Planning Services (Hillingdon) (Hansard, 9 June 2004)

§ John McDonnell (Hayes and Harlington) (Lab)

In 2002, the Government introduced a planning delivery grant to improve the performance of local authority planning departments. The Office of the Deputy Prime Minister provided additional grant aid to reward improved planning performance by local councils. The idea was that that grant would serve as an incentive to local councils to deliver speedier and better-quality planning decisions, thus assisting regeneration, inward investment, economic growth and environmental protection.

My constituency is in the London borough of Hillingdon, so I was pleased that, in 2002, the Government awarded planning delivery grant to the council. So far, the borough has received from the Government over £0.5 million in planning grant on the ground of its improved performance. However, at the time, even I in my role as the local MP felt that the Government's decision to reward Hillingdon for its efficient planning performance did not match the anecdotal evidence reported to me by my constituents, or my experience with my constituency case load. Similar but more forthright scepticism about the performance standards was felt by several local councillors, who had a more intimate knowledge of the operation of the borough's planning department.

Local Labour councillors, who comprise the opposition to the current Conservative administration, properly sought to question the performance standards of the council's planning department. At the first meeting of the relevant scrutiny committee, Labour councillors asked for the operation of the planning department to be scrutinised by the committee according to the terms of reference and role of the committee. That was surprisingly refused by the Conservative and Liberal Democrat majority of councillors on the committee.

In December 2002, a comprehensive performance assessment report published by the Audit Commission classed the performance of the London borough of Hillingdon as fair overall, but the planning and environmental services scored the lowest possible performance rating of one out of four. Consequently, in January 2003, Labour Councillor Janet Duncan promoted a motion to full council calling for all-party support to address how to improve the performance of those services. That was met, surprisingly, by vituperative opposition by the lead cabinet member for planning, Councillor Mike Heywood, and the leader of the council.

In a heated personal attack on Councillor Duncan, Councillor Heywood argued that the statistics upon which the Audit Commission made its judgment were out of date—in fact, there had been a dramatic improvement in the turnaround of planning applications, from 49 per cent. to 69 per cent., in an extremely limited period. Councillor Duncan, who is a former deputy director of planning, knew from experience that that scale of improvement in so limited a period appeared unrealistic and was open to question.

378 For that reason, Councillor Duncan sought clarification by contacting the Government office for London. She expressed concern at the accuracy of the Hillingdon performance figures. As a result, the Government office for London contacted Hillingdon council's chief executive, Mr. Dorian Leatham. Despite the potential seriousness of the issue, the chief executive failed to launch any independent formal investigation. Councillor Duncan was excluded by the council from meetings between the council and the Government office for London.

Eventually, only a meeting with the director of planning, the head of service, Ms Jean Palmer, was afforded to Councillor Duncan. At that meeting, Ms Palmer assured Councillor Duncan and a fellow councillor that the council's planning department performance statistics upon which Government grant was awarded were accurate. In 2003, at Hillingdon cabinet meetings, questions were raised yet again on at least two separate occasions as to whether Hillingdon's figures were accurate, and on both occasions the leader of the council and the lead cabinet member confirmed that the figures were correct.

The significance of those statistics is that they are the basis upon which the returns to the Office of the Deputy Prime Minister were completed, and the Government's planning delivery grant was awarded. To verify those assertions of the accuracy of the council's planning performance statistics, Labour councillors examined the detail of a sample of planning applications. The council uses a system called Ocella, a computerised planning system that councillors and the general public can interrogate, as all planning records are in the public domain.

Examination of the individual planning applications produced startling results, raising some serious questions.

Let me explain. The bureaucratic processing of a planning application involves the logging of the date of receipt, with any relevant information; the allocation of the application to a case officer; the writing up of the report; and the passing of the report to a planning manager for approval. A decision is then taken by the planning manager under delegated authority, or the report is referred to the planning committee for decision.

The Government's performance target is to seek to ensure that councils consider and decide on an application, and dispatch the decision to the applicant, within an eight-week time frame. Performance is measured in the Office of the Deputy Prime Minister from the date the application is received to the date when the decision is dispatched. Examination of the planning documents revealed, first, that the improper date was used for the calculation of the necessary returns to the ODPM. That is, the date of the decision was used rather than the date of dispatch of the decision. This was a conscious decision taken by the senior management team in the planning department, as evidenced by a memorandum circulated within the team, including to the director, by the head of service. I pass that memorandum to my right hon. Friend the Minister to enable him to inspect the accuracy of my allegation.

379 Secondly, dates on reports on which the ODPM returns were based, in order to gain additional grant, had been changed on report records. They were altered or crudely scribbled over to improve performance against targets.

Thirdly, reports have been backdated for signing, although recorded considerably later on the Ocella computer system. Again, I pass to my right hon. Friend examples of crude alterations to the records of the progress of planning applications.

It is understood that staff raised their concerns about the backdating with managers but were concerned for their own careers. It has been reported that a climate of fear and bullying reigned in the planning department and indeed in the authority overall. It is believed that staff were treated aggressively by senior management to ensure that records reflected improved performance rates. Staff raising concerns were soon isolated, and many simply left. The planning department is now increasingly run with agency staff, to great cost.

The use of the improper date was not just a mistake or a failure by a junior member of staff The management memo demonstrates that it was used with the clear understanding and agreement of senior management.

From all the evidence, it appears that a number of devices were used to fix the department's performance statistics in order to qualify for Government grant and to cover up the drastic failure of the London borough of Hillingdon's planning department to perform, to serve its community and to serve my constituents. Many were concerned that its actions, by any standards, were fraudulent. Although the evidence of the devices used is shocking, what is even more alarming are the lengths to which some in the authority went to prevent any proper and effective scrutiny of the questions raised about the accuracy of the Government's performance statistics.

Councillors were denied access to information. For example, my right hon. Friend the Minister wrote to the council back in July 2003, enclosing an independent consultant's report on Hillingdon's planning service commissioned by the Office of the Deputy Prime Minister. It showed serious concerns about the operation of the department, but it was withheld from Labour councillors for several months, contrary to the code of conduct on access to information. Eventually, Labour councillors received only part of the report on the evening of the sitting of the scrutiny committee due to examine it. Labour members were so concerned at the withholding of this important document that a motion of censure was submitted to a full council meeting—it was defeated by the Conservative and Liberal Democrat majority.

Councillor Duncan faced intimidation and threats from Conservative councillors that she would be reported to the standards committee. She was also barred from attending meetings between the council and the Government Office for London to discuss the department's planning performance. I pay tribute to her for having the guts and determination to pursue the search for truth in this matter. She is a true and very brave whistleblower.

The council's chief executive failed to undertake any serious investigation of the concerns expressed by councillors. Farcically, he appointed the director of planning, the head of service, herself to investigate the performance and probity of her own department.

380 There is no evidence that they called upon the services of the internal audit or interrogated the anti-fraud computer systems. Only when the Office of the Deputy Prime Minister launched its own investigations with the district auditor did the director, or head of service, admit that her performance statistics were based on the use of improper dates. That then revealed a massive drop in real performance standards, from 68 to 24 per cent.

In recent weeks, the lead cabinet member on planning and the chief executive have even sought legal advice from counsel to prevent present and former staff from being interviewed by the district auditor. It has been evidenced that a member of staff involved in the auditing of the performance statistics was offered a tax-free lump sum to leave the employment of the local authority immediately. Amazingly, the documentation provided to the district auditor was prepared by the director of planning, the head of service, herself; unremarkably, it is incomplete.

The information on the process of planning applications was placed on the UK planning website in 2003. However—I have to say, suspiciously—all such evidence that could have identified tampering has been removed from the website. When staff have left the planning department, the central information technology department of the council, which operates under the line management of the chief executive, has ensured that the computers have been wiped clean, removing records and e-mails. That may be standard practice in a local authority, but one would expect, at a time when an investigation is under way, that the chief executive would be meticulous in ensuring the preservation of all records and other potentially relevant materials. However, the practice that has been undertaken in this case is leading some to believe that evidence is apparently being systematically destroyed to cover up what is increasingly viewed as a potential major council scandal.

Let me make it clear that I believe that the leader of the council is basically an honest man. I have worked with him, and I am aware of his integrity. However, I do not believe that he or the council, or my constituents, have been well served by his colleagues and by the senior officers of the council, in particular the chief executive and the director of planning, the head of service. It is beyond belief that when serious concerns about the probity of the council's planning department were raised, not only did the relevant lead member and the chief executive fail to take appropriate action properly to investigate those concerns; they appear to have sought to use every mechanism possible to prevent access to information and to frustrate independent scrutiny and the maintenance of the high standards of openness, accountability and probity required of elected representatives and public servants.

I am grateful for the conscientious, diligent approach that my right hon. Friend the Minister has taken in giving his attention to this matter, but I now ask what action should be taken from here on. Certainly, the elected councillors of the London borough of Hillingdon need to act decisively to address these issues. I urge that a new cross-party coalition take control of the council, to work co-operatively to see it through this difficult period and to manage the reforms needed to bring about an effective administration. I call on local 381 councillors of all political parties to form a coalition of the clean to take control of the council and to resolve these problems. I ask the Minister to consider whether it is time for the Government to send in independent administrators, at least to administer the planning department and to provide advice on the establishment of effective procedures and systems to ensure accountability and probity.

An additional question is now becoming inescapable: should a criminal investigation be launched? Although the district auditor is investigating the London borough of Hillingdon, I believe that the resources of the police, who have skills and powers of investigation that might be appropriate to this type of case, may be required.

I hold this matter to be extremely serious, not just for my local authority and community but for the standing of local government overall. Anything that diminishes the confidence and respect that people have for local democracy undermines democracy itself. Tomorrow, people will go out to vote. They will vote for elected councillors across the country to serve their local communities. They will expect those councillors to uphold the highest standards of honesty and probity. They will expect to be served by council officials who uphold the same standards. That is what local democracy is all about, and that is what needs to happen now in the London borough of Hillingdon. I gave more than 20 years of my life to serve in local government, and I will not stand by while others damage its reputation and standing, and in that way undermine democracy itself.

§ The Minister for Housing and Planning (Keith Hill)

I am very grateful to my hon. Friend the Member for Hayes and Harlington (John McDonnell) for providing the opportunity to discuss Hillingdon's planning performance. He has set out very clearly some of the problems facing Hillingdon, and I am delighted to have this chance to explain how the Government are tackling poor performance and supporting improvement by local planning authorities across the country, and in particular to explain where Hillingdon is in this process.

As part of the best value process, the development control performance of planning authorities is assessed using three measures: the percentage of major planning applications dealt with in 13 weeks; the percentage of minor applications dealt with in eight weeks; and the percentage of other applications dealt with in eight weeks. Hillingdon has shown a consistent underperformance according to all three best value planning indicators since 2000–01, and it is on that basis that it has been designated a "standards authority" in three consecutive years. It is one of six authorities nationally with which my Department has actively engaged because of poor performance.

As a result of Hillingdon's designation as a standards authority in 2003–04. my Department appointed consultants to examine its performance. Their remit was to review and assess the actions taken by Hillingdon since it was inspected during the previous year by consultants from the Office of the Deputy Prime Minister. We wanted to know what progress the 382 authority was making in improving its performance, particularly in terms of working towards the ODPM's national targets for handling planning applications. The consultants were also asked to identify the barriers to further performance improvement and the priorities that Hillingdon needed to address.

The consultants will be reporting shortly on their inspection of the authority's planning service. The report is confidential between the ODPM and Hillingdon, but the borough has had the opportunity to comment on a draft. Hillingdon is responding to the consultants' work by reviewing its improvement plan to ensure that it properly addresses the problems that the consultants are identifying. We will be monitoring progress very carefully through the Government office for London.

Why is Hillingdon facing such problems in improving performance? There are a number of reasons, including the need to upgrade IT systems, to improve internal guidance on handling planning applications and to simplify process, along with a difficulty in recruiting and retaining permanent planning staff. Other authorities are facing similar problems, and they are managing to overcome them and to make progress through good management and a clear, strong focus on performance improvement. We will, as I have said, be monitoring Hillingdon's performance closely. If we do not see the improvements that are needed, we will consider what further action might be needed to intervene more directly.

My hon. Friend made a serious allegation about the way in which in Hillingdon has been recording and submitting statistics on planning performance to the ODPM. May I say how seriously I, too, regard these allegations? He first came to see me before Christmas to draw these matters to my attention, and he left a number of papers relating to these allegations. My officials immediately passed those papers to the Audit Commission and asked it to investigate as a matter of urgency.

I understand that, as a result of these allegations coming to light and of the district auditor's inquiry, Hillingdon set up in internal inquiry to look at the specific allegations, and it appointed an external consultant to look more widely at its systems. These investigations revealed that the council had systematically been returning incorrect data on its development control performance to the ODPM. It had been recording the end-date for handling a planning application as the date on which the council made its decision, rather than as the date of dispatch of the decision to the applicant, which might be some time later. My hon. Friend has alluded to these practices. The correct procedure for recording these decisions is clearly set out in the forms through which local authorities have to make their returns. The result of these practices was to make Hillingdon's performance appear better than it actually was.

This audit and related concerns about the misreporting are being externally reviewed as part of the district auditor's investigation. In the course of these investigations, my hon. Friend passed me a copy of an internal Hillingdon communication that was highly relevant to the inquiries. My officials immediately passed it to the district auditor.

383 I understand that the district auditor has received the council's report of its own investigation into how it has reported its development control performance. He has undertaken his own testing of the council's development control records and is undertaking interviews with a number of officers and former office's.

I further understand that the district auditor aims to complete his inquiries this month and to report as soon as possible thereafter. We are pressing him to do so as a matter of urgency, but I do understand that, if he were to find fault with any individual, he would need to give the person concerned the opportunity to comment on his findings and that may have an effect on the exact timing of his report.

The district auditor is the appointed official who has responsibility for investigating allegations of this nature. He has the powers that he needs to carry out a thorough examination. The remedies open to him vary, depending on the seriousness of his findings. He can report his conclusions to the council, setting out the issues and what action is needed to secure improvements. If he considers the situation sufficiently serious, he can make a public interest report. Such a report would be in the public domain. The council would be required to consider and respond to it formally and it would have to advertise the meeting at which the report was considered and publish its response.

Obviously, misreported figures could affect the planning delivery grant, which is partly based on development control performance. Hillingdon received a planning delivery grant of £223,586 for 2004–05. Planning delivery grant was allocated mainly on the basis of the council's performance in development control—dealing with planning applications—and development plan making, along with an allocation for meeting demand to supply housing in the south-east growth area.

384 Hillingdon's grant was the lowest of the London boroughs. We received the corrections to Hillingdon's development control returns in time to enable the corrected versions to be taken fully into account in calculating the grant to be paid for 2004–05. Had that not been the case, we would have had to take action to seek repayment of grant paid in respect of incorrect figures.

In order to reduce the risk of similar problems in future, the ODPM has collaborated with the Audit Commission in preparing new and clearer guidance to auditors about the checks that they should be making and the things that they should be looking out for in auditing the arrangements for recording planning performance.

In conclusion, Madam Deputy Speaker, may I once again thank my hon. Friend for raising this important topic? I think that what I have said underlines the seriousness with which I personally and the Government take this matter. We are working constructively with many local planning authorities up and down the land to promote and drive improvements in performance. Hillingdon is one of a handful of authorities where we are closely engaged in monitoring performance.

These allegations of manipulation of the planning statistics, which the district auditor is investigating, render the situation more serious still. I cannot pre-empt the findings of his inquiry, but I can reassure the House that we will take any published findings into account in charting our future engagement with the local planning authority and deciding what steps need to be taken.