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Which Sector? > Local Authorities > Perth and Kinross > LA/PK/125

Note Of Decision Web Version

Complaint no. LA/PK/125 concerning an alleged contravention of
the Councillors' Code of Conduct by Councillor Ian Miller of Perth & Kinross Council

1. Complaint number LA/PK/125 alleged a contravention of the Councillors' Code of Conduct by Councillor Ian Miller, SNP ("the respondent").

2. It was alleged that the respondent had contravened the Councillors' Code of Conduct on 22 September 2004 at a meeting of the Council by failing to declare a financial interest in an agenda item relating to the financing of residential homes to be discussed at that meeting.

3. The person complaining ("the complainant"), Councillor Sandy Bushby, Scottish Conservative & Unionist Party, alleged that she and two other councillor trustees of the same trust - the trust being responsible for the running of a residential home called Hope Park in Blairgowrie and Rattray - declared a financial interest and left the Chamber. She states that a financial interest had effectively been created, if it did not previously exist, because the trustees had guaranteed an overdraft facility from the trust's bank. Funds from this facility were to be used for renovations of the home.

4. The respondent said that the complainant was incorrect regarding the declaration of interests. He said that he and the other three councillors including the complainant declared a non-financial interest and that although the complainant did leave the Chamber, he and the other two councillors did not leave but remained in the Chamber for the debate. He said that (1) before the meeting he was advised by the Council Secretary that he should declare a non-financial interest which would not preclude him from involvement in the debate and (2) that he did not believe there was a conflict of interest. The motion concerned the general issue of funding for care homes not specifically that of Hope Park. He declared an interest but considered that overall it was not "significant" and accordingly took part in the debate.

5. The first issue for consideration was whether the respondent had a financial interest in the item about the funding for residents in care homes. In Scotland the principle of the trust concept is that the ownership of trust property is legally vested in trustees who are the nominal owners and are obliged, by the terms of the relevant trust deed, to hold the property for certain trust purposes and to administer it for the benefit of others, the beneficiaries being designated by the trust deed; the trustees are not absolute or beneficial owners. Trustees may be nominated as being the holders of specified offices and in this case the councillors who represent Blairgowrie and Rattray and surrounding area have been appointed for the purpose. Trustees can, in certain circumstances, incur personal liability and be liable for breach of trust or negligence and trustees in such a case are liable jointly and severally. Where trustees contract with third parties there is a presumption that they will be personally liable under the contract, unless there is express or implied provision that the trust estate only is to be bound.

6. The respondent had no beneficial interest in the trust. The only question was whether the overdraft facility agreement created any personal liability. On the evidence I obtained I concluded that any liability that the respondents had to the bank was as a trustee and not in a personal capacity with the trust estate holding any liability and that, accordingly, the respondent did not have a financial interest to declare at the meeting on 22 September 2004.

7. The next issue was, given that the respondent had recorded a non-financial interest in the Register of Interest, whether he should then have declared that interest and not taken part in the discussion in the relevant item. The test - as set out in paragraph 5.18 of the Code - is whether, in the particular circumstances of the item of business and knowing all the relevant facts, a member of the public acting reasonably would consider that the councillor might be influenced by the interest in his role as a councillor and that it would therefore be wrong for him to take part in any discussion or decision taking.

8. In this case, one of the Council's predecessor authorities had acquired the property for trust purposes and the local councillors for the area were appointed - and continue to be appointed - as ex officio trustees of the Hope Park Trust. The current trustees were appointed by the Council at a meeting on 2 July 2003. As already indicated the respondent (and other ex officio trustees) had no beneficial interest in the trust. The subject matter of the relevant item of business related to an important issue regarding the local authorities' funding of local authority placements in residential care homes. The subject matter of the debate (which had been initiated by the complainant by her putting the relevant motion onto the Council agenda) was on policy matters particularly calling on the Scottish Executive to assume full responsibility for funding nationally agreed increases in the cost of residential care; there was no specific discussion related to the Hope Park Trust.

9. In all these circumstances I consider that a member of the public, knowing these facts, would consider it would be reasonable for the respondent (and indeed the other ex officio trustees) to take part in the discussion at the Council meeting.

10. This case has, nevertheless, highlighted the importance of councillors giving the most careful consideration to the provisions relating to the Registration of Interests and the Declaration of Interest where they have been appointed as a trustee. In particular they must consider carefully whether the appointment carries with it any personal benefit or personal liability. In such cases (as in this particular case) it will usually be important to take advice; such advice may be readily available from Council officials in cases where the Council itself has made the relevant appointment and councillors are encouraged to continue to seek such advice in appropriate cases.

11. Having considered the information that arose from my investigation, I concluded that Councillor Ian Miller had not contravened the Councillors' Code of Conduct.

D Stuart Allan,
Chief Investigating Officer.
Forsyth House
Innova Campus
Rosyth Europarc
Rosyth
Fife
KY11 2UU
31 March 2005