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Marlborough Forestry Corporation’s sub-committee procedures fall short of standard required

Local Government
Ombudsmen Act 1975
Related legislation:
Local Government Act 1974
Legislation display text:
Ombudsmen Act 1975, Local Government Act 1974
Marlborough Forestry Corporation
Sir John Robertson
Case number(s):
Issue date:

Conflict between staff and members of Board—importance of record keeping—question of minutes reflecting intentions of organisation

The complaint was against the conduct of the Marlborough Forestry Corporation, one of the few bodies originally named in Part III to the First Schedule of the Ombudsmen Act and still surviving after local government re-organisation. The organisation had not been exempt from change and re-organisation. In particular it had recently decided to dispense with the management services previously provided to it by another local authority and to engage a private company to carry out the necessary functions. The complaints were directed at the process which led to that decision.

Members of the MFC’s Board had apparently seen a need for a review of its functions and operations and had appointed a sub-committee of two, the Chairman and Deputy Chairman, to consider the matter. The three complaints were that the sub-committee: had acted outside powers delegated to it by the Board; failed to obtain legal advice as directed by the Board; and failed to consult in an appropriate manner with other members of the Board.

The Ombudsman did not sustain the third ground of complaint and did not discuss this matter further. He noted that the sub-committee was appointed to consider the future options for the management and operation of the organisation and it was authorised to obtain any necessary professional or legal advice. At a later meeting of the organisation’s Board it was given ‘power to employ a suitable consultant to prepare tender documents for the future administration and servicing of the [organisation].’ The sub-committee duly arranged for the preparation of tender documents, but it also went on to call for tenders and set a timetable for the tender process which involved a closing date shortly before the next general meeting of the Board. The tenders were considered at the general meeting, but the major item of business at that meeting arose out of the failure of the previous supplier of managerial services to submit a tender and its claim that the Board was bound by an existing contract with it. However, at least one Board member expressed the view that the sub-committee had exceeded its powers in actually calling for tenders.

The Board then resolved that the sub-committee should seek legal advice on the resolution relating to its powers to employ a consultant and also in respect of the alleged contractual arrangements. Legal advice was duly sought on the question of contractual arrangements, but not on the extent of the sub-committee’s powers, and once the advice had been received and the extent of the Board’s contractual obligation determined, the Board decided to accept one of the tenders considered at its earlier meeting.

On the face of it, the complaints could clearly be sustained. The official record of the Board’s proceedings, which by virtue of section 114N of the Local Government Act 1974 must be taken as prima facie evidence of those proceedings, did not show that the sub-committee was given power to go further than the appointment of a consultant and the preparation of tender documents. It did show that the sub-committee was directed to obtain legal advice on both the alleged contract and its own powers, whereas it had only sought advice on the contract.

The Ombudsman noted that the picture was confused. All the management and administrative functions, including the keeping of records and the recording of proceedings at meetings, were being performed by staff of a local authority which was now being called upon to tender for the service contract. The local authority was in dispute with the Board over the existence and extent of any current contract and also over the basis on which tenders were to be called. It was clear that staff believed the Board was not acting in its own best interests in considering the appointment of another organisation to perform management services and thus dispensing with the expertise and experience built up over the years.

In such circumstances, while the Ombudsman did not believe that staff had deliberately failed to keep accurate records of meetings or decisions, he had to recognise that the conflict of interests could result in different emphases on the different aspects of subjects under discussion. There were also meetings from which staff were excluded and these were poorly recorded if recorded at all. The Ombudsman was advised by the Chairman, who also chaired the sub-committee, that he was always of the belief that the sub-committee’s powers went considerably beyond the wording of the resolution and it is clear that from time to time the sub-committee reported back to the Board, and in particular that it reported on the tender process shortly before the closing date for tenders. It was not until after that date that any question arose as to the powers of the sub-committee.

The Ombudsman concluded that it was likely that the members of the Board did in fact intend to give the sub-committee fairly wide powers and that the sub-committee’s subsequent actions were accepted by the Board as a proper exercise of those powers, but that matters appeared quite otherwise from the record of the Board’s proceedings.

Similarly in relation to the taking of legal advice, the Chairman explained that he had understood that the meeting had accepted that the sub-committee had power to act and that there was no need to obtain a legal opinion on its powers.

The Ombudsman accepted that after a long meeting where complex issues are discussed, those attending the meeting may come away with quite different impressions of the content of the discussions and the details of decisions made. It is for this reason that it is necessary to keep minutes and similar records. He also found it surprising that the Chairman, when seeking legal advice, did not provide the advisers with a copy of the minutes and clearly did not refer back to the resolution before making his approach.

The Ombudsman concluded that both complaints should be sustained.

The sub-committee was given certain powers to act. The wording of the resolution recording the delegation of the powers was clear and must be taken as prima facie evidence of the Board’s intent. If it did not reflect the Board’s intent, then members should have rectified that at the meeting where the minutes were presented for confirmation. The Ombudsman suspected that Board members had not given a great deal of thought to the exact powers they were delegating and that at least the majority of members was content to accept the decisions and actions of the sub-committee. The sub-committee, however, had a duty to consider the resolution as recorded and act within the powers that had been given to them. If they believed that their terms of reference were more extensive, then they should have been aware of the discrepancy and taken steps to rectify it as early as possible.

The minutes of a meeting of a public body are a public record of its decisions and one of the means by which the public can ascertain how the body is dealing with public funds and public assets. If the question had arisen before the Board had considered the tenders and accepted them, thereby effectively ratifying the sub-committee’s actions, the Ombudsman believed there would have been very real doubt whether the sub-committee was in fact empowered to arrange to call for tenders.

The Ombudsman accepted that there was no element of bad faith in the conduct of the sub-committee but he formed the opinion that its procedures fell short of the standards expected of a public body.

As there was no recommendation that the Ombudsman could usefully make, the matter was then considered closed, although he suggested that the Board should review its procedures for record keeping and confirmation of minutes with a view to making sure that minutes of its meetings were an accurate reflection of decisions and discussion at those meetings.

This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.

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