No legal action over Tesco land sale at Corby

The special meeting of Corby Council to discuss the Audit Commissioner's report
The special meeting of Corby Council to discuss the Audit Commissioner's report

No legal action is to be taken at this time over the sale of land for Corby’s Tesco store, a deal which could have cost the borough council millions of pounds.

Two plots at St James Industrial estate were sold to developers for a total of £3.8m but a recent report by the Audit Commission revealed they could have been worth as much as £13.3m.

The report recommended that the council investigate the legal implications of the sale and its potential breach of Section 123 of the Local Government Act which prohibits the disposal of land by local authorities for a price less than the best that can be reasonably obtained.

At a special council meeting on Wednesday (July 17) to discuss the auditor’s findings, Corby Council’s chief executive Norman Stronach said that, on the basis of independent legal advice, no action would be taken at this time over the land sale but that the authority would keep the matter under review.

The council has also been advised that no action can be taken against former chief executive Chris Mallender in relation to his conduct over the land sale because of the terms of his severance agreement.

Mr Mallender left the council in January, a move he proposed, and it was agreed that unless he breached the severance agreement, which cost the authority £217,000, the council would not participate in any proceedings against him.

A report to Corby Council by Richard Clayton QC states: “In other words, the council, when taking the view that it should achieve a compromise, agreed to draw a line under the former chief executive’s employment.

“In those circumstances the severance agreement operates as a contractual promise not to take any proceedings against him arising out of his employment.”

Mr Clayton advised Corby Council that the possibility of investigating a criminal offence in relation to the land sale is an option which can be considered but that the question of whether any offence had been committed would be a matter for the Crown Prosecution Service.

The special council meeting was held to debate the auditor’s findings that the authority mismanaged four major regeneration projects - the Cube, the Tesco store, a housing development on Kingswood estate and improvements to Rockingham Triangle sports complex.

Eighteen recommendations to improve the council’s handling of future major projects, most of which are already in place, were approved.

Corby Council leader Tom Beattie said that the failings revealed by the audit report were unacceptable and a matter of regret.

He said he was determined to ensure a culture of transparency at the council and that he would ensure whistle-blowers would not be penalised.

Calling for the Conservatives and Liberal Democrats on the council to help him make changes, Cllr Beattie said: “I accept that mistakes were made but I offer the hand of co-operation and I hope that co-operation is taken up.

“I do want to change the way this council does its business and I have already begun to make those changes. They may not be fast enough for some of the councillors in this room but we are moving in the right direction. When the hand of co-operation is offered, let’s grasp it and work together.”

Cllr David Sims, leader of the council’s Conservative group, said: “We would like to work together. There have clearly been severe problems in the past and I do recognise that the council has made some improvement and moved forward in putting right these wrongs.

“We should continue to scrutinise what we do and not fall back into the old ways.”

Cllr Chris Stanbra, leader of the Liberal Democrats on the council, said his group was prepared to co-operate. He said: “The leader of the council will get support from this group, if support is warranted.”