Senior South Tyneside councillor Ed Malcolm could face 'formal censure' and potential police investigation over failure to properly declare paid role with housing company at council meetings

Councillor Ed Malcolm, Simonside and Rekendyke ward member, was the focus of a South Tyneside Council Standards Committee this week in relation to a complaint lodged back in 2020.

For many years, Cllr Malcolm combined his position as cabinet member for resources and innovation, which included responsibility for developing the council’s annual budget, with a role as chair of South Tyneside Homes (STH).

However a formal investigation was triggered after concerns were raised about Cllr Malcolm’s apparent failure to raise this at meetings when local authority rules state he should have.

The role included a £10,000-per-year allowance as the chair of the board at South Tyneside Homes, an arms-length management organisation created by South Tyneside Council to manage its council homes.

Cllr Malcolm’s allowance for serving as chair of the board was classed as a disclosable pecuniary interest (DPI).

Despite correctly registering the DPI on the council’s register of members’ interests, an investigation found that he failed to declare the position at a number of council meetings when he should have, including full council.

The complaint was submitted by councillor John Robertson, an independent member and former opposition leader on the local authority.

Cllr Malcolm later sought and was granted a “dispensation” from the Standards Committee to allow him to stay in relevant meetings and to participate in votes despite the DPI.

At a meeting of the Standards Committee on March 15, 2023, councillors were asked to “test the robustness” of an official investigation report into the complaint and looked at recommendations from an investigating officer.

Nicola Robason, the local authority’s designated monitoring officer , as investigating officer, concluded that Cllr Malcolm “whether unintentionally or otherwise” had breached the council’s code of conduct.

It was also recommended that the matter should be referred to Northumbria Police to look at any potential breach of the Localism Act.

Cllr Malcolm chose not to attend the Standards Committee hearing at the town hall but submitted a written response.

This said that any breach of the council’s code of conduct was “unintentional” and that the process around declaring interests “was not clear, nor was the process for obtaining dispensation”.

Cllr Malcolm’s statement said there was “no actual conflict [of interest]” but that he “understood the perception for potential conflict to arise”.

The Labour councillor also stressed there was “no evidence of any fraud and that any referral to the police should make this clear” and that the complaint was “politically motivated”.

In a statement submitted during the investigation, he added the complaint was seeking to take retrospective action for a “procedural failure […] based on an oversight by the council to make the process of dispensation clear”.

Cllr Malcolm also asked why he was the only councillor being investigated when “there are several councillors who had also not been granted dispensation”.

An interview transcript quoted Cllr Malcolm stating he “never took much notice” when the Mayor asked for declarations of interest at the beginning of meetings and thought he “had to declare once a year”.

Cllr Malcolm added the complaint was the “result of an oversight by the senior [council] officers who did not advise members correctly”.

But the investigating officer, in her report, said Cllr Malcolm had a “personal responsibility” to be aware of rules and “that any failings cannot simply be attributable to officer failure”.

Members of the Standards Committee were asked to examine the investigating officer’s report before coming to a decision.

It was acknowledged that the level of information around declarations of interests had improved since 2012, when Cllr Malcolm was originally appointed chair of South Tyneside Homes board.

However councillor Ian Forster suggested Cllr Malcolm had sought to “pass the blame” and that, as a senior experienced councillor, should have been aware of his obligations around council rules and regulations.

After private deliberations, the Standards Committee returned its findings which were delivered by independent chair professor Grahame Wright.

It was found, on the balance of probabilities, that Cllr Malcolm did not have a “serious conflict of interest” but that there was “potential that a conflict of interest could arise that would need careful management in his dual roles”.

The Standards Committee found that failing to correctly declare a DPI at meetings was a breach of council procedure rules and the code of conduct and could “reasonably be regarded as bringing his role as councillor and the council into disrepute”.

The committee found that there was no evidence presented of “any intention to gain financially from the failure to comply with the requirements to declare interests”.

But councillors agreed that Cllr Malcolm had breached several principles of public life, specifically the principles of integrity, accountability, openness and leadership.

It was also noted that Cllr Malcolm did not obtain a dispensation until September 2020 and that “by remaining in meetings, taking part in debate and voting on matters related to his DPI” prior to the dispensation being granted “could be an offence” under section 34 of the Localism Act 2011.

The official response from the Standards Committee included:

:: Referring the matter to the next ordinary meeting of borough council with a recommendation that borough council (rather than the StandardsCommittee) issue a formal censure to Cllr Malcolm.

:: Referring the matter to borough council with a recommendation that borough council remove Cllr Malcolm from his position as a member of Constitution Committee and not to reappoint him to the committee for the 2023/24 year.

:: The council’s monitoring officer being instructed to “refer the matter to the police for investigation of any potential offences under the Localism Act 2011”.

:: The Standards Committee considering member induction material andmember training and development more generally around responsibilities to register and declare interests and to apply for dispensations “where necessary and appropriate”.

Background and reaction

Cllr Malcolm has served as an elected member for almost three decades and has had several senior committee roles, cabinet responsibilities and a spell as Mayor of South Tyneside.

While no longer either a cabinet member or chair of South Tyneside Homes, he is currently chair of South Tyneside Council’s Overview and Scrutiny Coordinating and Call-in Committee.

It is the second time Cllr Malcolm has been called before the Standards Committee in less than a year for a complaint around breaching council rules.

Back in July, 2022, Cllr Malcolm received a formal censure for “failure to ensure that his telephone allowance claims were correct”.

At the time the panel acknowledged this “may have been unintentional” and that council officers “bore some responsibility for the incorrect way in which the allowance was paid”.

However the Standards Committee found unanimously that Cllr Malcolm’s “failure to comply” with allowances rules amounted to him breaching the “accountability principle of public life”.

Following the latest Standards Committee, decisions on a formal censure and other sanctions will be made at a full council meeting later this year.

A report presented to councillors this week said there was previously “no agreed process for reporting a matter relating to potential breaches of the Localism Act to the police” but that a protocol was now in place.

The report added that police advice provided in August, 2022, said that “any internal code of conduct investigation would need to be concluded before police colleagues would make any decisions as to whether to commence any criminal investigations”.

Emma Lewell-Buck, MP for South Shields, reacting to the Standards Committee ruling, said: “People in South Shields deserve much better from those they elect and put their faith in”.

She added that those “privileged enough to be given the responsibility of standing up for the electorate were all at risk of being tarred with the same brush” when “bad behaviour is left unchallenged”.

The full Standards Committee decision can be found on South Tyneside Council’s website.

Northumbria Police and Cllr Malcolm have been approached for comment.

https://www.southtyneside.gov.uk/article/17729/Standards-Committee-Hearing-15-March-2023-Complaint-Concerning-Cllr-Ed-Malcolm