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Complaint no. LA/Fi/599 concerning an alleged contravention of the Councillors' Code of Conduct by Councillor William Kay of Fife Council

1. Complaint number LA/Fi/599 alleged a contravention of the Councillors' Code of Conduct ("the Code") by Councillor William Kay ("the respondent").

2. It was alleged that the respondent had contravened the Code, in particular, paragraphs 3.18 and 3.19 (Appointments to Partner Organisations), section 4 (Registration of Interests) and section 5 (Declaration of Interests).

3. The person complaining ("the complainant") made a number of allegations the most relevant of which was that the respondent had used his position as Chair of Fife Environment Trust ("the Trust") to ensure that his own area was one of the main beneficiaries of grants awarded by the Trust.

4. Those aspects of the complaint contained in the complainant's first letter which alleged that the Trust had been used for political purposes and political gain and that it was not being operated as an independent Trust related to the Trust acting as a corporate body rather than to the conduct of the respondent. As such, they were not matters which fell within the Chief Investigating Officer's powers of investigation. Rather they are issues which fall within the remit of ENTRUST which is the relevant regulatory body. The complainant's stated intention to take these matters up with ENTRUST is, therefore, the appropriate course of action. In this context it was relevant to point out that the Monitoring Officer confirmed that the Trust has never received any adverse reports from ENTRUST.

5. The complainant expressed concern about the composition of the Fife Coast and Countryside Trust. In addition, he pointed out that the respondent was Chair of both this body and of Fife Environment Trust and that the former body was a main beneficiary of grants from the latter; the complainant implies that there is something untoward in this situation. The composition of Fife Coast and Countryside Trust is not, of itself, a matter related to the conduct of councillors and did not, therefore, fall to be examined as part of this complaint. Beyond making the general observation that the respondent was Chair of both Trusts and that Fife Coast and Countryside Trust received grants from Fife Environment Trust, the complainant produced no evidence of misconduct on the part of the respondent. In regard to this particular matter I found that there was no specific evidence that warranted investigation.

6. The complainant's observation that Scottish Natural Heritage was also a main beneficiary of grants from Fife Environment Trust and that Scottish Natural Heritage had Directors "on both Boards" (which I take to mean Fife Environment Trust and Fife Coast and Countryside Trust) was not a matter which related to the conduct of councillors and did not, therefore, fall to be examined as part of this complaint.

7. The only aspect of the complaint which fell within the Chief Investigating Officer's powers was the allegation that the respondent, in his capacity as Chair of the Trust, should not have been in a position to ensure that his own area was one of the main beneficiaries of grants awarded by the Trust. In support of this allegation the complainant produced an analysis of the grants which the Trust had made over the past two years. This purported to show, among other things, that organisations within the respondent's ward received, in aggregate, the highest amount of grants (£85000) awarded by the Trust during that period. For the purpose of this summary the term ward refers to the ward as defined prior to the May 2007 elections.

8. The respondent pointed out that one of the projects identified by the complainant as being within his ward (Gilvenbank Park Play Area Project) and as having received a grant of £30000 was, in fact, in another councillor's ward and that the omission of this amount demoted him from number one to number four in the complainant's league table of grants distributed per ward. The Monitoring Officer confirmed that the project in question was not in the respondent's ward.

9. The respondent also pointed out that the complainant's analysis attributed certain grants to the wards of two Labour councillors when, in fact, one of the councillors was an Independent councillor and the other councillor was a member of the Liberal Democratic party. The Monitoring Officer confirmed the correctness of the respondent's designations. When the complainant's figures were adjusted to correct these inaccuracies the level of grants which he classified as having been awarded to organisations represented by Labour councillors were significantly reduced and the corresponding league placings were significantly altered. The overall impact of the inaccuracies was seriously to undermine the underlying rationale and credibility of the complainant's allegations.

10. The complainant alleged specifically that paragraphs 3.18 and 3.19 of the Code had been breached. Paragraph 3.18 of the Code does not lay down a specific rule of conduct. It advises councillors that they must observe the rules of the Code when serving on other bodies to which they have been nominated or appointed by their Council. Paragraph 3.19 advises councillors that a conflict of interest may arise when they are serving as a Director of a company to which they have been nominated by the Council and that, in such cases, it is their responsibility to take advice on their responsibilities to the Council and the company. It was entirely accepted that some grants were made in respect of organisations or projects within the respondent's ward. There was, however, no evidence that any of these grants were awarded other than on a wholly proper, evaluated basis. Further, none of the grants identified by the complainant as having been paid by the Trust were to the Fife Council and, indeed, the Council are legally precluded from receiving grant funding from the Trust. I did not consider that the fact that some grant applications were from organisations within the respondent's ward gave rise, by itself, to a conflict of interest. In relation to this aspect of the complaint I found that the respondent had not breached paragraphs 3.18 or 3.19 of the Code.

11. The complainant made the general allegation that the respondent had breached sections 4 and 5 of the Code. Section 4 identifies various categories of interests which require registration the most relevant of which to the complaint are set out in paragraphs 4.3 (Category One: Remuneration) and 4.21 (Category Seven: Non-Financial Interests). The Articles of Association of the Trust provide that the Directors of the Trust do not receive any remuneration for serving as Directors. Consequently the respondent had no registerable interest under paragraph 4.3 of the Code. The respondent had registered his Directorship of the Trust as a non-financial interest in the Members' Register of Interests as required by paragraph 4.21. I found, therefore, that the respondent had not breached paragraphs 4.3 or 4.21 of the Code.

12. Section 5 of the Code sets out rules for the declaration of interests. The paragraph which is most relevant to the complaint is paragraph 5.9 which states, in relation to non-financial interests, that there is a very strong presumption that such an interest will be the subject of declaration in any context where there is any link between a matter which requires the councillor's attention and the registered interest. The grants identified by the complainant as having been paid by the Trust were to Community Councils and other local organisations (none of the grants were paid to Fife Council) and there was no evidence that the respondent had any declarable interest in respect of any of these organisations. Accordingly, there was no interest which the respondent required to declare and I found that the respondent had not breached paragraph 5.9 of the Code.

13. In summary, having regard to the facts that:

- the respondent registered his position as Chair of Fife Environment Trust as a non-financial interest in the Members' Register of Interests;

- there was no evidence that the respondent had any declarable interest in any of the organisations that received grant aid;

- the initial process for assessing the eligibility of grant applications is the responsibility of an officer of the Trust and not the Directors of the Trust;

- the Directors appointed to the Trust by Fife Council are, in compliance with the terms of the constitution of the Trust, a minority of the overall Directors and, as a voting minority on the Trust, are unable to determine the outcome of votes on individual grant applications;

- there were material and substantial inaccuracies in the information provided by the complainant,

I found that the respondent had not breached paragraphs 3.18, 3.19, 4.3, 4.21 or 5.9 of the Code.

14. Having considered the information that arose from my investigations I concluded that Councillor William Kay had not contravened the Councillors' Code of Conduct.

D Stuart Allan,
Chief Investigating Officer.
Forsyth House
Innova Campus
Rosyth Europarc
Rosyth
Fife
KY11 2UU
13 September 2007