Decision to foot legal bills was valid, committee decides

Labour members at Northumberland County Council had lodged a formal call-in of July’s decision to grant legal indemnities to council leader Peter Jackson, cabinet member for planning John Riddle and chief executive Daljit Lally.

This call-in was discussed this morning by the council’s corporate services scrutiny committee, where it was voted down by six votes to three. The vote was divided on party-political lines.

The cabinet had voted to provide legal indemnities to the trio – £10,000 at first with additional tranches of £15,000 – in the wake of threatened legal action by Newcastle-based developer Lugano.

The company has made a series of serious allegations in relation to the council’s handling of its Dissington Garden Village plans, for up to 2,000 new homes near Ponteland, and reported on Friday evening that it had now formally served a writ in the High Court.

The indemnities would have to be repaid if ‘their actions were fraudulent, deliberately wrong or reckless or not authorised by the council’, among other restrictions, but Labour leader Grant Davey claimed that it was ‘unclear how the taxpayer will be protected against all potential outcomes’.

At today’s meeting, Coun Davey said: “It’s not about whether members should have indemnities, it’s about how this decision was made.”

He claimed there was a lack of scrutiny, no risk appraisal had taken place and there was a lack of information provided when the decision was made.

But Coun Nick Oliver, the cabinet member for corporate resources, said that a risk assessment had taken place and a huge amount of information and legal advice had gone into the report to cabinet.

“Given the circumstances, with an offshore property company making pretty aggressive threats of legal action, it was reasonable for the council to deal with that in an urgent way,” he added. “We had to defend the right of the administration and officers to do their job.

“The fundamental issue with the call-in – which is a waste of time and money – is it conflates the decision of cabinet in relation to the legal indemnities with the highly unlikely circumstances of the council being on the wrong side of a multimillion-pound legal action. I think tt’s a deliberate political attempt to create a cloudy atmosphere and some drama, but it’s not what we were discussing.”

Coun Oliver later said: “This offshore developer has the same access as any other developer to the planning system and they are trying to subvert the process with the support of the Labour group.”

Coun Davey angrily responded that this was an ‘unfair allegation, totally and utterly wrong’.

Summing up at the end of the committee’s questions and debate, Coun Davey said: “It’s been eye-opening that members of the administration don’t wish to operate within council procedures and that there are members who don’t want to accept the Nolan principles (what’s expected of those in public office).

“Some very interesting questions have been asked and no answers have been given.”

After the meeting, he added: “Today’s call-in ended predictably in Tory and independent councillors voting to risk taxpayers’ money without considering evidence we know exists.

“It’s clear that the secret report into allegations of bullying, intimidation and corruption is material that should be properly considered when councillors are being asked to consider indemnification for a legal action which involves the same allegations, so why will the council not let councillors see this evidence when it has been presented to Lugano?

“We think this decision is flawed and are concerned that the taxpayer will be picking up a large tab and councillors will have to account for their decisions down the line.”

When Labour’s Coun Lynne Grimshaw asked about the ‘secret report’ during the meeting, she was told that it related to anonymous claims and an investigation found there was no case to answer.

“It’s not normal for allegations which were not upheld to be published so I don’t know why that would be different now,” Coun Oliver said.

Ben O'Connell, Local Democracy Reporting Service