30 January 2022
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The summons
On 20 January, I was summoned to an Extraordinary Council meeting of Hughenden Parish Council on 25 January. Extraordinary meetings are meant to deal with matters which are both important and urgent. But there was nothing important and urgent on the agenda.
There were four proposed resolutions. Two were staffing issues which could have been left until the normal Council meeting. One - agreeing the precept - was taken off the agenda as it had already been agreed.
Which left agenda item 11:
“To consider and resolve the recommendation that the monies for HCST rents be placed in an Escrow Account pending the successful conclusion of the transfer process – Appendix 4.”
I had never heard of an Escrow account and Appendix 4 was missing so I had to look it up online: -
“An escrow account is where funds are held in trust whilst two or more parties complete a transaction. This means a trusted third party puts money in a trust account. The funds will be disbursed to the merchant after they have fulfilled the escrow agreement. If the merchant fails to deliver their obligation, then the funds are returned to the buyer.
An Escrow account reduces the risk of fraud by acting as a trusted third-party …. The buyer and seller agree the terms of the account.”
I was completely baffled. It appeared that public money was to be put in a third-party account, and legal fees incurred, because someone thought HPC would not have the money to pay the Hughenden Community Support Trust, if and when the rents were due.
Did someone really think that HPC would run out of money? Even though HPC had specifically earmarked this money - about £30,000 - in the reserves?
Or did someone think HPC was going to defraud HCST?
Really?
2 days before the meeting
No papers had arrived. So, I put it to the Chairman of HPC, Cllr Nicholls, that Council was being asked to agree to an unusual and costly financial arrangement.
It was being asked to do this at short notice; with no professional advice; no justification; and no supporting information. It was being asked to do this when there seemed to be no urgency in setting up such arrangements.
I asked, amongst other things, who had proposed such an account, how much it would cost to set up and maintain, who could have access to the monies and how was that controlled, how much would go in this account and when, and what was the justification for such an account.
I said that Council should not be bounced into taking financial decisions involving substantial public funds in this way.
I also pointed out that Council needed to be doubly careful because the internal auditor had already questioned the way in which the Council had paid tens of thousands of pounds of taxpayers’ money to HCST’s solicitors for legal fees. The Council might need to write off this money as a bad debt
Cllr Nicholls replied “The position regarding the Council and the factors associated with the payment of the outstanding rents is known. The above points above can be discussed in the meeting and decisions made. The account will be under the jurisdiction of the appointed lawyer with clear instructions as when the Council want the monies to be paid to either the HCST or returned to the Council.”
Cllr Nicholls reply was factually incorrect – the position on the payments was not known. I had already asked for the legal advice about the leases with HCST and the Clerk had declined to provide the advice because it was “inappropriate.”
Cllr Nicholls had made it clear that no information on this proposed Escrow account would be provided before the meeting and there would be no written information at the meeting.
Councillors were expected to just come along and fly by the seat of their pants. No change there.
Which of course makes it impossible for residents (who had already expressed their concerns about this Escrow account) to understand Council’s decision. Where was the accountability?
The meeting
It was the normal sort of meeting for HPC: I was asked to approve draft minutes which I had not received, note lists which never materialized and consider budgets handed out at the meeting (and which were not on the agenda).
So, let’s skip to item 10. This asked Council:-
“To receive and note the legal opinion as to the obligation to make rental payments to HCST as described in the HCST Leases (to be shared at the meeting).”
At last, I thought, I will get a copy of the legal advice about the leases which I had asked for in early December.
But it became totally Alice in Wonderland. First, the Chairman insisted on doing an introduction. I politely asked if I could see the legal opinion first – it had, after all, been provided for Council by legally qualified persons.
But the Clerk told me the printer wasn’t working.
So, the Chairman went ahead with his introduction. He said HPC was potentially open to legal action by HCST for non-payment of rent, which due to the supporting facts, could succeed and the leases could become void. This could result in residents of the Parish losing access to allotments and open spaces.
I thought this was nonsense. To begin with, Council had not been provided with any facts about the potential legal action by HCST, let alone supporting facts.
I also thought a public Council meeting was hardly the place to read out a statement which told everyone, including HCST, that, if they took legal action against the Council, that action could succeed.
I asked if HCST had even indicated that they might take legal action against HPC for non-payment of the rent - on leases which had not, and could not, take effect until the titles to the land were transferred to HCST. Cllr Nicholls eventually acknowledged that HCST had not indicated that it would take legal action.
What I needed of course was the legal advice. So, as the printer was not working, I asked if the advice could be e-mailed to me.
The Clerk said she had to get the Council’s authorisation before she could do that.
The agenda item asked Council to “receive and note” the legal advice but the Clerk had to get authorization from the Council for me to receive it?
I asked the Chairman if he had seen the legal advice and he eventually said yes. Why, I thought, did the Clerk have to get Council's authorisation to give me the advice but she didn't need Council's authorisation to give the advice to Cllr Nicholls?
Then the legal advice was projected on a screen and I was told this was all I would see. Unfortunately, the print was too small for me to read.
So, the legal advice was read out, quickly by the Clerk. I had no chance to take notes.
I tell you, Alice in Wonderland had nothing on this.
I said again that I really needed the legal advice in writing, particularly before deciding on such an unusual financial arrangement such as an Escrow account.
The Council then voted not to let me have the advice at all, even on a confidential basis. They didn’t give me a reason.
All this might be funny if it didn’t involve such large sums of taxpayers’ money and the disposal of valuable public land assets.
Oh, I almost forgot. Of course, the Council voted for the Escrow account. It agreed the Clerk should arrange this with solicitors with no oversight by the Council.
It even decided that two councillors who had declared an interest, Cllrs Hardinge and Air, could vote.
I won’t bore you with the discussion except to say I repeatedly asked why Council needed to tie up tens of thousands of pounds of taxpayers’ money in an account and incur unknown legal fees when the money was there, earmarked in HPC’s reserves.
Cllr Gieler was the only one who answered. He said it was a message of goodwill to HCST.
So, there you are. Tying up tens of thousands of pounds and incurring legal fees is a message of goodwill to HCST.
I also asked why the urgency? Paul Nicholls said Council just needed to get it done.
2 days later, having sent that very expensive message of goodwill, Cllrs Gieler and Air resigned.
Job done.