loss of rental income and ignores the other losses, of which she had been made fully aware [supplementary document  26]

10.17 In paragraphs 41 to 52 of the Report the LGO failed to make this vital distinction between ourselves and the other complainants: the other complainants had not been offered a price for their properties, whereas we had and we had accepted that offer.

10.18 The scheme described in paragraph 37 by the LGO does not match the scheme described in the Council’s letter dated 9 January 2002 [supplementary document  37] the subtle, but significant, difference is the LGO’s use of the word “applicants”, while the Council uses the word “residential occupiers”. The scheme described in the third sentence of paragraph 37 related to residential occupiers and not to property owners such as ourselves. [supplementary document  36] and paragraph 6.8 above.) Presumably the LGO based his statement on item 55 of the Executive Committee minutes of 23 November 2001  and did not know of the Council’s withholding the information about the consideration of the hardship of all applicants expressed in minute 55, although we presented him with the situation as it had been presented to us by the Council in a letter of the 4 October 2002. The LGO’s assertion that we were paid under the scheme he describes is inconsistent with the Council’s letter of March 2002 (four months after the November 2002 Executive Committee Meeting) [supplementary document  38] informing us that our property had been provisionally included in the programme for 2003/ 2004.

10.19 At the Executive Committee meeting of the Council on 13 September 2001 it was resolved that a detailed analysis be undertaken of live cases & that future years’ allocation be used firstly to address those cases currently under negotiation. [supplementary document  47] Minutes of Executive Committee meeting of 13/9/2001 Resolution iii.  Our properties were in the Lichfield Street district first paragraph)). Ours was a live case & indeed the sale of my properties was not only under negotiation, but a price had actually been agreed for them.  But there was absolutely no analysis undertaken of our case: the exclusion of our name from the questionnaire referred to in paragraph 6.8 above meant that there could be no analysis of our case at all, let alone a detailed analysis. The letters from the Council dated 9 January 2002  and 7 March 2002 [supplementary document 48] show very clearly that no analysis whatsoever had been made or was about to be made of my case in accordance with resolution 3 of the Executive Committee meeting of the Council of 13 September 2001. The failure of Council officials to carry out a clearly stated resolution of the Council, which failure caused us direct and calculable financial hardship, was not mentioned in the LGO Report.

10.20 On 22 February 2002 the Council approved a programme of acquisitions for 2002/03 ( item 83 ii) that programme included the purchase of properties in cases which met conditions laid down in paragraph 5.9 of the paper “Housing Clearance. Prioritisation of Future Acquisitions” presented to the Executive Committee [supplementary document 49] we consider that in our case those conditions were met. We have spoken to our agent, about the paragraph 5.9 referred to above, and he assures us that he did verbally agree to the heads of terms and agreed a sale price and then instructed our solicitors. We had taken reasonable steps to acquire alternative property in the expectation and belief that the Council would proceed to complete the purchase of our property (see section 1 above paragraphs 1.3 and 1.7). The procedure for the sale of our houses had reached an advanced stage (see paragraph 1.2 above). We certainly expected and believed that the Council would proceed to complete the purchase of our properties (see above paragraphs 1.2, 1.3, 1.4 and 1.6). We see no reason why we could not have been paid in accordance with the statement in paragraph 5.9. This aspect of our case was not investigated by the LGO.

10.21 The Council officials failed to communicate with us accurately over the resolutions of the Council Executive Committee. There is no evidence that they informed the councillors of our plight. It is quite possible that they failed to communicate among themselves: for instance, did the officials who were dealing with the acquisitions actually know of our conditions and our plight? We would not be the first persons to draw attention to the Council officials’ inability/reluctance to communicate properly: please see [supplementary document  45] in which the council reporter of the Sentinel newspaper records comments of the officially appointed District Auditor.

10.22 In February 2002 the Council stated that properties then empty would have the lowest priority [supplementary document 49] paragraph 5.8.1). Our properties fell into this category: they were empty because of the actions of the Council – please see paragraph 1.6 above. 

10.23 Some of the matters in our complaint against the Council outlined above were not considered in the LGO Report, and so far as they are concerned the LGO’s report is not relevant to my complaint against the Council.  These include the matters raised in sections 2, 3, 4, 6, 8 and 9 above.

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