Elderly residents were not consulted properly when Fylde Borough Council decided to sell the company which owned their homes, an investigation by the Local Government Ombudsman (LGO) has found.

The residents live in a housing development that was run by an association. The council’s predecessor became involved in the association in the 1950s. The association was a company limited by shares with a Board of Directors made up entirely of councillors.

Following a review of assets, Fylde Borough Council’s cabinet recommended the disposal of the association to a registered social landlord (RSL). If this was not done, the council would no longer support its administrative costs.

The homes were being let at a rate well below local rent levels and the association agreed that rents needed to be increased to social rent levels.

Eventually, shares in the association were transferred to the council and then on to a developer. The developer increased the rents to an ‘affordable level’. These rent levels are higher than the social rents a RSL might have charged.

The residents made a number of complaints to the LGO claiming that the council’s decision-making process was flawed. They said that there was no consultation with residents about the sale . They received just one letter telling them about the association’s proposal to identify the best alternatives for the future management of the housing complex. The next communication they received was 14 months later giving them an update on progress and introducing them to the developer as the new owner of the site.

Dr Jane Martin, Local Government Ombudsman, said:

“The residents who came to me feel understandably aggrieved that their homes were acquired by a developer with very little communication from either the council or the association.

“However, while I appreciate the residents’ concerns about the increased rents they will now have to pay, I cannot say that the sale to the developer would not have happened if the complainants had been properly consulted and I cannot say that rents would not have gone up.

“In the interest of open and transparent governance, there should have been more effort made to consult with the residents, and I hope that the council will learn lessons from my report.”

The council has been recommended to apologise to each resident for failing to ensure the association consulted them properly on disposing of their homes to a developer.

The council should also pay each resident £100 in recognition of the lost opportunity for consultation on the future of their housing and a further £100 each for the confusion caused by the lack of consultation.

Article date: 14 August 2014