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Sandwell Metropolitan Borough Council

Volume 635: debated on Thursday 25 January 2018

Motion made, and Question proposed, That this House do now adjourn.—(Amanda Milling.)

The borough of Sandwell is a place that can be very proud of its identity. It is full of rich industrial heritage, with a network of historic towns, and full of many decent, hard-working people from very many diverse backgrounds. Unfortunately, however, in recent times, Sandwell Metropolitan Borough Council has become synonymous with local government incompetence, corruption, and cronyism. Frankly, it has become a stain on the reputation of the area. As a local Member of Parliament with a proportion of my constituency within Sandwell, I am only too familiar, when out on the doorstep in Rowley Regis, with local residents’ concerns, anger and disillusionment regarding Sandwell Council.

Too often, politicians of different parties can make cheap political points out of their opponents, but the issues facing Sandwell Council go way beyond that. This calls into question the abuse of power by individual councillors and officers, a manipulation of processes, and a culture of fear and bullying among those who work for and sit on the authority.

Oh—we have quite a bit of time. If the constituents whom the hon. Gentleman encounters in Rowley Regis, part of the borough that I live in, are so disillusioned with Labour, why is every one of their council representatives Labour, and with substantial majorities? That is the real test of public opinion, is it not?

I thank the right hon. Gentleman for his intervention. No, I do not think that that is the test of public opinion. In the borough of Sandwell, different groups and even members of his own party are becoming increasingly aware of the depth of corruption, lack of accountability and failed leadership within Sandwell council, which I will come on to speak about in more detail.

I thought long and hard about calling this debate mainly because, as a democrat, I had hoped that our institutions would now have stepped in and something would have been done to ensure that the people of Sandwell could have faith once again in their local authority. However, despite the years of police referrals, public speculation, leaks and serious allegations, nothing has changed and, unfortunately, I have lost faith in anything being done soon.

While all this has dominated the minds and actions of so many in Sandwell, its political leadership have ignored the very important work they should be doing, which is running public services. For example, the children’s services department has been failing for years, letting down some of the most vulnerable citizens in the borough, and it has received damning Ofsted inspection reports. While councillors have been fighting each other, children have been left in a broken system, and they often do not receive the help they need.

In this debate, I want it placed on the public record that the people of Sandwell have had enough: they want change and they want it now. They want an end to the ever flowing supply of newspaper cuttings and headlines about local councillors and officers embroiled in scandal. When I was first elected as the Member of Parliament for Halesowen and Rowley Regis in 2010, I had fairly good and constructive relations with the local authority. Despite the fact that the authority was dominated then, as it is now, by the Labour party, the authority seemed to have been run properly. It did not take long for this to start to unravel.

The late Darren Cooper was elected leader of the council following the arrest of the former leader for theft. I feel uneasy when speaking ill of the dead, but following the death of Darren Cooper, a vacuum was created within Sandwell Council that seemed to lift the lid on much of what had been going on, and I find it very difficult to believe that he did not know and was not involved.

Following serious allegations against of a number of councillors, a report was commissioned by Wragge and Co., which is now known as Gowling WLG. The report was never meant to see the light of day. It primarily looked at the allegations surrounding Councillor Mahboob Hussain, then the deputy leader, including selling council land cheaply, cancelling parking tickets for family members and bullying. The public and private squabbling to ensure that these reports were kept private was damaging to the reputation of the authority, councillors and officials. It was embarrassing, and further emphasised the feeling of a cover-up.

Despite the fact that these allegations have been in the public domain for several years and that the Wragge report was published in May 2016, it has taken until this month for the council’s standards committee to hold a hearing into them.

The Sandwell Council misconduct hearing found Mahboob Hussain had broken rules—

I will not give way again. I made it clear at the start that I would take one intervention from the right hon. Gentleman in the debate.

Order. I appreciate that the right hon. Gentleman was speaking from a sedentary position and perhaps he thought he would not be heard, but if he is alleging that another hon. Member is misleading the House, I cannot allow that. Even if he said it from a sedentary position, I would be grateful if he now, from a non-sedentary position, withdrew what he said.

The Sandwell Council misconduct hearing found that Mahboob Hussain had broken the rules in a sale of public toilets. It said that the councillor “ignored” a £130,000 valuation, and instead sold them for £35,000 to a family friend. Councillor Mahboob Hussain has denied any misconduct, and of course he has the right to defend himself. West Midlands police have said that there is “insufficient detail” to launch a criminal investigation into the breach. However, James Goudie QC, who chaired the hearing, found that the councillor had breached the code of conduct a total of 12 times. He summarised that by saying that Mr Hussain

“compromised the integrity of other council officers by exercising complete control over the action of the sale of the toilet block…The councillor’s actions brought the council into disrepute.”

I am aware that the Wragge report was a contested document, and there are serious questions about its cost and how it was commissioned. As I have said, it was intended never to be made public, and it has reportedly cost the authority about £185,000—a substantial sum of money. Since the publication of the report in 2016, further historical allegations about a number of individuals have come to light. In January last year, an audit report brought to the public’s attention further and more widespread allegations, all of which are in the public arena and have been published on Sandwell Council’s website. Some of them have not been investigated properly, and where wrongdoing has been proved, that has not resulted in any action being taken. I do not take a view about the nature of the allegations; I merely describe them to give the House a perspective on the level of allegations that have been made about the conduct of some councillors in Sandwell Council.

Given the serious questions that have been raised about the disposal of council land in Sandwell, does my hon. Friend agree that the council should also investigate the case of my constituent, Patricia Barlow? Her late mother repeatedly tried to buy a piece of land next to her house, only to find out—after years of asking—that the council had disposed of that land to another business without even notifying her. Should the council look at the price at which that land was sold, and at whether it was all above board?

I agree. My hon. Friend is right, and I will come on to describe other allegations that have been made about land sales in Sandwell metropolitan borough. Those allegations include land sales to Councillor Bawa and Councillor Hussain, for which an investigation found potential collusion and fraudulent practice in public office. Only Councillors Bawa and Hussain, and their immediate family members, submitted bids for those plots in September 1999, and those bids gave the impression of potential cover pricing and bid suppression. For one plot, four bids were received, all from Councillor Hussain and members of his family, without any declaration to the council that that was the case. Two plots that were sold in March and April 2000 were sold at a value below the guide price, and contrary to the agreement at the time the scheme was approved.

Councillor Bawa failed to declare his role as a councillor when a planning application was submitted on his behalf in October 2007, and there are concerns about the disposal of a plot of land that was removed from public auction in order to sell it to Councillor Rouf. Potential breaches of the financial regulations and the members’ code of conduct have also been found. Furthermore, a council house was allocated to Councillor Rouf, even though he had just sold a house for £125,000. Even more astonishingly, Sandwell Council spent £200,000 on the demolition of eight terraced houses and the clearing of the site, only for that to be purchased by Councillor Rouf’s son for £65,000. He was then granted planning permission for a seven-bedroom house, where Councillor Rouf now reportedly lives.

Former Councillor Derek Rowley was allegedly involved in the disposal of a number of council-owned containers to a member of the public. The council’s investigators could not look into that because the man in question is no longer a councillor, but it beggars belief that nothing can be done about such serious allegations of misconduct in public office. Another allegation was about former Councillor Rowley’s involvement in the hire of marquees that allegedly involve the ownership of a company that was not declared and had done business directly with Sandwell Council. Again, the council has not been able to do anything about the issue. It has decided to strengthen members’ and officers’ protocols, but—

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn.—(Amanda Milling.)

All these allegations have exposed a number of incidents in which Sandwell councillors have apparently crossed the line and exposed flaws in how councillors and officers have behaved.

I come now to the next stage of this saga: the election of Councillor Steve Eling as leader of the Council. When Councillor Eling was elected leader, he said that he wanted to “drain the swamp”. To his credit, he made sure that the Wragge report was published. However, having watched his leadership over time, I am not convinced that anything he has done so far has brought about a new era of transparency or fairness—if anything, he has behaved in a way in which he has used his political power against individuals in the authority.

I am very concerned that the standards and audit committee, for example, has been used in a way that preserves the leader’s position and has deliberately targeted certain individuals. There are currently two standards investigations live within Sandwell Council, but there are serious questions to be asked about the conduct of the standards committee, its composition and the modus operandi being used to investigate two individuals. It is incredible that the council has spent over £7,000 on two QCs to chair a standards hearing against one councillor, while others have been let off scot-free. Far from draining the swamp, Councillor Eling has allowed the swamp to fester.

As I made clear to the right hon. Gentleman, I was going to give way to him only once.

The smell of corruption and cover-up is as strong as ever, and I have come to the conclusion that Councillor Eling must resign immediately as leader of Sandwell Council. Someone has to take responsibility for the rottenness at the heart of Sandwell Council. I do not say that lightly.

Probably none of this information would be available today if it were not for the dogged persistence of a few individuals. Although I do not necessarily always approve of the techniques or the language used on the Sandwell Skidder blog, it would be remiss of me not to accept that it has contributed an awful lot to exposing what is going on in Sandwell. Because of the blog’s work, Councillor Eling and his colleague Councillor Marshall tried to enlist the support of the blog’s author, Julian Saunders.

I have drawn the conclusions I have about Councillor Eling’s leadership because of the publication of a series of WhatsApp messages placed on the blog. The contents are absolutely astonishing. The messages are primarily from Councillor Richard Marshall, but came following a meeting with Councillor Eling, who wanted to open a line of communication to the blog. They include Councillors Eling and Marshall asking the blog to give the assistant chief executive a “kicking” and supplying information relating to her personal life. Messages were also sent in respect of the senior officer’s employment, including that she had been sent home to “consider her position”. In another case, information was shared about a senior officer leaving the authority before a public announcement was made. There were also leaks of information concerning a Travellers’ site, messages including sexual remarks relating to other councillors, and transphobic remarks. Those are just a few examples taken from the many reams of messages and communications.

The behaviour of Councillor Richard Marshall, who appears to have been under the direct instruction of Councillor Eling, is below that which is expected of those in public or any other office. Councillor Marshall has also been subject to a bankruptcy order, but continued for a substantial time as a cabinet member. That is an issue in itself, and I should be thankful if the Minister would look into it. I cannot see how an elected official can stay in office after being declared bankrupt.

Almost all these allegations have been reported to the Labour party for it to investigate, but I am told that after nearly four months there has been hardly any movement towards a conclusion. It is incumbent on us all—Members of Parliament, councillors, and members of the public—to ensure that when allegations of wrongdoing are raised with us they are passed on to the correct authorities, and that we do all we can to ensure that those allegations are investigated properly and quickly.

One of my fellow Sandwell MPs, the hon. Member for West Bromwich East (Tom Watson)—who is not in the Chamber—is, of course, the deputy leader of the Labour party. Right on his very doorstep, there are allegations of fraud, misconduct in public office, sexism and bullying, and he has hardly breathed a word. Of all the people who would be able to step in, call a halt to the reign of some of these councillors and ensure that allegations are investigated properly, he would be the one.

I think that the hon. Member for West Bromwich East has some questions to answer about why he has remained so quiet.

Order. I must ascertain from the hon. Gentleman whether he gave the hon. Member for West Bromwich East notice that he intended to refer to him during the debate.

Over the last few years I have written to the Secretary of State several times about these matters. He has looked into them, and I am grateful for his time. Let me now end my speech by asking the Minister to investigate whether the following actions can be taken.

I should like the Ministry of Housing, Communities and Local Government to make the strongest intervention possible in respect of the capabilities and governance of Sandwell Council. I should like it to make a series of recommendations which would restore public trust and confidence, and which would be overseen by an independent commissioner. I should like it to look into the behaviour and conduct of both elected and non-elected members of the authority, and I should like those who are found to have behaved inappropriately to be removed from their posts. I should like the Minister to look into the rules relating to councillors and bankruptcy to ensure that those who have been declared bankrupt cannot hold public office, and to strengthen the independence of standards committees by keeping them free from political influence by ensuring that independent members are externally appointed.

There are also many questions to be answered by the local authority, including questions about monitoring officers. Perhaps the Minister could look into that as well, because Sandwell has been through a number of them in the last four years. I should like to know how much the redundancies cost, and whether the use of compromise agreements has been used to gag those people. I understand that such agreements have been used. I should like to understand why, and also why it is so difficult for the authority to keep monitoring officers in post.

What I have said today has, in many respects, probably just scratched the surface. No one will ever know the complete story, and I may well have missed out many things that others will feel needed to be said. I initiated the debate primarily because I felt that it was in the public interest to do so: the public need to know answers, and I will continue to press for the truth to come out. I did so also because I have met and spoken to so many people in Rowley Regis, in Sandwell, and further afield who are gravely concerned. I have spoken to residents, faith leaders, businesses, and others who have given decades of service, including members of the Labour party who were in tears as they spoke to me about the state of political authority and control in the party in Sandwell. They now feel that there is nowhere left for them to turn.

I hope that the Minister has been as disturbed by what he has heard today as many residents of Sandwell are, and I hope that he will be able to intervene in a way that will restore public trust and bring an end to this rotten regime.

Order. The right hon. Gentleman cannot speak in this debate. In order to do so, he would need the permission, sought previously, of the hon. Member whose debate it is and of the Minister, and the Chair would also expect to know, and that is not the situation in which we find ourselves, so I am afraid that it is not in order for the right hon. Gentleman to speak.

I congratulate my hon. Friend the Member for Halesowen and Rowley Regis (James Morris) on securing this debate on the governance and capabilities of Sandwell Metropolitan Borough Council, and I am grateful to him for raising awareness of these issues of public concern.

I know Sandwell Council has been on a number of people’s radar for some time, especially since the hon. Member for West Bromwich West (Mr Bailey) raised concerns during business questions to the Leader of the House on 30 October last year; Madam Deputy Speaker, I can tell you that I have informed the hon. Gentleman that he was to be mentioned in this debate. His concerns focused on alleged inappropriate behaviour of a councillor and cabinet member at Sandwell Council.

I am pleased to have this early opportunity in my new role to discuss local government, standards and councillor conduct. It is vital that local government operates effectively because, as we all know, it is in the frontline, delivering essential services to some of society’s most vulnerable. The conduct of local councils and their councillors has a direct impact on the reputation of an area and of their fellow members. Their ability to lead a community and impact the lives of all those they serve is significant, and it is only right that they are held to a high standard.

I want to emphasise up front that the vast majority of local government functions well. There are many examples of innovative and excellent practice to be found across all types of councils, being led by forward-thinking and dedicated public servants from across the political spectrum. But, as in all walks of life, sometimes things go wrong and help is needed, and when councils do require help or advice, it is the sector that is best placed to assist in the first instance. That support is available from the Local Government Association, for which my Department provides funding.

Would the Minister therefore be interested to know that the LGA did an assessment of Sandwell, as it does of boroughs around the country, which said that Sandwell had strong and stable financial management and a clear intention and track record of protecting frontline services? That is what the Conservative-dominated LGA said.

I am about to come on to the most recent local government peer inspection.

The £21 million of funding that the Department has provided has supported training and guidance for members and officers, policy briefings and a programme of external peer challenges.

I will now address each of the points my hon. Friend the Member for Halesowen and Rowley Regis has asked me to respond to. First, on the question of intervention at Sandwell Council, it is important that I take this opportunity to stress that the decision to intervene in a local authority and remove control from those who have been democratically elected is very serious. Only as a last resort would the Secretary of State for Housing, Communities and Local Government use his powers of intervention, and only where there is comprehensive evidence of extremely serious and widespread systemic failings in a council. Statutory interventions are rare: the powers have been used only twice in the last five years and only six times in the last 15 years.

I am aware of the allegations that my hon. Friend has outlined today, and of the fact that Sandwell Council has been the subject of extremely negative press coverage that has no doubt undermined public confidence locally and raised serious questions about conduct. I am also aware that, in response, Sandwell Council has recently invited a Local Government Association external peer challenge, which was conducted last week with a team led by the chief executive of Sefton Council. The peer challenge team is due to report back to the council formally within the next week or so. I have every confidence that it will have looked forensically at the council’s strengths and weaknesses and that it will provide clear feedback and robust recommendations. I will be particularly keen to review the team’s conclusions and recommendations, and I am urging Sandwell Council to share them with me at the earliest possible opportunity. I would expect the council to take the results of the external challenge very seriously and to take all action required as a result.

I want specifically to address the points raised about councillor conduct, standards and governance. The Localism Act 2011 provides a broad framework for local authority standards, allowing local authorities to tailor their arrangements to meet local circumstances. The Act requires relevant authorities to promote and maintain high standards of conduct by members and co-opted members of the authority. Each local authority must publish a code of conduct that is consistent with the Nolan principles of standards in public life and that covers the registration of pecuniary interests.

Authorities must make arrangements to investigate allegations of failure to comply with their code of conduct, and in many cases councils have standards committees to undertake that role. If a councillor breaches the code, they can be censured and any portfolio responsibilities or memberships of outside bodies can be removed. The council must consult an independent person before making a decision on a breach of its code of conduct. It is vital that that independence is genuine, so that it can provide proper oversight and good governance. The independent person must therefore be among the electorate; have no political affiliation; have no current or previous association with the council; and have no friends or family members associated with the council. Last week, Sandwell Council recruited and appointed an additional independent person for its ethical standards and member development committee, which is now at its full complement with three independent members and eight councillors. I would of course expect those councillors to take seriously their responsibility to hold their peers to account and provide democratic accountability.

It is also a statutory requirement for all councils to have a monitoring officer to ensure that the council operates within the law. The monitoring officer’s duty is to investigate concerns about conduct, and they are ultimately responsible for ensuring the genuine independence of members of standards committees. I expect monitoring officers to live up to those responsibilities with the utmost seriousness. A new monitoring officer has been in post at Sandwell since September, and I hope that we will continue to see a change in the council’s ability to get to grips with the long-standing standards issues that have been generating negative attention. I understand that some progress is now being made, albeit somewhat belatedly, on two of the long-standing allegations involving the disposal of council property. As we are aware, there are further allegations that are the subject of a police investigation, so my hon. Friend will obviously understand that I cannot comment further on them. I would encourage the monitoring officer to continue his work in transparently dealing with complaints and allegations and acting without fear or favour.

My hon. Friend asked about the rules on councillors and bankruptcy. I can tell him that the existing legislation is clear that any individual who is subject to bankruptcy orders is disqualified from standing as, or holding office as, a member of a local authority. As part of local openness and accountability, it is right that the disqualification ceases only when the individual has paid his debt in full. I wholeheartedly agree with the principle that it is important that elected members are held to high standards of conduct in public office. If there are allegations that this law has not been complied with, as has been suggested, I would urge the monitoring officer to investigate.

The LGA peer challenge and the sharper focus that the council is giving to standards and conduct are important steps in addressing the issues that the council faces. As my hon. Friend has highlighted, however, it is undeniable that Sandwell has had other significant challenges to address in recent years. Since 2010, the council has received attention in relation to its children’s services, with four “inadequate” Ofsted ratings. An independent report concluded that the council did not, on its own, have the capability or capacity to improve children’s services. That led the Department for Education to issue a statutory direction in January 2016, requiring the council to work with an appointed commissioner for children’s services and develop a children’s trust. I hope that the council will work closely with the children’s commissioner, Malcolm Newsam, and the Department for Education to agree detailed proposals about how the trust will work. The Government are committed to working together to make sure that children and families in Sandwell receive the best possible care and support through the new trust.

In conclusion, as my hon. Friend will be aware, local government is independent of central Government—a principle enshrined in the Localism Act 2011. Through elected councillors—and, where applicable, Mayors—councils are accountable to the communities that they serve, through the ultimate sanction of the ballot box.

No; I am getting to the end of my remarks. It is clear that Sandwell has had sharp challenges, and the issues that have been highlighted today raise serious concerns, but I am pleased to see that the council has invited external challenge. It is important that the council develops its corporate governance and capabilities, and that the drive for improvement is sustained. I hope that those responsible have taken note of our words.

Order. The Minister is not giving way. The right hon. Member for Warley (John Spellar) is normally an extremely well-behaved Member of this House, and I hope that he will revert to that within the next few seconds.

I can tell my hon. Friend the Member for Halesowen and Rowley Regis that I will continue to take a very close interest in the situation, including the outcome of the Local Government Association peer challenge and the steps that Sandwell Council takes to respond to it. I commend my hon. Friend for raising awareness of these concerns on behalf of his constituents. It is absolutely right for him and his constituents to expect and demand high standards of conduct from their local representatives. For our system of local accountability to work, it is important that issues are dealt with swiftly, transparently and rigorously. In the first instance, it is vital that we shine a light on areas of concern. That is exactly what he has done today, and I commend him for that.

Question put and agreed to.

House adjourned.