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Newark and Sherwood District Council strongly criticised for actions over sale of Municipal Building and attempts to extend London Road carpark



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The eagerly-awaited audit report into the circumstances surrounding the sale of Newark's Municipal Building and proposed extension to London Road carpark has been released and is highly critical of actions taken.

The report by independent auditors Assurance Lincolnshire found Newark and Sherwood District Council guilty of failing to follow due diligence.

Proposals to build the carpark extension were ditched at the very moment that tree surgeons were poised to begin the felling of age-old trees that were in the way and represented an against-the-odds victory for campaigners who had refused to leave the site.

The Municipal Building.
The Municipal Building.

The owner of the site offered to sell the land back to the council, taking a financial hit in the process, resulting in the council deciding not to proceed with the carpark extension and buying back part of the land it had previously sold for £450,000.

It is now planned for the space to become a community garden.

Following the sale of land and buildings next to Newark Library in 2013, the council entered into a lease with the new owner to extend the carpark. Prior to the commencement of the works, concerns were raised by groups concerning the removal of trees from the site to construct the carpark extension.

The Assurance Lincolnshire report said: "There was no engagement plan in 2016/2017 over the sale of the Municipal Building or consultation on the proposal or need for additional parking within the London Road carpark extension.

Protestors facing police.
Protestors facing police.

"We could find no substantial analysis shared with members as part of the decision-making process nor explicit links to any corporate strategy or asset management policy/plan - for both the sale of the Municipal Building and extension to London Road carpark.

"Option appraisal and sound business case is a key feature of robust decision making and something that should be routinely evidenced in council decision papers. In the case of the sale of the Municipal Building (2013 & 2016) and the extended London Road carpark in 2017, this did not happen.

"It is recognised that the outcome may not have changed, however this level of analysis is needed before significant policy decisions are being made.

One of the protests.
One of the protests.

"The cabinet approved the sale of Municipal Building on the 11th April 2013. The proposal to sell the building was made before the building was vacated or a valuation had been completed.

"Policy and finance committee on the 30th November 2017 – London Road carpark extension paper included a business case but this only focused on the financial impact and was not supported by evidence of need, commercial case or environmental impacts. Inaccuracies were found in the initial case and a further updated detailed case was not submitted through Corporate Management Team prior to committee.

"Environmental and social impact was not considered in making the decision to sell the building and adjoining land. Whilst the reports referred to considering these factors there was no evidence that they had been fully considered in the decision-making process for the sale.

Pam Ball, Wendy Patterson, Darrell Pointing, and Ali Carter awake from their night in the open.
Pam Ball, Wendy Patterson, Darrell Pointing, and Ali Carter awake from their night in the open.

"Council activities achieve their intended outcome by providing a mixture of legal, regulatory and practical courses of action. Determining the right mix of these courses of action is a critically important strategic choice. They need robust decision-making mechanisms to ensure that their defined outcome can be achieved.

"We note that many of the decisions were delegated to officers but we found little evidence of effective scrutiny contribution to the sale of the Municipal Building and London Road carpark extension.

Left to right: Ali Carter, Wendy Patterson, Pam Ball and Darrell Pointing celebrate the news the trees would be saved.
Left to right: Ali Carter, Wendy Patterson, Pam Ball and Darrell Pointing celebrate the news the trees would be saved.

"Members rely on officers to follow proper processes and to present accurate information when they are asked to give a political steer or make a decision. Our review identified insufficient due diligence was undertaken around the sale of the Municipal Building in 2016 and London Road carpark extension in 2017.

"The report to Policy and Finance Committee on the 22nd July 2016 relating to the sale of the Municipal Building did not contain comments from the legal or finance business units.

"There was no asset management plan or disposal policy in place to guide the decision on the future of the Municipal Buildings. These are now in place.

Adrian Leggett and Leo Leggett 15 with dog, Rex, at a tree protest in London Road carpark, Newark.
Adrian Leggett and Leo Leggett 15 with dog, Rex, at a tree protest in London Road carpark, Newark.

"The final sale ‘deal’ in September 2016 was initially led by third parties. Whilst opportunities should be seized the ‘deal’ needs to be commercially viable and strategically fit with the Council’s corporate plan. The urgency surrounding the ‘deal’, in our view, placed limitations around the level of due diligence undertaken and affected the level of analysis, advice and officer decision making. The decision reports surrounding the sale did not include comments from legal or finance business units.

"The proposal to sell the building was made before the building was vacated or a valuation had been completed which impacted on the project overall - extending the timeframe. Each time the sale of the building fell through a report was presented to members on the proposed next step - delaying the process.

The metal barricades that went up around the garden.
The metal barricades that went up around the garden.

"The situation the council found itself in at the end of the transaction for the London Road car park extension (2021) meant that it was in a position of moving forward with a ‘least worst’ option – which was not necessarily the best value option in financial terms. On the 24th November 2021 council approval was given to purchase back the land only for £450k and not to build the car park extension. The Municipal Building and land were sold for £450k in November 2016. This decision minimised the social and environmental impact but overall, the ‘deal’ has cost the Council over £500k (including stamp duty, legal costs and lease payments for the duration of the lease).

"The Policy and Finance Committee decision on the 30th November 2017 to enter into the lease agreement with DD for the land in order to extend the London Road carpark was entered into without the necessary due diligence being undertaken."

Newark Library Gardens.
Newark Library Gardens.

The report recommends a review of the effectiveness of the council's scrutiny arrangements should be undertaken in 2023/24.

The report noted that many of the officers involved in the early decisions are no longer at the the council.

Today's chief executive John Robinson commissioned auditors to provide an independent review of the decision-making process and to identify lessons learnt/improvements for the future.

The report found issues with the way in which the council dealt with declarations of interest, finding that one officer who declared an interest continued to be involved - but it exonerates council leader David Lloyd over his conduct and reveals that he declared interests appropriately.

It quotes: "We found that where a declaration of interest had been made (actual and potential conflicts of interests) – there was not always evidence that they were acted upon appropriately throughout the decision-making process – both through the formal and informal processes. Individuals are personally responsible for disclosing a potential conflict of interest in a meeting and ensuring that appropriate actions are taken as a result.

"An officer declared an interest during the process for the sale of the municipal building in February 2015. We acknowledge that the conflict did not relate to the eventual buyer and that this sale process fell through, but we could find no evidence of actions followed through to minimise the conflict of interest declared and they remained involved in the process. We did not find any evidence of financial irregularities from the evidence and documents examined."

In a statement, Mr Robinson: "The situation surrounding the proposed extension to London Road carpark became extremely difficult and ultimately a choice between saving a number of trees and buying itself out of a contractual commitment to extend the carpark. Quite rightly, questions were asked about how the council found itself in this situation and this has been the focus of the independent review. The review highlights things that we got wrong and things we should have done better. We need to hold our hands up to these things and learn from them.

"The report also highlights that many of the proposed improvement actions have already been implemented. The circumstances surrounding the proposed car park extension brought us into conflict with members of our community in a way that was deeply troubling and out of keeping with our values and the generally good relationships that we have. I sincerely hope we never have a repeat of this situation."

Sylvia Michael, chairman of the council's audit and governance committee, said: "I welcome the report from Assurance Lincolnshire. As a council, we tend to get most things right but when we don't, it's important that we take stock, learn lessons and make improvements. Myself and committee colleagues will give the report thorough consideration and it's worth pointing out that the auditors have noted that many of their recommendations have already been actioned."



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