Explosive report reveals 'significant concerns' over Dissington Garden Village planning application

The document explains that there is ‘now significant evidence that appears to suggest that attempts were made to subvert’ the authority’s planning function in relation to the Dissington Garden Village (DGV) scheme, which sparked a £10million High Court claim against the local authority that was later dropped.

In echoes of the scandal surrounding the council’s former company Arch, it raises concerns about ‘excessive hospitality’ provided to an ex-planning boss which went undeclared, as well as evidence of a ‘highly irregular’ loan to fund the development and collusion to secure ‘inappropriate advantages’ for the developer.

Back in March 2017, Newcastle-based developer Lugano’s proposals for up to 2,000 new homes and other facilities were handed a minded-to-approve resolution by the council.

However, after the Conservatives formed the new administration following the elections in May that year, they withdrew the previous core strategy before starting to develop a new version of the Local Plan, which required the reassessment of the DGV bid.

In May 2018, Lugano made serious allegations – which were strongly refuted – against the local authority as well as council leader Peter Jackson, chief executive Daljit Lally and cabinet member for planning John Riddle, with writs then issued in the High Court in August.

In late January 2019, the DGV application was withdrawn just days before going in front of the council’s strategic planning committee again, where it was to be recommended for refusal.

At the time, Lugano said it was continuing with its High Court action and that it would resubmit the plans in the future, but two months later the legal claim was discontinued as it was revealed that the estate had transferred into the ownership of Matterhorn Capital, one of those to provide a loan for the DGV project.

Lugano Dissington Estate Ltd has since gone into administration.

A report to next Wednesday’s (January 22) meeting of the authority’s audit committee now informs members of ‘significant matters of concern which have been identified in relation to the discharge of specific aspects of the county council’s planning function’.

The issues initially came to light following an investigation into a whistle-blowing disclosure in 2017-18, with more matters coming to light during ‘further subsequent relevant investigations’.

The report reveals that:

‘Significant concerns’ have been raised with Northumbria Police and the relevant professional body after the conduct of a number of senior former council employees ‘fell short of expected standards of behaviour, conduct and ethics’;

‘Significant efforts were made by several persons in positions of authority and control within the county council to collude with and secure a number of inappropriate advantages for the planning applicant/developer’;

There is also evidence that ‘a former very senior planning officer’ accepted substantial hospitality, including first-class rail travel, hotel accommodation and fine dining in a private room of a London restaurant owned by a Michelin-starred chef, from the applicant/agents and did not declare or record this;

Staff were instructed to use personal email accounts in relation to this application, so correspondence would be hidden from the council’s system, although junior planning officers brought this matter to senior management’s attention;

The applicant/advisers were invited/allowed by a very senior officer in the planning department to write and alter parts of the report to the strategic planning committee which recommended approval of the scheme, while council officers sought to obtain legal advice to support the applicant’s stance;

A total of £273,389 of legal costs were racked up by the council to fight the High Court claim before it was dropped and given the administration of Lugano Dissington Estate Ltd, ‘it is highly unlikely that the county council will be able to recoup any of the funds’;

The administrators have investigated the company directors and a report regarding their conduct has been formally submitted to the Department for Business, Energy and Industrial Strategy (BEIS).

Beyond these allegations, the report makes clear that the recommendation to approve the Dissington scheme was ‘entirely perverse’.

The report sets out that advice from the Planning Officers Society is that ‘any reasonable planning authority would have recommended the planning application in question for refusal’.

It later adds that significant efforts were made by those within positions of influence and power to subvert the evidence of the council’s own Green Belt Review from 2015 which concluded that the land concerned made a high contribution to the purposes of the green belt in Northumberland.

The report also refers to a potential loan from the council to the developers, described as ‘highly irregular’ and an issue which has been raised in the council chamber on previous occasions.

It has previously been described as a ‘Tory smear’ by the leader of the previous Labour administration, Coun Grant Davey, who said no agreement was reached and it had not ‘gone any further than a conversation between two chief executives’.

But the report cites evidence that the discussions had reached an advanced stage, with heads of terms and other correspondence obtained relating to an initial £34million from the local authority plus further funding of 55% of the site value once outline permission was granted.

The report also mentions the ‘context and the difficult circumstances in which senior staff and members have been operating while seeking to ensure that poor practice of individuals has been eradicated, and that open and transparent processes become embedded’.

During the period while the legal action was live, it is claimed that ‘numerous attempts were made to seek to discredit and/or intimidate senior council officers and members’.

The report adds: ‘The council took a number of actions including reporting concerns to the police and adopting enhanced security measures in order to support staff and members during this period.’

A Northumberland County Council spokesman said: “We have a statutory obligation to uphold the duties required as a planning authority.

“It is only right and proper that when significant matters of concern are brought to our attention, that we investigate these fully, and report and act on the findings.

“These related specifically to the professional conduct and inappropriate behaviour surrounding a significant planning application, which was subsequently withdrawn.

“To confirm, the employees referred to in this report are no longer employed by the council. The report will be fully considered by audit committee at its next meeting.”

A spokeswoman for the Labour Group in Northumberland said: “The findings of this report expose a number of weaknesses in the system which have now been addressed.

“We welcome the frameworks that have now been put in place, including measures to provide support to whistle-blowers wishing to speak out.”

Northumbria Police and Lugano have also been approached for comment.